Al Yah Satellite Communications — better known as Yahsat — is bullish on strong revenue growth in its commercial data and satellite telecoms business, as the Abu Dhabi company prepares to launch its next satellite in 2023 and expand into new markets.
“We will be expanding our reach to more markets and business segments expanding our revenue streams from our commercial business,” Sulaiman Al Ali, chief commercial officer of Yahsat, told The National.
Mr Ali is also the chief executive of Thuraya, the mobile satellite telecoms arm of Yahsat, which it acquired from Etisalat in 2018.
In his new role as CCO, he will be leading Yahsat’s commercial business that comprises YahClick, the data solution business and Thuraya, its mobile telephone business.
Yahsat, raised its projected 2022 revenue 1.3 per cent at the end of first half 2022 to at least Dh1.54 billion ($419 million) from the earlier guidance of 1.52bn, keeping the upper end unchanged at Dh1.62bn.
The company’s first-half 2022 revenue stood at Dh755m, up more than 8 per cent from the same period a year ago with net profit attributable to shareholders for the six-month period at Dh167m, up more than 50 per cent from the same period in 2021.
“To expand revenue share of our commercial data and mobile telecoms business, we will be soon offering combined packages to our customers at globally competitive prices,” Mr Ali said.
By combining the roles of chief commercial officer of Yahsat and chief executive of Thuraya, the company expects devise a cohesive strategy to reach out to new geographies and market segments.
“In the new role as CCO, I have access to all solutions and products of the group and the markets that both companies are working on. In terms of geographies, there are a lot of common areas, offering synergies in market access strategies,” Mr Ali said.
Thuraya, currently covers 150 countries, while YahClick has a presence in 45.
In the Middle East and Africa region, both the companies have strong footprint and share a number of business partners and distributors.
“This gives us the opportunity to package a lot of solutions jointly,” he said.
“We have a solid standing in the market because of our technical capabilities and strong financial support from Mubadala and other investors.”
While a major chunk of the group’s contracted revenue for next few years will come from government projects, Mr Ali said, the contribution of commercial business in the overall revenue pool is set to rise as business expand further.
The company already has significant presence in mobile data covering small and medium enterprises and business operations in remote areas where there is no data access. In addition, it is focused on a growing maritime business catering to fishing vessels and offshore oil and gas installations, agriculture research, weather forecast and a fast-growing Internet of Things business, which the company expects to be a key driver of its commercial mobility business.
“We have a strategic plan to position Yahsat as one of the major IoT player. This is a major growth area for our commercial business,” Mr Ali said.
One of the major projects that Yahsat is working on is the Thuraya 4 Next Generation satellite (T4-NGS), which is scheduled for launch next year and to commence commercial services in the second half of 2024.
The satellite is aimed at supporting both the long-term managed capacity services agreement with the UAE government and the next generation of mobility solutions services with a focus on the mobile data, maritime and IoT segments.
The company, which is among the top-10 satellite operators in the world by revenue, expects income from its global data services to significantly rise as it launches data services using its T4-NGS with advanced 4G and 5G capabilities.
“The new satellite will enable the commercial business to offer a new portfolio of products that will cater to segments such as aero, maritime and land based applications with much greater connectivity,” Mr Ali said.
While the project is on schedule, overall, more than 80 per cent of Yahsat's Dh698m projected capital expenditure and investment in 2022 is related to the T4-NGS programme.
The capex related to the T4-NGS programme is almost fully financed through a combination of debt through export credit arrangements and significant upfront payments the company received from the UAE government.
Last year, Yahsat was also appointed by the UAE government to conduct a detailed assessment and recommendation for two new satellites, Al Yah 4 and Al Yah 5, targeted for launch in 2026.
Mr Ali expects the two new satellites will greatly enhance the service offerings of Yashat with additional capacity, coverage and capabilities to enable next-generation applications. They will also present a “significant growth opportunity” for Yahsat and will further “boost our revenue from both government contracts and commercial business”.
“The new satellites will significantly augment the capabilities of our existing satellites Al Yah 1 and Al Yah 2 with new technologies.”
The company is currently evaluating the cost of this project and how they will be financed. With a balance sheet that has very low leverage, the company said last month it has enough room to raise funds through debt to fund the programme.
Founded in 2007, the satellite operator offers multi-mission satellite services in more than 150 countries across Europe, the Middle East, Africa, South America, Asia and Australasia. It has a current fleet of five satellites that extends its reach to more than 80 per cent of the world’s population.
Mr Ali, a veteran of the UAE’s satellite telecoms business and associated with Yahsat for nearly a decade, is confident of the global competitiveness of Yahsat’s business model.
“While reliable and innovative solutions are what we offer our customers, across all markets, we are mindful of the affordability, and as such we package our products and services to suit every market segment.
The UAE’s space business ecosystem has leapfrogged over the last decade with a significant presence in the global commercial satellite telecoms and data business.
“The launch of new space programmes and the support it is getting from the government is going to create a very competitive business model that has major participation from UAE citizens, creating local manpower in this segment,” Mr Ali said.