Fresh from recapitalising credit facilities, UAE-based MSS operator Thuraya has launched a major review of its business model to capture growth in the next five – 10 years.
“We pretty much have a blank sheet of paper,” said CEO Samer Halawi in an…
Fresh from recapitalising credit facilities, UAE-based MSS operator Thuraya has launched a major review of its business model to capture growth in the next five – 10 years.
“We pretty much have a blank sheet of paper,” said CEO Samer Halawi in an interview with SatelliteFinance.
“We are looking at different plans that could lead to a third satellite, launching a new constellation, or even utilising different frequency bands.”
Halawi expects to complete this internal review by Q3 2013, when Thuraya will be looking to raise new cash to fund the plan. This funding will be dependent on the technologies the operator will be bringing to the market, and could include strategic investors, more bank debt and export credit agency financing.
“We are not going to build a business plan that would be hard to sell to investors,” he said.
This means the company will avoid a ‘build it and they will come’ approach, which Halawi believes has led to the failure of many operators in the satellite sector.
However, the company has ruled out simply replacing its current constellation with pure L-band satellites that operate in the same way as the two it currently owns.
“The L-band market is evolving, and it would be foolish to just launch satellites that replicate exactly what we are doing today,” he explained.
Thuraya is seeing growing revenues in 2012 after five years of consecutive decline. According to Halawi, this underperformance was primarily the result of an overreliance on voice services, as well as delays with launching its Asian satellite and certain products.
In March this year the group restructured US$47m of debt and improved the terms with its four main banks – UNB, ENBD and CBD of the UAE, and Amsterdam-based ING – extending its maturity into late 2014.
This has put the company in good stead to expand its operations, although it is still looking for opportunities to reduce financial expenses.
The operator’s two satellites – EMEA-focused Thuraya-2 and Asia’s Thuraya-3 – give it coverage ranging from Morocco in the West to Australia in the East. It also holds 250 roaming agreements in more than 150 counties, enabling it to cover two-thirds of the globe. But Halawi said there was a definite business case for worldwide coverage.
The majority of Thuraya’s traffic and revenues currently come from the Middle East and Africa, although it is growing faster in Asia than anywhere else.
Halawi said: “Asia as a geography is very important for us, although we are getting a lot of demand from Latin America. We obviously don’t cover Latin America by satellite, so it’s one of those emerging markets that appeal to us as we look for our next capabilities.”
The MSS sector as a whole is undergoing rapid transformation as operators such as Inmarsat and Iridium prepare to offer next generation services, which are helping to blur lines between the industry and FSS. Against the backdrop of this evolving playing field, both MSS and FSS operators are seeking new ways to tap the insatiable demand for broadband on a global scale.
