Home >> April 2012 Edition >> The Forrester Focus: The Middle East Continues To Make Strides
The Forrester Focus: The Middle East Continues To Make Strides
By Chris Forrester, Editorial Director, Broadgate Publishing + SatNews Publisher’s European Editor

forresterhead Even more than bridging The annual Dubai CabSat show was another humdinger and bigger than ever—some major players were in town to show their flags and make heavyweight statements that the Middle East/Africa markets are just as important to them as North America, Europe, or the Asian region. Indeed, while Arabsat’s giant booth dominated the satellite ‘end’ of the hall (Sony and the likes of Panasonic were at the other end), it was SES which had a significant presence, both in terms of booth size and staffing, especially when you include the O3b booth and YahSat/YahLive contingent. It was also interesting to see SES Platform Services present and busy.

There were a slew of YahSat/YahLive stories issued, not the least includes the signatures on a Newtec deal (with YahSat) and strong statements from YahLive as to the HDTV contracts they were securing. The only dilemma, and perfectly normal at the start of any new venture, was the near-silence as to what the value in transponder rental leases represented in the short term.

forresterFig1 Eutelsat were not to be outdone, and while their floorspace might not have been as large as Arabsat’s (or that of SES) again it was noted that CEO Michel de Rosen was in town making courtesy calls along with Jacques Dutronc (Eutelsat’s Chief Development and Innovation Officer) and Andrew Wallace (CCO) amongst many other Paris-based visitors.

Of course, these senior folk have plenty to discuss. Topmost was people’s curiosity whether Eutelsat and Arabsat would solve their 25.5 degrees East squabble which directly affects Eutelsat’s project with Qatar’s Es’Hail 1 craft that is due to launch later next year. Despite smiles all around—and suggestions from some of the parties directly involved that an agreement is extremely close—there was no ‘white smoke’ or even a burnt kebab to suggest a deal had been struck.

The pressure, however, is on for a bargain to be struck, given that Qatar’s Es’hail 1 is in build, and a large slice of its Ku-/Ka-band capacity already sold or committed by Qatari governmental and broadcasting interests. Al Jazeera is just waiting for a successful launch, for example. Incidentally, while Qatar Satellite Company was NOT present at CabSat as far as square footage was concerned, they were very much in evidence at the Doha QitCOM event last week.

forresterFig2 Arabsat was busy with a constant stream of visitors. Their team were enthusiastic about the growth of HDTV, promising 40+ channels would be on air by the end of this year. There was also optimism about their planned expansion “to the East”, and the possibilities about acquiring Malaysia’s Measat (see separate story).

Arabsat’s arch-rivals Nilesat had a smaller booth at CabSat, and without Salah Hamza who, despite just gaining promotion to CEO (officially he was ‘Chief Engineer’ previously), had too much on his plate in Cairo to travel to Dubai.

Nevertheless, the numbers—in terms of channels—are simply staggering, and seem to continue to grow like a garden weed. Nilesat/Eutelsat’s 7 degrees West hot spot neighbourhood (and not forgetting Noorsat, which also has a slice of this action via its ‘virtual’ satellite operation using Eutelsat capacity) is now carrying a massive 822 channels, and growing day by day (and up 35 percent in 2011).

forresterfig3 Arabsat, not to be outdone, claimed 450+ free-to-air TV channels on its system, 35+ HDTV (and a 3D channel) just at the moment, and the fruits of three payTV networks, as well as “the largest Arab community in the sky”. The claim is more than validated by its GlobeCast links over North and South America and the Asian/Australia reach where the GlobeCast Global Arab Bouquet delivers.

It is worth remembering that despite three years of doom and gloom, and where the Gulf economy—and in particular Dubai—was squeezed, the general consensus is that the Emirate is back on its feet and looking forward again. Indeed, the chutzpah (not a word you hear much in Arab circles) exhibited by Dubai is just enormous. The tallest building on the planet at the Burg Khalifa, the biggest this, and the grandest that! Cheeky Dubai is building a brand new airport, spending US$34 billion on a brand-new facility that will be the biggest and busiest on the planet when it opens in 2027.

OK, I hear you say, they’ve plenty of desert to fill. And you are right, but they’ve also got the ‘vision’—a vision that will provide in various Gulf locations 10 new shopping malls (and the one beneath the Burg Khalifa is truly enormous) on the basis, it seems, that ‘if we build it, they will come’.

Broadcasting shares this same optimism. The suggestions locally are that the Arab Spring, as well as creating a clutch of new governments will unleash plenty of private cash some of which will percolate into new privately-funded TV channels where previously they were forbidden.

Indeed, as a proof of this trend, even ultra-conservative Saudi Arabia’s deputy minister for culture and information, Dr. Riyadh Najm, speaking at Arabsat’s media forum, said he was confident that private channels would be allowed to domicile themselves in Saudi Arabia, a near-unthinkable decision just a few years ago.

In other words, this region will continue to provide growth for satellite operators and the industry’s broadcasting equipment vendors. Which is why so many players were busy at CabSat. The future looks bright!

And, speaking of the Middle East, as we were, Israel’s AMOS 5 satellite is “ready to work”.

Spacecom’s Amos5, launched on December 11, 2011, by ILS from Baikonur, was commercialised on January 25th. Some C-band clients have recently been relocating from Spacecom’s temporary leased capacity (the former AsiaSat-2) to the new satellite at 17 degrees East. However, there are also further considerable expansion plans afoot with rumours that a new satellite order for Amos-6 can be expected in the next few weeks, and that the new craft will be equipped with Ku-band and extra capacity from Ka-band.

CCom_ad_SM0412 Gil Ilany, Spacecom’s VP/Marketing, in London recently for a series of briefings, said the in-orbit tests had all wrapped, and that EIRP-levels were working out to be as high as planned for both its C-and Ku-band deployments. Amos-5 was built to focus on Africa, and has, says Ilany, a wide portfolio of customers now signing up for service. “The potential deals are most attractive, although most customers were waiting until all was well. Those people are now confirming their business, and this includes clients in Europe.”

The bulk of that business is coming from telcos and similar service providers. Now the extra capacity can come into play and Amos—although not alone—sees considerable business coming from trunking, backhaul and similar satellite-based traffic in both broadcast and data services. Ilany says that they are seeing good, solid business being done at attractive transponder rates. The growth in demand meant potential revenues were not subject to over-supply of bandwidth, said Ilany, and that prices/transponder are holding up very well.

Ilany is sensitive about what that business backlog might be in U.S. dollar terms, and with Spacecom being a quoted company, was reluctant to be specific without his CFO’s approval. However, he said that they were anticipating a high fill rate. “We are experiencing much greater demand than we anticipated,” he added.

forresterfig4 Amos-5 additionally has a powerful C-band footprint with concentrations on Nigeria and another that connects one powerful beam across Central Africa (include the former French territories which also enjoy a Ku-band focus) through to East Africa. Its Africa Ku-band coverage also includes a Southern Africa beam, with beams also hitting Nigeria and Kenya/East Africa.

Elevation angles are excellent, which reduces the risk of interference. Ilany says this is key because local regulations in Africa are less enforced than Europe and thus teleports always have to worry about interference. Ilany added that all of its existing teleport clients were on board with the new satellite, and gearing up for new services.

Ilany recognises that Ku-band, and its rain fade problems, represents a harder sell than C-band, but says Spacecom is seeing more and more interest in Ku-band for its DTH potential. “And this also includes cellular backhaul, where we are in discussions with a major player who will use us for mobile cellular backhaul in Ku-. Backhaul is a critical infrastructure for mobile operators in these regions. Its usage is booming. There is some microwave and a little fibre, but our satellite sector is growing in importance. With the right configuration and the right planning it all works with very high availability—and it’s more cost effective. Amos-5 has a powerful C-band beam peak just West of Nigeria, and a Ku-band peak with concentrations over Nigeria, but both providing great coverage over Central Africa including the Francophone territories and stretching to East Africa.

forresterfig5 “We also have a lot of aspirations for DTH in the region. A European investor is looking at a major play in Southern Africa, for example. We are also in contact with major DTH entrepreneurs in West Africa, and the same in East Africa. Many of the pay-TV projects start, or depend, on DTH for their core infrastructure and then roll out a terrestrial service on DTT. We are talking to these sorts of players and hope to be able to announce deals before the end of the year. DTH is the best quality, and the lowest costs for consumers.”

Ilany added that most of the embryonic and would-be DTH broadcasters planning for Africa national or regional coverage need to carve out new customer niches while recognising that sport might not be part of their offering. This assumes that Multichoice/SuperSport continues to dominate sports-based pay-TV transmissions over the region, although there could be more interest as and when the current TV rights come up for renewal.

One current change to Spacecom’s portfolio of clients (at 4 degrees West) was caused by the USA’s withdrawal of the military from Iraq just before the Christmas holiday. This reduced the demand from the U.S. Department of Defense (DoD) and governmental demand, generally. Amos was supplying capacity for troop entertainment and home contact. This has freed up some much-needed capacity, says Ilany. He said that Spacecom’s aim is to have five satellites working from 3 orbital slots within the next 3 years.

forresterfig6 Amos 5: technical specs
C and Ku-band frequencies
14 x 72 MHz tsp (C-band)
x 36 MHz tsp (C-band)
18 x 72 MHz tsp (Ku-band)

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Dubai predicts 7,000 media/IT-related companies

Dr. Amina Al Rustamani heads up Dubai’s Media City and related business parks, already home to some 4,500 businesses in the various “City” Free Zone enterprises scattered up and down the Sheikh Zayed Road, Dubai.

Speaking at the Dubai CabSat show she says that, at least as far as Dubai is concerned, the recession is over, and declared that 2012 is the year where she expects more growth. However, even in the past year or two when Dubai was undoubtedly still suffering from the global recession, Dubai managed to attract 654 new companies to one or other of its business parks.

Of course, some businesses closed during the downturn, but now Dr. Al Rustamani says it is time to be positive again. She is cautiously optimistic that Dubai’s relentless growth should continue, telling journalists that adding another 7,000 IT-related companies over the next 10 years is quite possible.

“It’s not that people just get amazed with what they see physically—the first thing they look at is the legal framework, not just the real estate... What made these projects successful is two factors—the Dubai factor, and the second is the commitment of the government to make this a free zone and really operate as a free zone,” she told Arabian Business.

She says that despite ample talk of doom and gloom these past few years, and global stories reporting the 60 percent fall in Dubai real estate prices, the Emirate is back on a growth curve.

Dubai’s five core ‘City’ Free Zone real-estate schemes are currently 82.1 percent filled, and between them employ almost 70,000 people, not the least including some of the Gulf’s major broadcasters.

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Qatar Makes FTTH Commitment

The gas-rich state of Qatar used QitCOM, its annual high-tech fair and conference, to announce that it would be funding the deployment of FTTH to all business premises and 95 percent of households by 2015.

The deployment will be under the control of Qatar’s National Broadband Network Company. The Minister of Business and Trade, Sheikh Jassim al-Thani, is Q.NBN’s board chairman.

“The establishment of Qatar National Broadband Network Company with the mandate to build a nationwide high-speed fibre optics network is crucial to the development of business, economic growth, innovation and enhanced services to all citizens and residents. It should transform the way we live and work. And I am confident that we will receive the utmost co-operation possible from all parties concerned to achieve the network rollout as planned,” Sheikh Jassim said.

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Amos 4 + 6

Together with Amos 5, two new satellites (Amos 4 and 6) will greatly expand Spacecom’s capacity. Extra capacity is coming on stream covering Central and Eastern Europe, and the Baltic regions, as well the Middle East generally and Africa in particular. This expansion in capacity will drive Spacecom’s revenues forward dramatically, and some reports suggest that the overall aim is to see a tripling of revenues within about five years. The diversification is necessary. Some 35 percent of Spacecom’s current revenues flow from the ‘Yes’ DTH operator over Israel. Thankfully, Yes has expanded, both in the number of channels on offer and with its shift to HDTV (and even 3D). Amos 4 will go to 65 degrees East, and is now scheduled for a 2013 launch, perhaps using a SpaceX rocket with which it has a launch option. Amos 6 will go to 4 degrees West, scheduled for launch in 2014 and will replace Amos 2.