A year-end summary of key events is always a difficult task. How to select, which ones to highlight out of the many things that have happened and are still unfolding? This article focuses on Europe, the Middle East and Africa, (EMEA), so I have to start with Yahsat and Thuraya.
The acquisition was first announced in April of this year, and at the beginning of August, Yahsat stated that its subsidiary Star Satellite Communications, had acquired a majority stake in Thuraya. After meeting regulatory approval, Star purchased Etisalat’s 28.042% stake in the company for US$37 million. Yahsat had previously set a condition that the stake acquired, must give Yahsat at least 75.001% of Thuraya.
Thuraya operates two L-Band satellites (both of which are coming to the end of their life), providing mobile service over much of the world, with the exception of the Americas. Yahsat, operates three satellites in C, Ku and Ka-Band, covering EMEA and South America and Asia.
Yahsat has indicated that it is keen to be a player in the Internet-of-Things (IoT) market, and acquiring an L-Band operator, is expected to boost its capabilities in this segment. The CEO of Yahsat, Masood Sharif Mahmood, told The National (an English language, online news service, based in Abu Dhabi), that it “anticipates higher growth from its satellite broadband business as it looks to enter the mobility and IoT market, as well as possibly competing with telecoms service providers.” According to International Data Corporation, the IoT market in the Middle East and Africa is set to grow 15 per cent to reach US$ 6.99 billion this year, and US$ 12.62 Billion by 2021. The company is particularly interested in live asset tracking, combined with analytics and artificial intelligence for regional mobility. Mubadala, Yahsat’s owner, has significant investments in artificial intelligence and IoT solutions, amongst other things. And of course, cross border tracking, gives satellite a competitive edge compared to national telecoms operators.
Following the announcement in August, Yahsat has stated that it is intending to order two replacement L-Band satellites.
The relatively low connectivity rates in much of Africa, make this region a prime target for satellite operators hoping to help bridge the digital divide. According to Internet World Stats, at the beginning of 2018, only 35.2% of Africans are internet users, compared to 58.4% for the rest of the world. Behind this average statistic however, lie some seriously low numbers. In Eritrea, only 1.4% of the population has access to the internet. Other countries with equally disturbing connectivity rates, include Niger, Chad, Burundi and Western Sahara, all with penetration rates below 6%.
The correlation between investment in broadband connectivity and the growth of economic activity is well known. According to the World Bank, for every 10 per cent increase in broadband connectivity in developing nations, GDP rises by 1.38 per cent. This fact is not lost on satellite operators, many of whom see this as a business opportunity, even though the business case is notoriously hard to close.
Intelsat and Gilat, for example, have partnered in Uganda, for a pilot program, to provide connectivity to two rural communities. The aim of the pilot study is to demonstrate the ease of deploying a satellite solution and to study the commercial viability of the solution. The Ugandan government has a target of achieving 100% coverage of Uganda’s rural areas by 2020, with a minimum connectivity speed of 3Mbps. Internet penetration in all of Uganda, currently stands at 42.9%. The solution uses, a turnkey, solar powered package that provides everything needed to expand 3G services over a 2.5-kilometer radius, known as Mobile Reach Solar 3G
In October, Intelsat made a strategic investment in Africa Mobile Networks (AMN). AMN provides MNOs with a network-as-a-service (NaaS) solution, in which AMN will fund, build and operate the ultra-rural network for the operators. This enables, African mobile operators to extend their coverage with minimal opex and capex risk.
AMN’s solution is a solar powered, low-cost, small cell solution which can be deployed and installed in less than 6 hours. Once installed, the sites will connect over the Intelsat fleet to the core of the mobile network and deliver 2G services, with the ability to upgrade the base stations to 3G and 4G as data demands allow.
Yahsat, through its YahClick service, already offers broadband connectivity in parts of Africa, and following introduction into service of Al Yah 3, earlier this year, availability has expanded to cover an additional 8 countries in the continent. In September, it announced a partnership with Hughes to provide commercial Ka-band satellite broadband services across Africa, the Middle East and southwest Asia.
The venture will continue to provide unserved and underserved communities with high-speed Internet services operating over Al Yah 2 and Al Yah 3 Ka-band satellites, coupled with the capabilities of Hughes Jupiter™ System. Hughes will also supply the Operating and Business Support System (OSS/BSS) solutions for network operations and management.
Initially, the venture will focus on “direct-to-premise services” to homes and small- to medium-sized enterprises, and to community centers and schools that are served under local government programs across these regions. In parallel, there will be an increased focus on “community hotspot” solutions to make satellite-enabled broadband more accessible to many more users.
Sky and Space Global (SAS), headquartered in the UK and listed on the Australian stock exchange, is a startup company, taking a different approach, but also aiming to further improve connectivity rates in Africa. The company plans to launch an S-Band, low-earth orbit (LEO) nano-satellite constellation, to provide voice, data and instant messaging services. The system will extend the reach of existing networks with no additional build-out. This coupled with the size of the satellites, enables SAS to provide a low-cost service. The service will be available in equatorial regions, and Africa is a key target market.
The company launched three proof-of-concept satellites, known as “diamonds” in September, and succeeded in demonstrating the first nano-satellite telephone call, financial transaction and PSTN gateway. Launch of the full constellation, known as “pearls” will commence in 2019. Like all potential new operators, SAS is still raising capital for the venture, so whether it actually launches remains to be seen.
Humanitarian issues, have also been at the forefront of the news this year, and in May members of the satellite community including: Arabsat, Eutelsat, Global Eagle, Hispasat, Inmarsat, Intelsat, SES, Thuraya and Yahsat (this was pre-acquisition) signed contribution agreements with the United Nations World Food Program (WFP), on behalf of the Emergency Telecommunications Cluster (ETC). These agreements expand their commitment to support global disaster relief. The WFP is the global lead agency of the ETC. This was the final step in bringing into operation, the Crisis Connectivity Charter signed in late 2015, between the EMEA Satellite Operators Association (ESOA), the Global VSAT Forum (GVF), the UN Office for the Coordination of Humanitarian Aid (OCHA) and the ETC. Under the agreement the Charter signatories are committing satellite capacity and equipment for humanitarian uses during times of emergencies and natural disasters. The ETC will be able to activate the charter when disaster strikes and identify which pre-planned solutions are available to meet a 24 hour deployment timeline.
Moving to Europe, the UK has been very active in establishing objectives for a space industry. In March of 2018, The Space Industry Bill was given Royal Assent. This bill is aimed at further advancing the UK’s position in the space economy. Dr. Graham Turnock, Chief Executive of the UK Space Agency, stated: “Whilst it doesn’t have the pedigree of other space-faring nations, Britain now accounts for 40% of all small satellites currently in orbit.”
More recently, in support of the bill’s objectives a site in Sutherland, in the far north-east of Scotland, has been chosen as the site for the UK’s first spaceport.
Discussing the bill, Science Minister Sam Gyimah, stated: “With one in four of all telecoms satellites substantially built in Britain, and our businesses at the forefront of hypersonic flight technology, through its Industrial Strategy, the government is working with industry to increase its global share of the space sector from 6.5% to 10% by 2030.” Supporting the bill, Gyimah announced eight new projects, as part of the UK Space Agency’s “Space for Smarter Government” program. These will demonstrate the potential of using satellite technology to solve challenges faced by the public sector. These range from using satellite data and machine learning to support the rollout of charging stations for electric vehicles, to deploying drones and satellites in the battle against marine waste.
No article on Europe would be complete without mention of Brexit. As discussed in my article on this subject in 2016, the UK will remain a member of the European Space Agency (ESA), which is not an EU institution. The government has also stated that post-Brexit, it plans to remain in collaboration with the EU on all space projects. However, major issues remain to be resolved, when it comes to Galileo, the European satellite navigation system, to which Britain has already contributed 12% of the total cost, which is expected to exceed €10 billion (US$11.4 at current exchange rates), by the project’s completion in 2020. Galileo, is run by ESA, but the European Commission makes key decisions on the project.
At the heart of the issue, is Britain’s access to the Public Regulated Service (PRS). PRS is an encrypted signal, that cannot be jammed. It can be used by governments during national emergencies, and can also be used by the military to plan operations and guide missiles. Currently, non-EU members are excluded from building modules for the PRS and denied access to the signal. In 2016, Norway and US, asked to be allowed access to the PRS, but negotiations have been slow.
In October, The (British) Institute for Government, in an article about UK-EU defense and security cooperation after Brexit, stated that the EU has already said that UK contractors will not be able to participate in the military element of the Galileo satellite system.
The UK has made proposals to allow its continued participation the project as part of the wider security relationship, but has also indicated – and allocated £95 million to the project - that it will design a national alternative, if it cannot secure ongoing access to Galileo. The EU is reported to be considering offering the UK a special deal on access to the encrypted signal, but is still unwilling for UK companies to bid for contracts to build the system.
Resolution, or otherwise of this issue, could have wider implications for EU-UK post-Brexit cooperation on cross-border and domestic security. One of the many issues yet to be resolved!
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Elizabeth Tweedie is Associate Editor, Satellite Markets and Research. She has over 20 years experience at the cutting edge of new communications entertainment technologies. She is the founder and President of Definitive Direction (www.definitivedirection.com), a consultancy that focuses on researching and evaluating the long-term potential for new ventures, initiating their development, and identifying and developing appropriate alliances. During her 10 years at Hughes Electronics, she worked on every acquisition and new business that the company considered during her time there. She can be reached at etweedie@definitivedirection.com.
