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Abu Dhabi, UAEFriday 20 July 2018

Exclusive: Yahsat's new satellite to service mobility and Internet of Things, driving growth

As connected sensors proliferate, the Mubadala-owned satellite operator sees an opportunity in live asset tracking

Yahsat chief executive Masood Sharif Mahmood says the company could explore affordable Internet service in the developing world through tie-ups with governments . Antonie Robertson/The National
Yahsat chief executive Masood Sharif Mahmood says the company could explore affordable Internet service in the developing world through tie-ups with governments . Antonie Robertson/The National

Yahsat, the Mubadala Investment Company-owned satellite operator, anticipates higher growth from its satellite broadband business as it looks to enter the mobility and Internet of Things segments (IoT) as well as possibly compete with telecoms service providers, according to its chief executive.

“Everything is sensored and metered and [whether consumers] choose telecoms service providers or satellite is not a big challenge. What we’re seeing is that, as the industry starts providing live solutions on the sensors - mobile solutions - then the adoption of this will be on a higher sort of scale,” Masood Sharif Mahmood told The National at the company’s headquarters in Abu Dhabi. He was referring to live asset tracking through GPS, which is increasingly becoming merged with business analytics and artificial intelligence, particularly when it comes to cross-country, regional mobility, which can be better serviced by satellite over telecoms service providers.

The operator, which launched its third satellite Al Yah 3 in January, is anticipating greater demand for satellite broadband services on the back of higher uptake in IoT-serviced industries such as oil and gas and on the growth of sustainable cities in the region. According to US-based International Data Corporation, the IoT market in the Middle East and Africa is set to grow 15 per cent in 2018 to reach $6.99 billion in 2018 and $12.62bn by 2021

The company's ongoing acquisition of a majority stake in fellow UAE satellite operator Thuraya was also considered as part of efforts to grow its mobility segment, added Mr Mahmood. He declined to specify Yahsat’s stake in the operator or the value of the transaction.

Al Yah 3, which completed orbital testing at the end of May, is expected to increase the operator’s footprint in an additional 19 countries, including newer markets in Latin America and Brazil. The operator currently has two other satellites - Al Yah 1 and Al Yah 2, which provide government solutions, satellite TV and satellite broadband across the Middle East, Africa, central and south-west Asia, with its coverage penetrating remote access areas.

“When we mix our old fleet and the new fleet our satellite broadband will cover 60 per cent of the populations of Africa and 95 per cent of the population of Brazil,” said Mr Mahmood.

YahClick, as the operator’s satellite broadband service is known, has grown to cover around 50,000 devices, he added. While this satellite broadband connectivity is available through retailers in the markets covered by Yahsat, often remote localities, it is also the third licensed operator for internet services in the UAE. While YahClick provides connectivity to the oil and gas industry as well as services requiring remote connectivity in the Emirates, Mr Mahmood said it would be a while before it becomes competitive with telecoms service providers.

“It’s the equivalent of sending fibre into the sky and the satellites are 36,000km away, so really scare resource capacity,” he said.

Yahsat, which specialises in coverage of unserved, digitally-remote areas, will eventually target providing connectivity to already served segments in cities as well.

“The way technology is moving, we think that it will be able to compete in the served ring as well. That will be the future,” said Mr Mahmood.

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The firm also looks to draw in revenues from a planned roll-out of WiFi services with regional carriers. YahSat has already trialled such a service on board Etihad aircraft.

"We reached high speeds of up to 50 Mbps [megabits per second] versus the existing airline legacy systems that are around four or five Mbps, so we’re talking about a 10 fold increase,” said Mr Mahmood,

“We are continuing our development of this project with Etihad Airways and we are in early discussions with few other airline operators here,” he added.

The challenge moving forward, he noted, is to make such services affordable to consumers as well as encourage their take-up in the region, where on board WiFi is still viewed as a luxury and faces competition from legacy infrastructure such as in-flight entertainment.

YahSat also sees opportunities in the developing world to provide affordable basic internet connectivity to bridge the digital divide, especially through partnerships with governments.

Citing Free Basics, the affordable internet service launched by Facebook in less developed economies, Mr Mahmood said should his company enter this segment, it would look at doing things differently.

"Free Basics is a model that Facebook rolled out and it has not been successful for a variety of reasons,” he said

“If we price it in the right way and to the right target segment, then we will tie up with governments and bid for government connectivity programmes by offering an affordable price. We would [then] be able to subsidise part of that and offer it to the municipality so the end user doesn’t get the burden and has a shared approach. But it has to make commercial sense,” said Mr Mahmood.

“There are enough of those opportunities out there,” he added.