Thuraya last week signed what it described as a landmark agreement signalling its full acceptance of a $1 billion (1.2 billion euro) turnkey project for a new Thuraya satellite telephony system to be supplied by Boeing. The agreement was concluded at Thuraya’s primary gateway earth station in Sharjah, on the Arabian Gulf, between Thuraya and Boeing Satellite Systems’ sub-contractor Hughes Network Systems. Thuraya 1 was launched on Oct. 21, 2000, aboard a Boeing Sea Launch rocket. Inmarsat has leased “substantial” capacity on Thuraya until at least 2004.

The final acceptance agreement wraps up five years of system development that covered all aspects including satellite manufacturing, terminal development and billing set up. “I am pleased that Thuraya will take full charge of its systems and operations. I am fully confident that Thuraya has the expertise and the capabilities that allow it to take full charge of the system’s operation,” said Yousuf Al Sayed, Thuraya CEO. The Thuraya system is the first mobile integrated communication systems designed by Boeing.

Besides negotiating this agreement, Thuraya has spent much of the past few months extending its service footprint. On Jan. 6, Chairman Mohammad Omran revealed that he expected Thuraya’s commercial service to be launched in Iran by the end of January or early next month, followed by Saudi Arabia in February. Clearance of the procedural formalities for starting the service in Turkey are also in the final stage.

But Thuraya has hit further snags in supplying service to India, where it seems India is still insisting that Thuraya build a local base station before the Indian government grants approval for the company to sell handsets, an Indian minister said on Jan. 21. “Our doors are open to all who wish to invest in India’s telecommunications sector. At the same time, we cannot be discriminatory when it comes to implementing our own rules,” said Tapan Sikdar, Minister of State for Communications and Information Technology.

“As per these rules, Thuraya will need to set up an earth station in India for its handsets to be commercially available. In a similar situation, Iridium started working in India after deciding to invest in an earth station.” India is seen as a key market for Thuraya’s global aspirations, and as long ago as November 1999 had promised it would be ready to supply service locally by the fall of 2000. Having extended its reach steadily into Africa and Europe, Thuraya recently entered into Pakistan, Bhutan and Bangladesh.

Thuraya’s Mohammad Omran had earlier said: “In respect of India which is a large market, the Indian authorities have been insisting that we have a gateway there, whereas we have come forward with some other solutions,” he said.