Yahsat awarded $5.1bn satellite capacity and services contract by UAE

Deal is for 17 years and covers the operations, maintenance and technology management services of ground segment satellite systems

The Yahsat stand at Idex 2023. The new government mandate increases Yahsat’s contracted future revenue to Dh25.7 billion. Khushnum Bhandari / The National

Al Yah Satellite Communications, better known as Yahsat, said on Friday that its government services arm has been awarded a Dh18.7 billion ($5.1 billion) 17-year services mandate by the UAE to provide satellite capacity and managed services.

The deal covers operations, maintenance and technology management services of ground segment satellite systems and terminals currently provided under a separate contract.

The mandate will replace two current agreements, which come to an end in November and December 2026, respectively.

Yahsat, a subsidiary of Abu Dhabi’s sovereign investment arm Mubadala Investment Company, offers multi-mission satellite services in more than 150 countries across Europe, the Middle East, Africa, South America, Asia and Australasia.

Under the new mandate from the UAE government, Yahsat will provide services using its Al Yah 1 and Al Yah 2 satellites, currently in orbit, and supplement this by two new satellites, Al Yah 4 (AY4) and Al Yah 5 (AY5), which are expected to be launched in 2027 and 2028, respectively.

"This award is a testament to our long-standing relationship with the government ... by complementing our existing fleet with Al Yah 4 and Al Yah 5 next generation satellites, we will be able to serve the government with new cutting-edge solutions that are not currently possible," said Musabbeh Al Kaabi, chairman of Yahsat.

"The performance of the new satellites is expected to significantly surpass current industry capabilities including capacity, coverage and flexibility, allowing us to offer a wide range of next generation applications to our end user."

The new mandate increases Yahsat’s contracted future revenue to Dh25.7 billion, more than 16 times its 2022 annual revenue, and extends backlog well beyond 2040, while boosting the company's future cash flow.

"This is a new chapter in Yahsat’s momentous journey .... our financial position has never been stronger," said group chief executive Ali Al Hashemi.

"We remain optimistic about providing a broader, more diverse and cutting-edge solutions portfolio to both the government and our customers."

Last month, Abu Dhabi Securities Exchange-listed Yahsat, reported a 5 per cent rise in its first-half income, boosted by the strong performance of its infrastructure business. Normalised profit for the six-month period to the end of June climbed to $48 million, the company said.

In June, Yahsat signed an agreement with Airbus for the construction of AY4 and AY5.

The AY4 and AY5 procurement, including spacecraft, ground segment infrastructure, launch and insurance, will be funded by Yahsat’s own resources, in addition to other potential funding options and an advance payment from the government of $1 billion, to be received in 2024, the company said.

The company currently has five satellites that extend its reach to more than 80 per cent of the world’s population, enabling critical communications such as broadband connectivity, broadcasting and mobility solutions.

In May, Bayanat, a geospatial data products and services provider, and Yahsat launched a space programme aimed at building national satellite remote sensing and Earth observation capabilities within the UAE.

The space programme will look for business opportunities in the local and global Earth observation market, Bayanat said in a statement to the ADX at the time.