Lunasat Ready to Bring Consumer Satellite Broadband to Africa

[Satellite News – 4-14-08] Lunasat could bring satellite broadband services to consumer markets in Africa within the next two years. Ziad Monla, Lunasat’s CEO, told Satellite News, “We are keeping an eye on [ bringing satellite broadband to the consumer]. But we have not made a decision on it. It could be possible to launch services in the next two years. We are discussing a joint venture with one of the major satellite operators in Europe to launch a consumer product for Africa, but not the Middle East. I can’t say any more at this stage.” The service provider recently signed a deal with Satlynx for a broadband satellite platform for the Middle East and Africa.

Studying the Market

    Regulatory issues mean it could take a little longer to bring satellite broadband services to consumers in the Middle East. “We are currently studying that market and we are preparing all kinds of sensitivity studies, and looking at the potential needs of the clients, what they are requiring and how we could support them,” said Monla. “A lot depends on the licensing in every single country. I am very positive about the future of that business. I am very positive about that whole business, especially as markets are deregulating. Some governments are going a bit slow in terms of deregulation, but eventually they will go, and then there will be a market.”
    While a consumer proposition is still some time away, Lunasat aims to be a major force when offering satellite broadband to business and government customers in the Middle East. The deal with Satlynx allows Lunasat to offer services based on the Satlynx Direct platform, which build on VSAT hub and modem technologies from iDirect and the Satlynx teleport facilities in Leuk, Switzerland. The Leuk teleport hosts the VSAT hub and has direct terrestrial connectivity to London and New York, giving end users in the Middle East and Africa direct access to the United States and European Internet backbones.
    “The significance of the deal is that Satlynx is the large and experienced teleport operator, they have good services and very large antennas,” said Monla. “This means you need smaller antennas on the end user side. They have quite a large satellite for their teleport, and this allows us to implement several services to our clients on several satellites. This is one of the major advantages of partnering with Satlynx. Lunasat is not only involved in the Middle East. It is very much involved in Africa. The future of the African business market is extremely promising. We are expanding into Africa and we see the needs of our clients growing in this area of the world.”

Demand for Services

    Monla believes over the next few years there will be a strong demand for satellite services in the Middle East and Africa. “I think the prospects for satellites in the Middle East and Africa are very, very good, because with all the demand on extra value-added services today, it is increasing the demand for extra capacity,” Monla said. “Fiber optic is well deployed in the Middle East. But that capacity is about to saturate. The rise in demands for capacity is not being met by increased capacity available on the ground. This is where satellite comes in. We think there will be huge growth in the next ten years, and this is where we are investing in line with the industry.”
    Lunasat could be in a good position to take advantage of this strong demand for services.
    “We have focused on the corporate market,” Monla said. “Our clients are, for example, banks based in the Middle East, who are expanding into Africa, and want to inter-connect different branches. We also have oil and gas clients, major telcos. The telcos are having major growth. They are expanding at a tremendous rate.”
    Monla believes the whole Middle East is experiencing somewhat of an economic boom right now, making it easier for companies like Lunasat to build strong businesses in this area. “Oil has reached $105 a barrel,” he said. “It could reach $200 before the year end. The budgets of governments used to be budgeted at $25 a barrel. They are now budgeting at $50. So they have a major surplus. They are going to be reinvesting.”

Strong Revenue Growth

    Revenue growth is already looking strong for the company in the early part of 2008. “This year, in [the first quarter of] 2008, we hit 40 percent of all the revenues we generated in 2007,” Monla said. “We are seeing very strong growth this year. We are seeing a boom in our markets. There is a larger demand for our services. We have been able to capture a strong market position over the last five years. We have 2500 clients all over the areas we are covering. In Iraq, we have deployed over 3,000 [Very Small Aperture Terminals].”
    However, despite this growth, Monla still is cautious, having seen boom and bust cycles in the satellite industry before. “This industry is a very volatile industry,” he said. “You see changes happening all the time. Over the last five years, we have seen a lot of companies growing fast than disappearing. You need to be able to sustain growth, to be on top of the currents, to know where clients are going, where they are heading and adapting very fast to their requirements.”

Satlynx Perspective

    The deal with Lunasat was also a key one for Satlynx. “As a provider of both wholesale and end-to-end services for the corporate and government markets it is key for us to develop our presence in the Middle East and Africa,” Satlynx’s Vice President of marketing and business development Andy Frost told Satellite News. “Lunasat is a service provider who can help us achieve this strategy and along with our own efforts to deliver services across the region are aiming to become a leading player in this as well as the global arena.”
    Frost said he is optimistic about Satlynx’s business prospects in the next year. “For the next year or so, as business and Satlynx continues to grow, the range of services it offers and the markets and territories that it addresses,” he said. “As an integral business with GE we are finding new channels to market alongside GE offerings where a high degree of synergy exists between its markets and our own, typically oil and gas, energy and industrial where we are finding new customers both internal and external.”