For Middle East and Africa, Satellite Capacity Shortage Continues

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WASHINGTON — Satellite capacity, particularly in C-band, is likely to remain rare and high-priced over the Middle East and Africa in the near future even if new satellites arrive in the region because C-band use is nearing its physical capacity limit, satellite operators and resellers active in the region said.

But in presentations here March 17 to the Satellite 2010 conference, they said new Ku-band and the promise of Ka-band satellite systems for certain uses should offer at least partial relief to a region where prices have reached unheard-of levels in recent years.

“It depends on the application,” said Khalid Balkheyour, chief executive of the Arabsat organization of Riyadh, Saudi Arabia, the region’s biggest fleet operator. “There has been a scarcity of capacity in some regions of Africa, and we see demand continuing to grow there. The good news is that more capacity is coming.”

Arabsat is in the middle of a substantial expansion and plans to launch two more satellites in the next year. Its next satellite, Arabsat 5A, will be stationed at 30.5 degrees east and will serve the entire African continent, Balkheyour said. It is scheduled for launch in late April.

Balkheyour said Arabsat is not going to leave startup operator Yahsat of the United Arab Emirates alone in developing the Ka-band market in the Middle East. Ka-band capacity will be on board an Arabsat spacecraft to be launched in late 2011, he said, and will cover the Arab peninsula, Iraq, Syria, Lebanon and, through a spot beam, Afghanistan.

Ramesh Ramaswamy, vice president for international marketing at satellite ground hardware provider Hughes Network Systems of Germantown, Md., said the capacity shortage in some areas is such that “even getting access to just six or eight megahertz is a problem. For broadband applications, capacity constraints seem to be easing. But for regional or global capacity it is still a problem.”

In a region in which capacity remains tight, the decision by Emerging Markets Communications (EMC) of Miami to purchase some $200 million in C-band capacity in 2008 now appears to be paying off, even if some observers questioned at the time the price the company was paying to Arabsat.

“We saw what was going to happen,” said EMC President Abel Avellan. “We grew our revenue by 40 percent in 2009, and I can tell you that all the capacity we purchased is already getting used. Our customers are waiting for the next Arabsat satellite to launch. We reserved with Arabsat two years ago, when the satellites were still at the decision stage. We are glad we did, and our customers are relying on us. For us, Africa is a long-term investment, independent of the current environment for satellite capacity.

“C-band will continue to be difficult to find, particularly since the C-band arc is nearly full, so I don’t see any changes on the supply side.”

Only Nilesat of Egypt, which has struck a strategic partnership with Eutelsat of Paris to add needed capacity to Nilesat’s audience, appears not to be struggling with a lack of capacity in orbit. “We don’t have a problem of capacity,” said Salah Hamza, Nilesat’s chief technology officer. “But coordination [with other satellite operators] to find a new orbital slot is difficult.”

Serge Van Herck, chief executive of Newtec of Belgium, which provides satellite broadband ground terminals, said new technologies, including Newtec’s FlexACM product, are enabling service providers to make better use of the available frequency, increasing throughput and reducing the margins operators need to build in because of rain fade.

Newtec is better known as a provider of Ku-band ground gear in Europe as part of the Astra2Connect consumer-broadband service. But Van Herck said Ka-band is the future for broadband, both in Europe and in the Middle East. “We are convinced that Ka-band is the way to go,” Van Herck said. “We see the price of [Ka-band] terminals going down in the next few years.”

After hesitating for several years, the Turkish government-owned Turksat satellite operator appears close to contracting for two new Turksat-4 satellites carrying C- and Ku-band capacity. Nihat Oktay, chief marketing officer at Turksat, said the two new spacecraft will launch by 2013.

Oktay said Turksat is also looking at Ka-band for consumer-broadband applications in Turkey, where universal-service projects sponsored by the government have extended connectivity to rural areas. “We recently completed a project to put 5,000 satellite terminals in schools,” Oktay said. “After our next two satellites are launched, we will decide whether to have a dedicated [Ka-band] satellite.”