Yahsat targets strong revenue growth from commercial data and satellite telephony businesses

Al Yah Satellite Communications – better known as Yahsat – is optimistic about strong revenue growth from its commercial satellite data and telecommunications business as the Abu Dhabi-based company prepares to launch its next satellite in 2023 and expand into new markets.

“We will expand our reach to more markets and business segments by expanding our revenue streams from our business activities,” said Sulaiman Al Ali, Commercial Director of Yahsat. The National.

Mr Ali is also the chief executive of Thuraya, the mobile satellite telecommunications arm of Yahsat, which it acquired from Etisalat in 2018.

In his new role as CCO, he will lead Yahsat’s commercial business which includes YahClick, the data solutions business and Thuraya, its mobile phone business.

Yahsat raised its forecast revenue for 2022 by 1.3% at the end of the first half of 2022 to at least MAD 1.54 billion ($419 million) from the previous forecast of MAD 1.52 billion. Dh, keeping the upper limit unchanged at 1.62 billion Dh.

We have a strong market position thanks to our technical capabilities and strong financial backing from Mubadala and other investors

Sulaiman Al Ali, Commercial Director of Yahsat

The company’s revenue in the first half of 2022 amounted to MAD 755 million, up more than 8% compared to the same period a year ago, with net profit attributable to shareholders for the six-month period of MAD 167 million, up more than 50% compared to the same period in 2021.

“To increase the revenue share of our commercial data and mobile telecommunications businesses, we will soon offer bundled packages to our customers at globally competitive prices,” Ali said.

By combining the roles of commercial director of Yahsat and general manager of Thuraya, the company plans to design a coherent strategy to reach new geographies and market segments.

“In the new role of CCO, I have access to all the solutions and products of the group and to the markets in which the two companies work. In geographical terms, there are many common areas, providing synergies in market access strategies,” Mr. Ali said.

Thuraya, currently covers 150 countries, while YahClick is present in more than 60.

In the Middle East and Africa, both companies have a strong presence and share a number of business partners and distributors.

“It gives us the opportunity to bundle many solutions together,” he said.

“We have a strong market position thanks to our technical capabilities and strong financial backing from Mubadala and other investors.”

While a large portion of the group’s contract revenue for the next few years will come from government projects, Ali said, the contribution of commercial activities in the overall revenue pool is expected to increase as the business expands.

The company already has a significant presence in mobile data covering small and medium businesses and business operations in remote areas where there is no access to data. Additionally, it is focused on a growing maritime business for fishing vessels and offshore oil and gas facilities, agricultural research, weather forecasting and a fast-growing Internet of Things business, which the company says will will be a key driver of its commercial mobility. Company.

“We have a strategic plan to position Yahsat as one of the leading players in IoT. This is a major growth area for our business activities,” Mr. Ali said.

One of the main projects Yahsat is working on is the Thuraya 4 Next Generation (T4-NGS) satellite, which is scheduled to launch next year and begin commercial services in the second half of 2024.

The satellite aims to support both the long-term managed capacity services agreement with the UAE government and the next generation of mobility solutions services with a focus on the mobile, maritime and data segments. IoT.

The company, which is among the world’s top 10 satellite operators by revenue, expects revenue from its global data services to grow significantly as it launches data services using its T4-NGS with advanced 4G and 5G capabilities.

“The new satellite will enable the commercial business to offer a new product portfolio that will cater to segments such as aeronautical, maritime and land applications with much greater connectivity,” Ali said.

Although the project is on schedule, overall, more than 80% of Yahsat’s planned MAD 698 million of capital and investment expenditure in 2022 is related to the T4-NGS program.

Investments related to the T4-NGS program are almost entirely funded by a combination of debt through export credit agreements and large upfront payments the company received from the UAE government.

Last year, Yahsat was also appointed by the UAE government to conduct detailed assessment and recommendations for two new satellites, Al Yah 4 and Al Yah 5, slated for launch in 2026.

Ali expects the two new satellites to significantly enhance Yashat’s service offerings with additional capacity, coverage and capabilities to enable next-generation applications. They will also present a “significant growth opportunity” for Yahsat and “further increase our revenue from both government contracts and commercial activities”.

“The new satellites will significantly expand the capabilities of our existing Al Yah 1 and Al Yah 2 satellites with new technologies.”

The company is currently evaluating the cost of this project and how it will be financed. With a very low leverage balance sheet, the company said last month that it had enough headroom to raise debt to fund the program.

Founded in 2007, the satellite operator offers multi-mission satellite services in more than 150 countries across Europe, the Middle East, Africa, South America, Asia and Australasia. It has a current fleet of five satellites that extends its reach to over 80% of the world’s population.

Mr. Ali, a veteran of the UAE satellite telecommunications industry and associated with Yahsat for nearly a decade, is convinced of the global competitiveness of Yahsat’s business model.

“While reliable and innovative solutions are what we offer our customers, in all markets we are mindful of affordability and as such we tailor our products and services to suit each market segment.

The UAE’s commercial space ecosystem has surged forward over the past decade with a significant presence in the global commercial satellite telecommunications and data sector.

“The launch of new space programs and the support it receives from the government will create a very competitive business model with significant participation from UAE citizens, creating local workforce in this segment,” said Mr Ali.

Updated: August 21, 2022, 05:19