The Qatar Satellite Co., Es’hailSat, announced its intentions to be a large, durable player in the crowded Mideast/North Africa satellite telecommunications market even before it launched its first satellite, Es’hail 1, last August.
Es’hail 1, co-owned by Paris-basedunder the name Eutelsat 25B, was the center of a long dispute with the Arabsat consortium and the Iranian government over frequency access rights at 25.5 and 26 degrees east.
Arabsat and Es’hailSat reached a strategic agreement that settled many of their differences and gave Es’hailSat 500 megahertz of spectrum at 26 degrees, one of Riyadh, Saudi Arabia-based Arabsat’s hot spots.
Armed with a long-term strategic partnership with Qatar’s Al-Jazeera broadcaster, Es’hailSat is on the verge of ordering an Es’hail 2 to use the frequencies resulting from the Arabsat agreement.
The 2022 FIFA World Cup soccer tournament, to be held in Qatar, is one reason Es’hailSat is wasting no time to secure a position in the region, where Nilesat of Egypt — with its own capacity-sharing deal with Eutelsat — and other operators are active.
Es’hailSat Chief Executive Ali Ahmed Al Kuwari says his company is one example of Qatar’s determination to diversify its economy beyond energy production. And he is not limiting his ambitions to the company’s home region.
Al Kuwari spoke with SpaceNews staff writer Peter B. de Selding.
Should we look at Es’hailSat as a company created for reasons of political independence in satellite communications, or for business purposes, or both?
Certainly Es’hailSat was created to provide strategic independence in satcoms for customers both here in Qatar and globally, but equally to contribute to Qatar’s 2030 Vision to transition from a hydrocarbon economy to a more balanced economy that is able to grow sustainably in the long term.
The industry is known for its scale economies, which favor larger fleet operators. Do you agree that it would be hard to survive with just one or two satellites?
It’s certainly more cost effective to run a large fleet of satellites rather than a small one, but that doesn’t mean you can’t survive with just one or two satellites. A smaller satellite operator that has been funded through the international equity and debt markets could indeed be an acquisition target for a larger satellite operator, but that’s not our position.
The state of Qatar is investing long-term in infrastructure projects, which include Es’hailSat, specifically to build up the country’s infrastructure to help transition from a hydrocarbon economy to a more balanced economy — not to build a company that they can sell at a profit after a few years. As such I’d suggest that Es’hailSat is much better placed than other satellite operators to continue indefinitely, even if we were only to have a small fleet of satellites.
What are your growth plans, specifically with Es’hail 2?
We aim to place the Es’hail 2 contract at the end of this June for a launch no later than the end of 2016. As well as procuring the satellite, the launch and the launch insurance, we will be building the satellite telemetry, tracking and control center at a dedicated site north of Doha. The satellite will be flown from there by our own Qatari staff, and the same facility will be used as a teleport to transmit television channels and other traffic to the satellite, again managed by our own Qatari staff.
This is a key part of our vision to provide a secure, independent satellite system to meet the needs of Qatari stakeholders and others in the future. In parallel we’ve already started the early preparatory work on Es’hail 3, talking to customers and other stakeholders to understand their requirements so that we can provide them with what they need. Realistically I expect to place an order for a third satellite no earlier than 2016.
Is it certain that you will be launching Es’hail 2 as your own satellite, or will it be a condosat type of arrangement with another operator?
Es’hail 2 will be a Qatari satellite owned and operated by Es’hailSat, not a condosat shared with another satellite operator.
Please describe your relationship with Al-Jazeera: Are they with you for the long term?
Like us Al-Jazeera is based in Qatar. We have a very close working relationship with them and have signed long-term contracts. Both parties expect this relationship to continue in the very long term.
Creating a direct-to-home market in your region will be tough with Arabsat and Nilesat and Eutelsat, among others, already with lots of dishes pointed at their satellites. What can you say about your strategy in breaking into this market?
It’s not so much about the number of satellite operators as the number of “hot spot” orbital locations, and there are two of those serving the Middle East and North Africa region — 7-8 degrees west, where Eutelsat and Nilesat have satellites, and 25.5-26 degrees east, where Es’hailSat, Arabsat and Eutelsat have satellites.
There are many millions of dishes pointed at both of the hot spot locations, so we’ve already broken into this market with Es’hail 1 at 25.5 degrees east.
Additionally, we’ve acquired two times 500 megahertz of Ku-band bandwidth at 26 degrees east in perpetuity for Es’hail 2 and the follow-on satellites, which will help us develop our presence significantly. With Es’hail 1 essentially sold out and high-definition versions of Al-Jazeera’s premium content already on the satellite, I’m comfortable that we’ve already broken into the market in a big way.
Beyond the Middle East, do you have a priority region where you think your offer would find a market?
Clearly there are some regions of the world such as North America and Europe where the supply is already very well developed, so we are less likely to go there. Asia is a market where the supply is still fragmented and ripe for consolidation, so that looks like a more interesting opportunity at the moment.
Please describe your Ka-band strategy.
Firstly let me tell you what our strategy is not. We are not targeting the direct-to-home consumer broadband market at Ka-band.
In the Middle East and North Africa region, Yahsat 1b and Arabsat 5C already address this on a primary basis, and there’s also a Gulf beam on Eutelsat’s Ka-Sat and a steerable beam over the Gulf on Hylas 2. Then there’s EMC’s payload on the forthcoming Badr 7 satellite.
So this is an overserved market. Instead we’re concentrating on other areas including fiber-like trunk links — north of the geographical region that will hopefully be served by O3b — on VSAT services, and on more specialized TV broadcasting.
What is the current status of frequency coordination at your slots, both in Ku-band and in Ka-band? Have the issues involving Arabsat, Eutelsat, the Iranian Zohreh and Es’hailSat been resolved to your satisfaction, or is there more work to be done?
For Es’hail 1 the frequency coordination was resolved on an operational basis last year, and we have an operational agreement in place that is being used to the full satisfaction of all parties.
As regards work to be done, Arabsat Chief Executive Khalid Ahmed Balkheyour described the situation well at a conference last year when he said that it had taken two years to reach an operational agreement but that he expected it to take two decades to sign a formal agreement. This really isn’t unusual. Many satellites never reach the point of concluding a formal coordination agreement. The important thing is to have the operational agreement in place so that all parties can proceed in the best interests of their customer. For Es’hail 2 the picture is completely different; there’s no dispute over the frequencies. Consequently frequency coordination really isn’t on my radar any more.
Follow Peter on Twitter: @pbdes