Al Yah Satellite Communications (Yahsat), the satellite operator owned by Abu Dhabi’s sovereign fund Mubadala Investment Company, is looking to diversify its revenue base, with a focus on generating more income from data streams, its chief executive said.
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 once it adds new technology and launches another satellite into orbit in 2023, Ali Al Hashemi, group chief executive at Yahsat, told The National. It currently earns a large chunk of its income from voice services.
Yahsat on Thursday said it has selected Cobham Satcom, one of the world’s top satellite communications solutions providers, for a comprehensive mobile broadband system. The technology firm will provide ground infrastructure and products to operate across Yahsat’s entire coverage, using the Thuraya 4-NGS satellite that will be launched in 2023.
“If you think about it, the market share that we own today when it comes to IP services, is very low, so the upside is very high,” Mr Al Hashemi, who took charge of the company as chief executive in February this year, said.
“With the launch of Thuraya 4-NGS, I can say around, 20 per cent to 30 per cent of my revenue will be immediately from IP products but as we move forward, I can say I will be comparative to global players in terms of IP versus voice services.”
The deal with Cobham will boost Yahsat’s data services, providing Thuraya 4-NGS with advanced 4G and 5G capabilities. Yahsat is looking to increase its share in the global satellite data services market, which is currently valued at more than $5 billion and is projected to reach more than $19bn by 2027, according to a report by Applied Market Research on data services market.
"Our strategy going forward is to move from being voice services-centric to data centric. When it comes to voice services, we are the leader and this platform will give us the competitive advantage to compete with the market when it comes to IP services," he said.
“Market today is dominated by IP services, so when you partner with a market leader ... our strategy will be really unbeatable.”
Yahsat’s revenue for the first six months of 2021 reached $190.2 million, a 3.9 per cent year-on-year drop due to “heightened Covid-19 challenges in global markets during the first quarter of 2021”, the company said in a regulatory filing in August to the Abu Dhabi Securities Exchange, where its shares are traded.
However, revenue on quarterly basis rose 10.9 per cent to $100m in the second quarter of 2021, reflecting Yahsat’s “growth potential” despite the pandemic-driven headwinds.
Yahsat recorded improvements across its business lines in 2021 that boosted its first-half profit in line with the previous year to $30.1m. After adjusting for one-off non-recurring items, the company’s net income climbed 28 per cent to $37.1m for the period, it said at the time.
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.
“If you think about it, the market share that we own today when it comes to IP services, is very low so the upside is very high
Ali Al Hashemi,
group chief executive, Yahsat
In August last year, Yahsat signed a deal with aerospace company Airbus to build Thuraya 4-NGS, its next generation mobile telecommunications system.
Yahsat has selected billionaire Elon Musk's SpaceX to launch its mobile telecoms satellite. A Falcon 9 rocket would carry the satellite into space in the second half of 2023, the company said on Wednesday.
The company has committed to initially investing more than $500m to develop the satellite, which will be funded by Yahsat and its mobile satellite services subsidiary, Thuraya. It also plans to invest more in the coming years and its deal with Airbus includes an option to build an additional satellite identical to Thuraya 4-NGS to strengthen the coverage across the Asia-Pacific region.
Mr Al Hashemi said a decision to add more satellites is yet to be made.
“Today the whole project ... is on budget. We are on time," he said, adding that "what is currently in the pipeline is Thuraya-4", and there is nothing concrete on the table in terms of more satellites.
In June, Yahsat struck a 15-year satellite services agreement with a government customer in the UAE, adding more than $700m to its committed contract backlog, which stands at Dh7.7bn.
About 70 per cent of Yahsat’s turnover is driven by UAE government clients under long-term commitments, which set up foundation for “robust and growing dividend capacity”, according to the company.
The satellite company’s shares started trading on the ADX in July after it raised Dh2.68bn through its initial public offering, selling 975.9 million shares, or 40 per cent of its equity to investors.
Yahsat's listing was the first major IPO on the Abu Dhabi bourse since Adnoc Distribution listed its shares in 2017.
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
THE SCORES
Ireland 125 all out
(20 overs; Stirling 72, Mustafa 4-18)
UAE 125 for 5
(17 overs, Mustafa 39, D’Silva 29, Usman 29)
UAE won by five wickets
UAE currency: the story behind the money in your pockets
What is tokenisation?
Tokenisation refers to the issuance of a blockchain token, which represents a virtually tradable real, tangible asset. A tokenised asset is easily transferable, offers good liquidity, returns and is easily traded on the secondary markets.
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Founders: Abdulmajeed Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain.
Based: Riyadh
Offices: UAE, Vietnam and Germany
Founded: September, 2020
Number of employees: 70
Sector: FinTech, online payment solutions
Funding to date: $116m in two funding rounds
Investors: Checkout.com, Impact46, Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala Ventures, Nama Ventures and family offices
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
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Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Race 3
Produced: Salman Khan Films and Tips Films
Director: Remo D’Souza
Cast: Salman Khan, Anil Kapoor, Jacqueline Fernandez, Bobby Deol, Daisy Shah, Saqib Salem
Rating: 2.5 stars
US tops drug cost charts
The study of 13 essential drugs showed costs in the United States were about 300 per cent higher than the global average, followed by Germany at 126 per cent and 122 per cent in the UAE.
Thailand, Kenya and Malaysia were rated as nations with the lowest costs, about 90 per cent cheaper.
In the case of insulin, diabetic patients in the US paid five and a half times the global average, while in the UAE the costs are about 50 per cent higher than the median price of branded and generic drugs.
Some of the costliest drugs worldwide include Lipitor for high cholesterol.
The study’s price index placed the US at an exorbitant 2,170 per cent higher for Lipitor than the average global price and the UAE at the eighth spot globally with costs 252 per cent higher.
High blood pressure medication Zestril was also more than 2,680 per cent higher in the US and the UAE price was 187 per cent higher than the global price.
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Specs
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Dhadak
Director: Shashank Khaitan
Starring: Janhvi Kapoor, Ishaan Khattar, Ashutosh Rana
Stars: 3
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