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Contradictions and Challenges in the Middle East 34_36_37.qxd 04/05/2007 12:01 Page 2 Middle East overview he Middle East is the one of the most vibrant satellite Tmarkets on the planet, with two strong rivals working hard to win television business, and two enthu- siastic newcomers perhaps looking to upset the status quo. But it is also a region in turmoil, at least for the long- standing pay-TV operators, which have had a tough time in building subscriber numbers - not surprising when there are hundreds of free-to-air channels available across the region. The two long-established satellite players, ArabSat and Nilesat, are having - it is fair to say - a wonderful time. Business is simply booming with capacity territory now, especially in C- very much a seller's market, which has led Band, and next year's launch of Badr- to good commercial rates for transponder 6 will have improved C-Band coverage capacity. Last year, February 2006, over Africa, and to cover as far East as ArabSat suffered the catastrophic total Pakistan, as well as covering about loss of ArabSat 4A, which dramatically 80% of the African continent.” slowed down expansion plans. But spirits Part of Arabsat's buoyancy is the are considerably cheerier now that it has knowledge that Arabsat 4A is being ArabSat 4B (now dubbed BADR 4) replaced on a fast-track build programme in position (launched last November), (and will be dubbed Badr-6), and to all bringing much-needed extra capacity to intents and purposes it is Arabsat 4A-R, its fleet. with a few minor tweaks to reflect market Contradictions and challenges in the Middle East The Middle East is a vibrant market for satellite operators, but it is also a region in turmoil, especially for pay-TV providers, argues Chris Forrester “For some years now, operators have changes. “Demand is as strong as ever, dumped capacity in this region at very and while the news as such is that low prices. However, prices are now broadcast remains strong, anything definitely changing their orientation,” related to pure telecoms is simply says a source close to ArabSat. booming,” our source says. “They are rising, and the loss of [SES The general plan is for ArabSat's New Skies] NSS-8 has pushed prices expansion to be within C-Band and higher. It is a fact of life. Nobody wants with some Ku-Band capacity. “By doing to lose a satellite, believe me we know this, we are counting on our own efforts, this. It is never a good thing, but the end concentrating on our own resources, result is that prices are skyrocketing but you can assume a few announcements on C-Band over Africa. Africa is a hot with other regional entities in teaming page thirty four www.cable-satellite.com Cable & Satellite International may-june 2007 34_36_37.qxd 04/05/2007 17:00 Page 4 Middle East overview Boeing is known to have submitted detailed proposals. The potential French contractor is understood to be a joint proposal up with us. A from EADS-Astrium and Alcatel. number of Waleed Al Mokarrab Al Muhairi, regional people COO at Mubadala, made the realise that announcement. It is expected that operating a Emirate's telco Etisalat will end up single satellite participating in the project. Mubadala isn't sensible, already owns a 20% stake in the or a long-term option. We have those Emirate's second telco, 'Du'. skills, and perhaps it is smarter YahSat says it will operate as a com- for these other operators to team up mercial company to develop, procure, with us because we do not pose a own and operate a hybrid communications threat. Perhaps we can reach a deal satellite. YahSa's business concept will between private operators,” according be focused on addressing the terrestrial to our source. broadband coverage and will offer One of those so-called private solutions for internet trunking via operators includes a scheme from satellite, corporate data networks, The United Arab Emirates to launch backhauling services to telecom a pair of satellites, the first to be operators, and broadcasting services. launched Q2 2009. The $1 billion Shawkat Ahmed, the CCO of Yahsat, scheme is backed by oil-rich Abu Dhabi. says the first satellite has an overall The satellites will fulfil two roles: capacity of 50 transponders and the part supplying ordinary commercial company has plans for a second satellite capacity for rental by the market, to be launched in 2010. The new and the other supplying military capacity will pose further competitive and governmental capacity over the threats to the region's existing players: Middle East, Africa and Central Asia. ArabSat, NileSat, Noorsat, SES New Skies The second craft is currently slated and Eutelsat. for launch in 2010. Abu Dhabi-backed Mubadala HD everywhere Development Co (a State-owned Part of the general buoyancy in the business) is financing the hybrid craft, market comes from high-definition called YahSat. Mubadala was established television. Indeed, the region's first in October 2002, and issued its 'Request full time HD channel is already on air. for Proposals' to the industry last October. Upmarket shopping channel Luxe. At one stage, it was expected that SES TV confirmed Mar 6 that it is already Global would take an active role in the airing its high-def version, free to air, project, as a means of extending its in MPEG-4 on Arabsat's BADR 4 coverage into the Middle East. satellite from 26 degrees East. At the time of writing, Mubadala says The channel is also available in SD it is in final discussions with two in MPEG-2 from the same satellite. possible satellite vendors, one US-based The recent Middle East Cable & Satellite and the other in France. show in Dubai was full of other HDTV market gossip, including how pay-TV ArabSat's expansion plan operator Orbit will have four HD channels Four new satellites are on the way, on air shortly, the first kicking off in April one for launch in 2008. Three are with Discovery's HD service. Movies/ under final 'Request for Proposals' Sport will follow, and then Orbit's own now. These satellites will help ArabSat expensively produced in-house channels expand South and East from its will also dual transmit in HD. current Mid-East slots, from 30.5 Arab Radio & Television, which degrees East, 26 degrees and experimented with HDTV on NileSat during 20 degrees East. the Germany FIFA football World Cup last page thirty six www.cable-satellite.com Cable & Satellite International may-june 2007 34_36_37.qxd 04/05/2007 12:03 Page 5 Middle East overview and Amman, started transmissions exactly we initially anticipated, even reaching Iran one year ago, as a 'virtual' satellite in the East. Even though it is 1 deg away operator. It operates three 'satellites' from Nilesat it is to all intents co-located near either Arabsat's 'hot' position or and many people in some locations can Nilesat's similarly 'hot' spot, serving the receive both satellites with the same dish.” Middle East. Noorsat 3, between encrypted and free The former deputy director general -to-air channels, carries about 60 of Arabsat, Omar Shoter, runs Noorsat. channels, and this was scheduled to Satellite dishes in Kuwait “As an operation, we started in March rise to about 70 in April, the backbone 2006; we are just one year old. Eighteen of which is Orbit's pay-TV platform for its year, is said to be launching no less than months ago, I predicted total revenues European audience. Orbit's main bouquet five HDTV channels on NileSat this year, would be in the region of $20m within operates from Noorsat 1. although with ART focusing on sport, some a year of start-up. At that time, we had “HD has been publicly announced by of these 'channels' could just be part-time. just five transponders, all of which had Orbit, and we will be the first satellite Showtime, the region's third pay-TV oper- been pre-sold. In July last year, we added operator to carry a pay-TV platform in HD ator, is known to be readying for HDTV and another four transponders and in March over the Middle East. They will start with its service is expected to be launched 2007 we added the final four transpo- one channel, and quickly grow,” says Shoter. along with its English premiership nders under this contract. The EuroBird Noorsat is also looking forward coverage, which kicks off this autumn. 2 satellite, which we fly as Noorsat 1 confidently: “By our second birthday, Most other mainstream broadcasters is now all ours, with 13 transponders. one year from now, I hope we will have are known to be taking a cautious We predicted $20m in revenues and filled all of our contracted capacity and approach to HDTV. Plenty are investing we are beyond that.” serving Arab media. We especially want in HD original production, especially where Shoter says of the first batch of nine to cater for the smaller broadcaster, there's archival value in the footage transponders that Noorsat 1 was able who perhaps do not have the high captured. But how soon these efforts to market, eight are sold. “The new budgets needed for mainstream activity.” migrate to fully-fledged HD services is still capacity, which only came to us on March Shoter says his virtual satellite operation anyone's guess. 5, some 60% of it is pre-sold. We have is not so strange. “Think of the many, many satellite operators over the years who have “The retail shops are full of flat-panel leased capacity at one time or another.
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