Al Yah Satellite Communications, better known as Yahsat, aims to offer a host of new services and applications, including telemedicine, once its Thuraya-4 Next Generation Satellite (NGS) is launched next year.
The satellite aims to commence commercial services by 2025, Ali Al Hashemi, the company’s group chief executive has said.
The UAE-based satellite solutions provider also expects to double the number of oil rigs it currently provides satellite connectivity to soon, he said.
“By 2025, we expect to start offering a new airborne service through Thuraya-4 that will offer a host of applications including telemedicine and other services. Thuraya-4 will have 20 new applications, comprising commercial as well as government solutions,” Mr Al Hashemi told The National.
“This satellite will offer a versatile platform of over 20 applications, especially for the maritime, government and IoT [Internet of Things] customer segments. This will be a big strategic move that will drive us towards growth and high profitability.”
Founded in 2007, the 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.
The company reported a 5 per cent rise in its first-half income this year, boosted by the strong performance of its infrastructure business, which offers tailored solutions to government entities and remains the group’s largest business segment.
Its mobility business, Thuraya, offers satellite-based mobile solutions to different customer segments, including maritime services to fishermen.
The company plans to further increase investments in its commercial lines of business, which include oil and gas, health and education, and maritime. It also hopes to offer both mobile and fixed satellite services to meet satellite connectivity needs.
“They are indeed the emerging segments of our business. Of them, the oil and gas segment is doing very well and our revenues from this segment went up by 38 per cent year on year. We're offering our services to around 200 oil rigs globally and we plan to almost double this number of rigs in the next few years,” Mr Al Hashemi said.
The company is also looking to expand Thuraya MarineStar service, from its mobility arm Thuraya, beyond the fishery segment in Vietnam and the Philippines, its traditional markets, to others such as Indonesia.
With a strong cash position on the balance sheet and no debt, the company is now gearing up for a high growth trajectory, he said.
“The Internet of Things, direct-to-device and earth observation are the three strong growth stories that we are looking at very closely,” Mr Al Hashemi said.
“With the next-generation 6G wireless communication systems expected to roll out soon incorporating artificial intelligence, we believe 6G-based IoT networks are going to support not only massive data-driven applications but would also expand our user base. The key question will be how to integrate satellites with telecom companies to offer seamless services to IoT users.”
Yahsat is in talks with others in the market to partner with it in these emerging areas, but the “biggest challenge however is finding a spectrum and attracting investments through partners”, he added.
Yahsat expects revenue growth of above 5 per cent, between $430 million and $450 million. For 2024, however, the company hasn’t yet issued its guidance, according to Mr Al Hashemi.
“That said, we are certainly looking at a decent single-digit or high single-digit growth next year in terms of revenue, and a strong Ebitda [earnings before interest, taxes, depreciation and amortisation] margin of around 60 per cent,” he said.
When it comes to government solutions, the company currently offers its services mainly in the UAE.
However, when Al Yah 4 and Al Yah 5 satellites are launched (scheduled for 2027 and 2028, respectively), “it will open for us the door to offer more services to other governments for sure”, Mr Al Hashemi said.
“While we are offering services to other governments as well currently, our capacity will be tripled or quadrupled with Al Yah 4 and Al Yah 5 satellites.”
The company is anticipating strong future growth in some of the non-government segments of its business.
“In 2023, the proportion of our revenues that will be generated from government contracts is going to be over 70 per cent of the total. If you fast forward it, we expect that to decrease to around the mid-60s in four or five years,” he said.
“This is despite having the new contract worth $5.1 billion that our government services arm secured in September from the UAE government to provide satellite capacity and managed services for 17 years.”
Last month, Yahsat was awarded the 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 new contract is the largest one that Yahsat has ever secured, which gives clear visibility of our future cash flow, as it increases our contracted future revenues to Dh25.7 billion ($7 billion), over 16 times our 2022 annual revenues, extending backlog well beyond 2040,” Mr Al Hashemi said.
The company is also looking to acquire assets globally.
“We are surely on the lookout for opportunities that make sense strategically and financially. There were a few opportunities that we looked at in recent times but didn’t move ahead because they don't meet the required return thresholds,” he said.
“Unlike a lot of these other satellite companies, we can act quickly when a good opportunity comes along.”