Yahsat targets strong revenue growth from its commercial data and satellite phone business

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

“We will expand our reach into more markets and business segments by expanding our revenue streams from our trading business,” said Sulaiman Al Ali, Yahsat’s chief commercial officer. national team.

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, its data solutions business, and Thuraya, its mobile telephony business.

Yahsat raised its forecast revenue for 2022 by 1.3 percent at the end of the first half of 2022 to at least Dh1.54 billion ($419 million) from previous guidance of $1.52 billion, keeping the upper end of unchanged at Dh1.62 billion.

The company’s revenue in the first half of 2022 stood at Dh755m, up more than 8 per cent from the same period a year ago with net profit attributable to shareholders for the six-month period at Dh167m, up more than 50 per cent percent more than the same period in 2021.

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

By combining the roles of Yahsat’s Chief Commercial Officer and Thuraya’s Chief Executive Officer, the company expects to create a cohesive strategy to reach new geographies and market segments.

“In the new role as CCO, I have access to all the solutions and products of the group and the markets where both companies are working. In terms of geography, there are many common areas that offer synergies in market access strategies,” said Mr. Ali.

Thuraya currently covers 150 countries, while YahClick has a presence in more than 60.

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

“This gives us the ability to package many solutions together,” he said.

“We have a solid position in the market due to our technical capabilities and strong financial support from Mubadala and other investors.”

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

The company already has a significant presence in mobile data covering small and medium enterprises and business operations in remote areas where there is no access to data. In addition, it is focused on a growing marine business supplying fishing vessels and offshore oil and gas installations, agricultural research, weather forecasting and a fast-growing Internet of Things business, which the company expects to be a key driver of its commercial mobility. business.

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

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

The satellite aims to support 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 data, maritime and IoT segments.

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

“The new satellite will enable the commercial business to offer a new portfolio of products that will cater to segments such as aerospace, marine and terrestrial applications with much greater connectivity,” Mr Ali said.

While the project is on schedule, overall, more than 80 percent of Yahsat’s projected Dh698 million in capital expenditures and investments in 2022 is related to the T4-NGS program.

The capacity associated with the T4-NGS program is financed almost entirely through a combination of debt through export credit agreements and significant upfront payments that the company received from the UAE government.

Last year, Yahsat was also appointed by the UAE government to conduct a detailed evaluation and recommendation for two new satellites, Al Yah 4 and Al Yah 5, targeted for launch in 2026.

Mr. Ali expects that the two new satellites will greatly 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 will “further increase our revenue from both government contracts and commercial business.”

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

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

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

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

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

The UAE’s space business ecosystem has come a long way over the past decade with a significant presence in the global commercial satellite data and telecommunications business.

“The launch of new space programs and the support it is receiving from the government will create a very competitive business model that has great participation from the citizens of the United Arab Emirates, creating a local workforce in this segment,” said Mr. Ali.

Updated: August 21, 2022, 05:19