Satellite Capacity in the Middle East -Famine or Feast?

By | March 3, 2009 | CABSAT

The first day of CABSAT MENA and SATELITE MENA 2009 was dominated of talk of the changing capacity situation that could evolve in the Middle East over the next two years.
    There are huge demands for satellite capacity right now, and this is putting huge pressure on players desperate to access capacity, Neil Ashworth, director, business development and strategy, CET Teleport, said. “This is the most constrained of any region in the world in terms of getting hold of satellite capacity. The problem is, this is where the growth market is,” he said March 2 during “The MENA Satellite Capacity Conundrum. Regional Growth Factors, International Growth Trends in Demand and Supply” panel.
    The lack of capacity makes it tough for companies like CET Teleport, which need capacity to do deals with customers. “Our industry has been less affected by the recession than other industries, but there are lots of pressures out there. Satellite operators are like bankers who can’t lend. Service providers are like businesses who can’t gain access to funds. Capacity is like a funding arrangement of us,” said Ashworth.
    But this situation could turn dramatically in the favor of the capacity customers in just a few years, with 13 satellites that will provide coverage of the Middle East slated for launch by the end of 2010, said Ashworth. “Right now, we are a bust situation in terms of capacity. In 2010, we could be in a boom situation. The possible result is that there could be oversupply of capacity from 2010 onwards,” he said.

Broadcast Explosion
    One of the reasons for the high demand for satellite capacity, is a seemingly insatiable appetite on behalf of broadcasters to bring new TV channels to the region. Jawad Abbassi, CEO of Arab Advisors, a local media consultancy, said there had been explosive growth in the free-to-air (FTA)  channel market in the Middle East. “There has been huge growth in the supply of satellite FTA channels. 80 channels have been added in the last six months in the region,” he said.
    The demand for capacity from broadcasters has enabled satellite operators across the region to benefit. According to Abbassi, “Satellite operators have reaped the benefits of the supply boom. Nilesat’s half year revenues in 2008 were $50.5 million. In the first half of 2007, they were $43.7 million,” he said.
    On a later panel, Mohamed Youssif, chief commercial officer of Arabsat, said, “According to most industry analysts, the MENA[Middle East and North Africa]  region is expected to see the strongest growth in the next few years compared to other regional markets. We expect MENA to become a key satellite market.”
    Like others, Youssif believes the broadcast market will fuel the growth in the satellite market. “There is a large proliferation of FTA channels in the region. Broadcasting is and will remain the key market for us. There are huge demands from broadcasters for satellite capacity,” he said.

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