Global VSAT Review: When Developing Regions Emerge
By David Hartshorn
Here is a wager for you: stop a satellite industry sales executive in the hallway and ask him or her to rank regions in terms of potential VSAT-market growth. Europe and North America would take top slots. So would Latin America and Asia. And the Middle East and Africa? Not likely. Prove me wrong, and I’ll buy you a cold beer.
My guess is that I won’t have to run a bar tab. For most of this industry’s history, the Middle East and Africa have been at the bottom of the regional-growth-potential barrel. If it wasn’t political instability or monopolistic practices holding the regions back, then lack of financing put any expectations of a regional renaissance to rest.
The bet, however, is more about traditional perceptions than it is about recent trends. In the past 24 months, there has actually been a significant shift in the Middle East and Africa toward VSAT-based service, both from the private and public sectors.
I first became aware of the shift when a representative of the Moroccan government called me. The administration, he explained, was interested in deregulating the VSAT sector, and wondered whether we could provide any guidance. Initially, I regarded the conversation as a casual inquiry by an inquisitive civil servant.
Shortly thereafter, the government of Namibia made a similar inquiry. Then Jordan followed and a few months ago, a representative of the Saudi Arabian administration called with the same question: “We are interested in liberalizing the VSAT sector. What do you suggest?”
The cynics among us–myself included–are not so easily impressed. Yet, most of the expressions of interest have since been shown to be substantive. In North Africa, Morocco has now awarded several VSAT licenses to operators, initiating the first-ever VSAT-based competition in that nation’s history.
As this magazine went to press, the Jordanian government confirmed they have completed a draft Telecom Law that includes new provisions for VSAT-based competition–and the new legislation is expected to be implemented by November.
The Saudi Arabian government, meanwhile, has not only short-listed several service providers for issuance of VSAT licenses (as reported previously in this column), but the government has now established an independent regulator.
Further south, in markets like Uganda, Botswana, Swaziland, Zambia and Mozambique, the governments have recently implemented partial deregulation of the VSAT sector, permitting local service provision by national and international players.
While regulatory problems are still common, just a few years ago if you had tried to roll out VSAT service in those nations, chances are you would have been shown the door. Today, however, extensive network deployment is possible, indeed encouraged, for applications never seriously offered in those markets.
Has reform had any local practical impact?
In April 2001, the Global VSAT Forum received only four commercial inquiries from the Middle East and Africa. In May there were nine. And in July, there were no less than 20 inquiries from the two regions.
Take, for example, Salem Agencies and Services, a Saudi Arabian systems integrator whose client, Saudi Aramco-Shell, is looking for satellite links. Or Bahrain Advanced Technology which, following a recent government decision to permit importation of satellite communications equipment, decided to enter the market.
Libya-based Al Wahat Telecommunications and Information Technology, a media provider, revealed plans to offer high-speed Internet access via interactive VSATs. International Data Exchange in Jordan is seeking opportunities related to networking equipment. And Iran Water Resource Management, which already uses interactive VSATs at dams throughout the country, is looking to upgrade its systems.
As for Africa, inquiries have been coming in from companies like Benin’s e-Business for Small Business; Zambia Telecommunications Company Ltd.; licensed ISPs in Mauritius and Nigeria; a European service provider seeking 24-hour-a-day Internet access for Guinea, Rwanda and Congo; MyGhanaMart.com, who wants to provide Internet services; and many more– most of which are driven by demand for IP-based links.
Perhaps it should come as no surprise. According to research by DTT Consulting, in 1998, the Middle East and Africa accounted for less than 10 percent of the world market for satellite-based ISP links–the third and fourth lowest regions in the world. Two years later, no less than 47 and 43 percent of African and Middle Eastern ISPs, respectively, were linked via satellite. Only Latin America–with 66 percent–was higher.
Make no mistake, serving Middle Eastern and African markets is not easy. But the pace of deregulation is accelerating, funding for network projects is more readily available, and the time is right to revisit regional rankings. To facilitate the regions’ adoption of satellite-based services, the GVF is hosting the Arab and African States VSAT Summit on Oct. 16-17 in Dubai. The complimentary event will serve as a gathering point for end users, industry and governments from throughout both regions. And if I owe anyone a cold beer, you can reach me at the Jumeirah Beach Hotel.
David Hartshorn is the Secretary General of the Global VSAT Forum. For more information, e-mail: firstname.lastname@example.org.