Thuraya Telecommunications Co. of Abu Dhabi, United Arab Emirates, established during the 1990s to provide satellite-based mobile phone services in the Middle East, North Africa and nearby regions, has seen its sales decline in recent years, largely due to the rapid expansion of GSM in its target markets.
Enter Samer Halawi, who was brought aboard in February with a mandate to reverse that trend. The longtime telecommunications executive’s strategy is to focus on what he sees as the high-growth mobile satellite markets: maritime and data services, along with the U.S. government and Asia.
Thuraya has two large L-band satellites on orbit built by Boeing, one serving its original market and the other covering Asia. The company’s first satellite, launched in late 2000, had a solar array defect that affected several Boeing-built satellites and was taken out of service in 2006.
Halawi spoke recently with Space News Editor Warren Ferster and staff writer Peter B. de Selding.
Are you having much success so far expanding Thuraya’s U.S. government business?
We are working today with the U.S. government in some areas, but there’s a lot of capability that we have that is quite interesting to the government. Number one is that we have digital signal processors onboard our satellites so we can dynamically allocate capacity where needed. That ensures that we don’t suffer from congestion problems, especially in areas of high demand. That was a big problem for operators before. For example, the U.S. government uses a lot of satellite capacity over Afghanistan and this is not a place where you want to be suffering from congestion and we are able to avoid that. The second one is that, especially with our data services, we offer asymmetric streaming. Asymmetric streaming means you don’t have to transmit on the uplink and downlink at the same rate. And when you do that the cost of your transmission can go down dramatically.
On the voice side we have what we believe to be the best satellite phone on the market in terms of ruggedness, size, functionality and capability.
That’s the XT?
Yes. It’s a phone that’s quite rugged — it’s splash proof, dust proof, waterproof. At the same time it’s very small. But most important is the way you can use it. You can walk and talk with it, whereas other satellite phones do not offer that kind of capability. The walk and talk is a very important feature and also we have anti-glare features because you use it outdoors so you have to be able to read the screen. Today the XT is satellite only but we will offer a dual mode by the end of the year or early next year. The dual-mode phone will have the capability of roaming on GSM back and forth and we have over 250 roaming agreements today. So if you have a GSM SIM card you can use it in our phones and you can use our SIM cards in GSM phones on GSM networks. It goes both ways.
Inmarsat has introduced a handheld phone to better compete with companies like Thuraya and Iridium. Has this cut into your business?
Not really. I think the only impact that has affected the voice market is the expansion in GSM. Thuraya has leadership in terms of voice globally; we hold more than 60 percent of the global voice market.
Has the U.S. government purchased many Thuraya telephones?
The U.S. government and a lot of its different logistical operations use Thuraya phones in the field. On the leasing side, the way it works is we provide them with capacity and they use that capacity on their own devices whether they are data or voice devices.
What’s your overall approach to the leasing market?
We have four different leasing products that provide a lot of flexibility for users to pick and choose what they want and we already have a lease in place with the U.S. government for certain purposes. We’re looking to add on top of this. We don’t have any particular discussions under way on the size of the lease, whether it’s the full satellite or not, but we have the capability of allocating a lot of capacity for leases.
What impact have the Arab Spring protests had on business?
It has had considerable impact on our business — a positive impact on everybody’s business in the satellite world. We see the uplift from any event as a bonus rather than what we depend on. There’s a very strong demand for mobile satellite services outside of events and that comes quite a bit from the vertical markets out there and this is where we’re focusing as a company.
Your newest satellite is focused primarily on the Asian market. How is that going?
We launched the satellite about two years ago over Asia where we have not exploited as much as we should. Asia is a maritime region and traditionally we didn’t have any good maritime products. But now we have a great product on the market for voice and probably by the end of the year we’ll launch a broadband product as well. With those products we’ll be able to exploit more of the Asian market. Having said this, it’s also a market that’s heavily regulated in terms of key countries like China and Australia. In Australia now we have alliances with two service providers and in China we’re making some inroads in terms of licensing and being in the market. So we’re getting there in Asia.
Fixed satellite services operators are going after the maritime market using very small aperture terminal (VSAT) services. How are you competing in this area?
There’s two parts of this: the narrowband, mainly for voice; and the broadband. On the narrowband we have a product now from a company called Addvalue Technologies in Singapore and it’s getting a lot of traction. This is with the medium to small boats that use it for the fisheries. In terms of the broadband market where VSAT is a fierce competitor we don’t have a product yet but we will have one by the end of the year. Because of the capacity that we have on our satellites and the flexibility we have on our network and how we can allocate capacity dynamically we can do some very interesting pricing that is very VSAT-like. Because VSAT has so much capacity they offer a lot of unlimited-type packages with fixed fees; we’re offering it on our IP platform and we will be offering it on the maritime. That would be a compelling story for large vessels who want that kind of connectivity and to not have any gaps in coverage that VSAT has.
Like several other operators, Thuraya has had to contend recently with intentional jamming. How are you dealing with this?
We have actually dealt with this quite fiercely in terms of combating and isolating the interference. It has been a recurring problem but the difference between us and the other guys is that we have made that very transparent to all of our customers. The reason I need to do that is our customers use it for mission-critical applications and they need to know what’s going on. I think that was very well appreciated by our customers and the take up that we have received after the interference was stopped has been phenomenal.
How was it resolved?
The technical solution was to limit the effect of the jamming. But the jamming did stop within two weeks; we made it clear that we don’t accept any unlawful interference and we would take any legal action that we needed to take to combat that, and the jamming did stop.
Have you considered nulling antennas for future satellites?
They don’t usually come cheap. It’s something we may consider but we’re not there yet.
At what point do you have to start thinking about design work on the next-generation satellites?
Probably next year we’ll have to start looking into that. Our satellites, the earliest one would go somewhere around maybe 2017, 2018. And the next one is maybe four or five years later. So we’re okay for a while.
Would you want to do something different with the next satellites, such as include a Ka-band payload?
Things are changing in the world. It could be a multiband system; it could be regional; it could be global. It’s likely not to be just pure one band. There have been quite a bit of hosted payload opportunities recently so those are things that we’ll be looking at as well.
How do you envision your shareholding arrangements evolving in the next couple years?
There are over-the-counter transactions that take place and there are more U.S.-based investors coming in and purchasing shares of Thuraya. We have Boeing of course as a shareholder but the main shareholders are interested in the business and the continuity of the business and there’s further interest growing from different areas as well.
