[Satellite News 05-31-11] Broadcast and teleport services provider Belgium Satellite Services (BSS) is close to signing a new partnership deal in Africa as part of its efforts to boost its position in the EMEA region’s data markets, BSS CEO Nitin Dhawan told Satellite News.

    While Dhawan does not consider the EMEA region a new market, he believes the region holds value as an untapped market. “We have tried for nearly three years but so far have not had much of success in the Middle East and Africa,” said Dhawan. “With the booming data demand worldwide, we anticipate this market to grow in the coming five to seven years at least. In the recent past, we have also focused on providing solutions to government and military markets where demand and investment is continuously growing. We are possibly looking at inorganic methods of growth such as acquisitions and partnerships. It is an era of consolidation so we are working towards that now. We shall soon be joining forces with a strong player in Africa.”

     With the onset of more fiber in the Africa region, the role for satellite companies is coming under more pressure. To counter this, BSS has diversified its revenue streams. BSS now generates 40 percent of its revenues from data services, with voice and broadcast accounting for 30 percent each. BSS was formed through the acquisition of Belgian telco Belgacom’s satellite services division by a Silicon Valley-funded IT transnational entity headquartered in India.

    Keeping BSS’ telecom background in mind, Dhawan still believes that the voice termination market will continue to produce strong demand for services. “Fiber is still not most reliable source in Africa at least. Reliability is a big question mark and also with fiber reaching only the main cities, our trunking business ideally will continue to grow. Ideally we feel that the erosion of the trunking market has slowed down and shall soon cease. We are also positive about the GSM trunking business, which has always helped GSM operators achieve faster roll-out and reach those areas where microwave or fiber is a problem,” said Dhawan.

    Dhawan is concerned that companies such as BSS might see increased pricing pressure as end users increase their demands. “We are already observing end retail prices going down. We think a major contribution has to come from satellite providers. Satellite providers work generally at 60 percent plus EBITDA, while teleport operators have EBITDAs between 5 percent and 20 percent and retail service providers have EBITDA between 5 percent and 10 percent. Thus, we think there is a strong in-balance in the satellite industry. Bringing satellite capacity pricing down will indirectly bring the overall solution price down. It is high time that this responsibility is understood and accepted or satellite will see downfall in its demand, not by choice but because of these high costs.”

    Dhawan also is wary of unscrupulous competition in African markets and believes that many players are working towards profitability without accountability. “BSS from its inception has always believed strongly in pure business ethics and excellent technical service as a teleport operator,” he said. “Many operators I have seen especially targeting African market, are focusing on ‘selling only’ rather than providing good service.  So, I already see a growing gap between a good and cheap solution. Many who are unaware of complexity of the technology, get trapped in this gap and take wrong decisions.”