Thuraya recently set up a regional office in Singapore - citing that it expects the Asian mobile satellite business to grow by 14% annually, compared to the global average of 11%. What are the key factors leading to the high growth rates expected in Asia?
HALAWI: The high growth rates expected in Asia are mainly attributed to a booming maritime sector. Asia is a predominantly maritime market for satellite companies. There are an increasing number of vessels that value the usage of mobile satellite services on board. Thatâ€™s contributing to an important growth in the market. For us, this is the main reason why weâ€™re establishing a presence in Singapore. We have two maritime products that are very well suited for Asia. One of them is out in the market already and the other one will be out within a couple of months. Those products are very well suited to serve the Asian market from a maritime perspective; to offer voice and data connectivity to ships, whether it is for large ships that use it for merchant shipping and e-commerce type applications and for connectivity to the office or for ships that use it more for voice and crew calling type applications for the crew to stay in touch with their families.
How are you working to expand your customer base?
HALAWI: First of all, weâ€™re looking at being closer to the customers in Asia and weâ€™re looking to fill our gaps in the distribution in Asia, which weâ€™re doing right now as we speak. Weâ€™re also working with large customers, such as the US Government.Â We'veÂ just hired a Vice President of Government Services, based in Washington, DC, close to the customer. Weâ€™re also working with our partners to ensure that we have a proper distribution model that works for them. We have a new range of products that are quite interesting for them to sell to their own customers. We have really appealing products with a very strong and robust network that doesnâ€™t suffer from congestion like other networks do. So that allows our partners to ensure that they can continue to provide a quality service to their customers. You know, with mobile satellite services, you cannot compromise on quality because they are used for mission critical applications. So we ensure that our partners are able to work with us, are comfortable, and can offer a quality but value product to their customers.
What is your relationship with key vertical markets? Which verticals are heavy users of mobile satellite services?
HALAWI: Mobile satellite services rely heavily on vertical markets. It is not a luxury product; itâ€™s a product that you use because you have to use it. The vertical markets are very important for us as much as weâ€™re very important for them. We provide them with solutions in areas that are remote and rural, or whenever they need mobility, or whenever their people are at sea. The value of mobile satellite services is unparalleled because if you are in the middle of an oil expedition or aboard an oil rig and something goes down and you have to stop production, thatâ€™s a lot of lost revenue. Mobile satellite services give you a way to connect and fix whatever problem you have in the middle of nowhere. Weâ€™re very entrenched with a number of vertical markets, whether itâ€™s oil and gas or the media. Broadcasters use our services to broadcast from the field. Whenever they donâ€™t want to rely on the big OB van and the big truck to broadcast, they can just use an A5 sized device and broadcast at high quality, so it is ideal for them. Another vertical is NGOs, who many times find themselves in areas that are not served well or not served at all by terrestrial infrastructure. Each different sector uses the services for different applications but we are quite involved with all of them right now.
How has the market reacted to Thuraya IP? How much growth potential do you see for satellite internet service?
HALAWI: The market is actually adopting Thuraya IP very strongly right now. We have seen a lot of growth in the last couple of months and it is mainly attributed to the fact that Thuraya IP is the smallest device that can offer the capabilities that it offers. Itâ€™s a really good device and itâ€™s very useful for the media sector, which is, right now, quite engaged and busy. Itâ€™s a device that works on a network thatÂ doesn'tÂ suffer from congestion. This is very important because people who use IP use it for mission critical applications. When you are stuck because a network cannot support you, or there are too many users, you have a problem. Due to the congestion-free characteristics of the device and the network, we are able to cater to those users who need it the most; whenever they need it, not just when there is no congestion. So the adoption for it has been great. The structure of the pricing packages is quite creative and caters to the requirements of every single vertical out there and suits them well so that they donâ€™t overpay for a solution and they get a valuable service.
The growth rate for mobile satellite services is around 11% annually for the total market but if you take the data segment by itself thatâ€™s around 25%. The highest growth is coming from the data markets, not from voice. There is quite a bit of opportunity. People now rely on data more and more. Even when they are in areas that are remote, they expect the same type of services as when they are in urban areas. This is where we come in. This is why the IP is very important for us, because it fills a very important gap that exists in the market today.
Do you foresee the satellite communications market following in the steps of the mobile market in the increasing importance of data over voice services?
HALAWI: The data market is very important. There are a lot of applications that are shifting from voice-centric to data-centric. Even the voice calls themselves are becoming more based on voice-over-IP and solutions that are based on data. So there is really important growth in the data market. The satellite services that we offer are quite comparable with the terrestrial networks. They are a spacial version of the terrestrial networks. Particularly for our network, we have something that is quite unique for us, the fact that we have roaming with terrestrial networks. We have roaming with about 300 operators out there so our SIM cards can be used in GSM terminals and vice versa. That opens up capabilities for a lot of people, who donâ€™t want to carry 2 SIM cards or 2 different phones, to have voice or data wherever they are with any SIM card they have and to be charged on one bill instead of multiple bills. Itâ€™s a unique advantage.
The growth rate for mobile satellite services is around 11% annually for the total market but if you take the data segment by itself thatâ€™s around 25%. The highest growth is coming from the data markets, not from voice. There is quite a bit of opportunity.
As terrestrial operators expand their network capabilities, are these operators posing an increasing competitive threat to satellite service operators? Will we eventually see convergence between the two?
HALAWI: The reason the satellite industry is not growing as much as the terrestrial industry is because the terrestrial industry is growing quite a bit. Thereâ€™s been a GSM explosion, especially on the voice side. That being said, in order to roll out the EDGE and 3G networks, and now the 4G, GSM is going to be more and more limited to urban areas where the economics makes sense, because you need a population density in order to roll out these networks and monetize them properly. That works for us, not against us. People get used to certain types of services and speeds in the urban areas and they want them replicated in the remote areas and they wonâ€™t have them there, so this is where we come in and provide our services.
Yes, there is a convergence happening. A lot of our technology is comparable and is based on terrestrial technology that has been adapted for space. Additionally, there has been a lot of convergence lately between fixed satellite and mobile satellite. So the whole telecommunications industry is converging and becoming more of a managed solution to the end-customer. The end customerÂ doesn'tÂ really care what the technology behind an application is, they want an application that works, whether it is satellite-based or not. There are hybrid systems now and youâ€™ve seen some of that in US. In Europe, they are also getting ready for hybrid systems. So there is more convergence between fixed satellite and mobile satellite and the line is becoming blurry between the two elements.