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Regional Satellite Operators Examine Demand for Data and Partnering With LEO Constellations

By | September 13, 2022

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PARIS — Regional operators from around the world are examining their place in the new world order of satellite, particularly the importance of data and how Low-Earth Orbit (LEO) constellations may impact their businesses.

Arabsat, which currently operates 10 Geostationary (GEO) satellites and has another three in the pipeline, is looking at how its business will evolve going forward. Speaking Tuesday at World Satellite Business Week in Paris, Abdulhadi Alhasani, vice president and chief strategy officer of Arabsat, said that he believes software-defined satellites are the future and the company’s secret weapon against constellations, and that data has “huge” potential to drive revenues.

Alhasani said in some instances, Arabsat is not able to serve some non-broadcast customers because it does not have the capacity right now. He gave a recent example of a potential customer that wanted to connect 2,000 schools in rural, remote areas within six months for e-learning. Arabsat was not in a position to meet the need. “This is what we need to change,” he said.

However, Alhasani is optimistic for the future and software-defined satellites. The operator is also considering forming closer ties with LEO players.

“Are constellations are a threat to our business?” Alhasani asked. “No. We don’t have $800 million to bet on a constellation slot machine. Are we talking to them? Yes. We need the standards, technical solutions. But, we definitely see a future there [in terms of partnership].”

Arabsat’s business is split 50/50 between video and data. While video has not disappeared, partly due to slower over-the-top (OTT) adoption in some markets, Alhasani says growth for Arabsat will come from data.

“Data is becoming more and more monetized,” he said. “That is why we need to move down the value chain and become closer to customers. We are now more focused on vertical integration and becoming closer to customers. We will unlock a number of new use cases. We want to make capacity available to everyone. We are moving away from the traditional ways of doing business.”

KT Sat, the only satellite operator in Korea, has five GEO satellites and placed an order with Thales Alenia Space for Koreasat 6A on Monday. The operator provides direct-to-home broadcasting in Korea, and mainly focuses on markets around South East Asia. It derives around 50% of its revenues from broadband distribution. The company also recently started a space data business and invested in startup Mangata Networks.

Kyungmin David Song, CEO of KT Sat, explained the investment, as well as about possible collaborations with LEO players.  “We invested [in Mangata] as a minor shareholder. We are the only strategic investor. It is a MEO/HEO constellation with creative designs which are very price competitive. We need capacities other than GEO. We want to have NGSO capacity. We want to have LEO capacity too. We are also having separate discussions with LEO operators about offering LEO services in Korea.”

Like Arabsat, the operator needs more capacity to serve its data customers. Song added, “There are a lot of needs in SE Asia for universal service. The needs are increasing. Users are asking us for capacity. USO is one of the key data needs that we have. You also have data communications in mobility. We provide a maritime service. Maritime customers need more capacity. We are sold out on maritime. We have limited coverage, but there is a strong demand.”

Hispasat, another regional operator, now generates almost 70% of its revenues from Latin America. It also recently acquired service provider AXESS Networks. Hispasat CEO Miguel Angel Panduro said that the recent COVID pandemic had shown in even stronger terms the difference between rural and urban communities when it comes to digital services.

“We are developing several government initiatives to reduce the digital divide [in Latin America]. I think we have a responsibility here,” Panduro said.

Hispasat previously invested in now-defunct LeoSat, so its relationship with LEOs has been patchy, however Panduro said that the operator is still looking at partnering with LEO players going forward.

Turksat, the national satellite operator for Turkey, expects to see a significant evolution of revenues over the next five years. The operator currently has five satellites. On its satellite business, it generates 75% from broadcast, and 25% from data.

CEO Hasan Huseyin Ertok believes that revenue share of video and data will move to 50/50 over the next five years, and Turksat wants to make more of an impact in international markets. Its new satellites 5A/5B are focused on opportunities outside of Turkey.

Ertok said of the possibility for LEO services in Turkey, “We cannot say we don’t care [about LEOs]. We are not going to invest in LEO constellations. But, we would like to have business relationships with them. They will be complementary with our satellites. We would like to provide that capacity to our customers. We have had discussions with OneWeb and Starlink, but nothing is finalized. But, we would like to have relationships with LEO operators. We would like to have some cooperation.”