Thuraya Ringing Up Higher Sales after Four-year Slide

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WASHINGTON — Mobile satellite services provider Thuraya Telecommunications Co. has reversed a four-year slide in revenue and posted an 83 percent increase in sales of its dual-mode telephone handset in 2012, Thuraya Chief Executive Samer Halawi said.

Halawi said total revenue growth in 2012 was about 4 percent, with recurring revenue — meaning revenue not resulting from specific events like the Arab Spring uprisings — growing by 9 percent from 2011.

There were no one-time events in 2012 that spiked sales, with the Syrian uprising providing no material boost in usage, he said. Natural disasters, political turmoil and military engagements in recent years have been important revenue events for mobile satellite service operators.

For Dubai, United Arab Emirates-based Thuraya, the 2012 performance “represents a tremendous turnaround, especially with our land-mobile numbers and our equipment sales,” Halawi said in an interview. “We are very pleased with our performance in 2012.”

Thuraya operates three large mobile communications satellites in geostationary orbit covering an area comprising some 140 nations in the Middle East, Africa, Asia and Australia.

The company competes directly with Inmarsat of London, which also operates satellites in geostationary orbit; and with two constellations of low-orbiting mobile communications satellites operated by U.S.-based Iridium and Globalstar.

Inmarsat is moving to higher-speed applications with a new Ka-band network to be added to its L-band system. Globalstar has just launched 24 second-generation satellites, and Iridium is investing $3 billion in a second-generation constellation that it will field starting in 2015.

Thuraya is a private joint stock company in the United Arab Emirates and does not disclose its financial results. But the company has focused on land-mobile applications with its dual-use satellite/GSM phone. The latest version, the XT-Dual, was released in 2011.

Thuraya on March 20 announced the availability of SatSleeve, which fits around an iPhone 4 or iPhone 4S handset, providing the satellite link. The SatSleeve also includes a battery to extend the iPhone’s battery life. An iPhone 5 version is expected to be released later this year.

The company’s initial 5,000-unit order of SatSleeves was sold out in two days, Halawi said. The units carry a suggested retail price of $499.

Thuraya also announced that it had struck a roaming agreement with cellular network operator AT&T to extend the reach of the Thuraya phones to the United States when in cellular-only mode. Thuraya recently completed an agreement with Softbank Mobile of Japan to provide satellite connectivity to Softbank customers travelling outside terrestrial-cellular coverage.

Halawi said the company has doubled its Asia-based revenue in the past two years.

Thuraya has long focused on land-mobile instead of maritime markets. Halawi said the company will be paying more attention to its maritime business — a market that is growing for satellite applications — but that land-mobile for government and corporate networks will remain the prime focus.

“There is a market for L-band connectivity in the maritime market, and there are coverage limits to Ku-band systems,” Halawi said. “We want to be realistic in our expectations. We are committed to L-band and you will see something from us [in maritime applications] this autumn.”

Thuraya has positioned its handset and airtime prices in between Iridium at the high end and Inmarsat at the low end. Globalstar’s voice service is just now returning to wide availability after five years of declines as the company awaited its second-generation satellites.

Globalstar has said it will be particularly aggressive in pricing as it seeks to regain land-mobile market share.

Halawi said March 20 that Thuraya is unlikely to replace its current L-band satellites on a one-for-one basis, and is not making it a priority to position a spacecraft over the Americas to offer global satellite coverage.

The Thuraya 1 satellite, launched in 2000, will be taken out of service sometime between 2018 and 2020, meaning the company has about two years before it must decide on a replacement strategy.

Halawi said Thuraya would focus on striking partnerships with others. Boeing Space and Intelligence Systems of El Segundo, Calif., which built the Thuraya satellites, remains a shareholder in the company and is also a distributor of its L-band service to U.S. government users. Boeing recently became a distributor of Inmarsat’s current L-band and future Ka-band service.

 

Warren Ferster contributed to this story.