The Middle East is a market in desperate need of more satellite capacity. It seems as fast as the satellites are going up, the capacity is being snapped up by broadcasters, telcos and others due to an insatiable demand for satellite capacity in the region.
The market is served by established local players such as Nilesat and Arabsat, who compete alongside industry giants such as SES Americom-New Skies, Eutelsat Communications and Intelsat. And now the region is home to two of the most talked about new satellite operators in the world. Yahsat is building a dual satellite system valued at $1.6 billion, and not to be outdone, a new operator has emerged.
SmartSat, based in the United Arab Emirates plans to spend $500 million on what it claims is the Arab world’s first private satellite that will serve the Middle East and North Africa (MENA) region. SmartSat aims to provide services to ISPs, GSM providers, broadband technology solutions providers, television stations, ministries of communication, military agencies and companies dealing with data systems among others.
The company is a joint venture between a Jordanian private shareholding company that operates as a global broadband satellite services provider in the Middle East, North Africa and Eastern Europe and a leading Kuwaiti investment holding company, which will be the financial advisor for the project. SmartLink will serve as managing partner.
SmartSat managing director Khaled Derbas discusses the opportunities he sees in the Middle East and where the operator fits in on an increasingly crowded landscape in the region.
VIA SATELLITE: What opportunities give SmartSat’s backers the confidence to invest $500 million in the project?
DERBAS: SmartLink, the service provider, and Al Jawhara Holding, the Kuwaiti investment company, have joined forces for this project. They like the idea of SmartSat, even though we are in a time of a global financial crisis. Liquidity in MENA region is still available, but it’s all about making the right investment decisions at the right time and in the right business. They saw the business plan we had for this project, and they said it made perfect financial and business sense as this is a telecoms venture away from the stock market and away from the real estate, which have collapsed since August 2008.
VIA SATELLITE: What are capital expenditure plans in terms of ordering satellites?
DERBAS: We now have a shortlist of three manufacturers: Derbas Alenia Space, Loral and Orbital. We are still in negotiations regarding technical specifications. We expect to make an announcement in May in terms of who wins the contract. We are at the final stage in terms of technical specifications and things like that.