By Nick Mitsis
When one thinks of satellite communications and the Middle East, 24-hour-a-day combat operations executed in part through the use of space-based technology materialize in one's mind. Even though the recent political unrest plaguing this part of the world has proven to be advantageous for satellite service providers fighting their own corporate financial battles, the buck does not stop there. In fact, near- and long-term satellite users within the Middle East seem likely to change garb from army fatigues to a jacket and tie, and commercial satellite solutions promise to advance beyond their military counterparts.
As a new year approaches and a more peaceful reality hopefully begins to engulf the region, satellite industry executives are refocusing on concrete business applications that are in dire demand from Israel to Kuwait. And for the Middle East, these market segments fall into two main areas: broadcasting and broadband.
The Regional Play
This part of the world already has a satellite communications sector backboned by some of its pertinent regional satellite providers, Arabsat and Spacecom, along with Thuraya Satellite Telecommunications Co. Together, these companies offer mobile, fixed, broadcast, telephony and broadband services to the region.
Among these players, the Saudi Arabian-based Arab Satellite Communications Organization (Arabsat) serves its 21 member countries with four spacecraft offering broadband, telephony and broadcast services. Even though this player has been transmitting programming in the Arab region since 1976, it has faced some business challenges that are still hampering its core content business today. Most notably, in December 2001, eight transponders out of 20 on Arabsat 3A failed, due to an electrical power anomaly following the breakdown of one of its two solar arrays. Many analog broadcasting channels and multiplexes were relocated to Arabsat 2A because of the failure.
Arabsat 3A, an Alcatel spacebus 3000 spacecraft, was launched by an Ariane 4 rocket on February 26, 1999, and co-located with Arabsat 2A at 26 degreesE. By the end of December 2001, Arabsat 3A was still operational, but with a drastically reduced transponder loading. Likewise, there were only two analog channels reported operating on this satellite, Abu Dhabi (11840 H) and Algeria 3 (11897 V).
This past June, Arabsat transferred the analog service from Arabsat 2A to Arabsat 2C, according to company officials. Viewers continued to receive programming by using the same receivers and antennas in the same direction, but viewers needed to retune their receivers for the new frequencies and adjust the feed-horns for the new polarities. The new setting is expected to continue for the coming three years without any change.
Focusing on its broadcasting client base is paramount for Arabsat because this is by far one of the strongest applications within the region for satellite services. In fact, some industry research indicates that the Arabic pay-TV market sector comprises 400,000 households with growth expectations to reach 500,000 households within the next few years. The report "Middle East Satellite Communications and Internet Via Satellite," published last year by U.K.-based DTT Consulting Ltd., further states that there is considerable room for growth in the number of specialized TV channels and international programming aimed at non-Arabic nationals living in the Middle East. Understanding this dynamic, Arabsat's newest spacecraft Arabsat 2D has been transmitting three digital bouquets since this past April, carrying 30 TV digital programs in addition to private TV broadcasting of some of Arab states.
Like Arabsat, Spacecom Ltd., also offers broadcast services within the Middle East region. The Israeli company is the marketer and service provider of the Amos 1 and soon, Amos 2, satellites, both at 4 degreesW.
The Amos 2 satellite, slated for a December 2003 launch aboard an Ariane 5 rocket, will expand Spacecom's reach, bridging the company's established satellite footprint in the Middle East with a cross-connect link between the United States and the region. Primarily, Amos 2 will give Spacecom a vital link to the U.S. IP backbone and other broadband services, positioning the company to take advantage of future market segment growth.
As the broadcasting arena strengthens, broadband applications are also a growing part of the satellite business within the Middle East. But in general, this region has been the slowest in expanding this market application. In fact, of the last four countries without conventional commercial dial-up ISPs, three were in the Middle East--Afghanistan, Iraq and Syria, according to the U.K. report. Since last year, broadband availability within the Middle East began to grow. The number of users, the report states, grew 88 percent between April 2001 and September 2002.
Rounding out the regional play is the mobile satellite carrier Thuraya. Since the late 1990s, the United Arab Emirates-based company has been offering satellite telephony service through mobile phones that combine satellite, GSM and GPS.
The Thuraya 2 satellite was put into orbit this past June aboard a Zenit 3SL rocket, which also deployed Thuraya 1 in 2000. Thuraya 2 will build on the company's current offerings, but may also be used to open up new directions for growth by allowing the company to bolster capacity in some areas, expand into new markets or diversify into new satellite-based applications.
If there is an application expansion for Thuraya for enhanced mobile services, it may not come without challenges. Even though approximately a quarter of the households in the region now have a fixed telephone line, mobile penetration is still behind the competitive curve, according to industry reports. The U.K. report mentioned above says a little more than 100 mobile lines per 1,000 people make up that landscape in the Middle East, while close to 150 lines per 1,000 people round out the fixed line arena. Likewise, the Internet access market is significantly different than that of other regions, the report adds, stating there is more use of prepaid card and Internet cafes.
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