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

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

“We will expand our reach to more markets and business segments, expanding our revenue streams from our commercial business,” said Suleiman Al Ali, Chief Commercial Officer of Yahsat. The national.

Mr Ali is also the CEO of Thuraya, the mobile satellite telecommunications division of Yahsat, which the company acquired from Etisalat in 2018.

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

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

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

Suleiman Al Ali, Chief Commercial Officer of Yahsat

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

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

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

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

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

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

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

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

While much of the group’s contracted revenue for the next few years will come from government projects, Mr Ali said, the commercial business’s contribution to total revenue 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 serving 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 major IoT players. This is a major growth area for our trading business,” said Mr Ali.

One of the major projects Yahsat is working on is the Thuraya 4 Next Generation Satellite (T4-NGS), 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 service agreement with the UAE government and next-generation mobility solution 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 revenue from its global data services to increase 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 portfolio of products that will serve segments such as aviation, marine and ground applications with much greater connectivity,” Mr Ali said.

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

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

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

Mr Ali expects the two new satellites to significantly enhance Yashat’s service offering 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.”

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

Founded in 2007, the satellite operator offers multipurpose satellite services in more than 150 countries in Europe, the Middle East, Africa, South America, Asia and Australia. It has a current fleet of five satellites that extend its reach to more than 80 percent of the world’s population.

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

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

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

“The launch of new space programs and the support it receives from the government will create a very competitive business model that has a high involvement of UAE nationals, creating a local workforce in this segment,” Mr Ali said.

Updated: August 21, 2022, 5:19 am

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