Yahsat signs internet and TV deals

The company's first satellite will be sent into orbit next year, in order to provide broadband internet and television services throughout the Middle East and Africa.

Yahsat, the satellite subsidiary of the Abu Dhabi Government-owned Mubadala Development, has signed deals to provide broadband internet and television services throughout the Middle East and Africa by the end of next year. Up to 10 deals will complement existing terrestrial offerings from telecommunications operators in those regions once the company's first satellite, Yahasat 1A, is in orbit early next year, said Jassem al Zaabi, the chief executive of Yahsat.

The company will be able to provide high-speed internet, television and telephone services across satellite connections by next year. Yahsat 1A will be able to reach about 26 countries ranging from Kazakhstan to South Africa. "We are going to announce the list of our existing service providers at [the] Cabsat [exhibition]," Mr al Zaabi said. "At that time, it will be about 10 service providers and at the end of the year, it will be many more."

Cabsat Mena, which starts tomorrow in Dubai, is the third-largest digital media event in the world and the region's most important showcase for the industry. Mr al Zaabi declined to comment on how much each deal was worth or when Yahsat would become profitable but said it would offer broadband packages at US$40 (Dh146.92) per month, depending on the data speeds the satellite could relay back to earth.

Yesterday, the Telecommunications Regulatory Authority (TRA) said it had awarded a 10-year licence, worth Dh100,000, to Yahsat to operate satellite communications in the UAE. "This is a niche market so we made sure that the barrier to launch such services is as low as possible," said Mohammed al Ghanim, the director general of the TRA. Meanwhile, construction of the Yahsat 1A is back on track with the completion of a main component despite a damaging earthquake at the production facility in L'Aquila, Italy, last year, said the project contractors.

The communications component of the satellite was completed last week and will be sent to EADS, a French aerospace firm, to be integrated into the body of the satellite, said Olivier Badard, the president for the Middle East at Thales, a French aerospace and defence electronics company that built the component. The satellite was originally supposed to launch early this year, but the earthquake damaged a manufacturing plant belonging to Thales and Aleania, an Italian aerospace firm. The components themselves were not damaged, and work was immediately diverted to a plant in Rome and other European cities, Mr Badard said.

"Our facility was damaged and a recovery programme was put in place," he said. "This marks an important milestone, but our part is far from over." Mr Badard said it was likely to take between six and nine months to integrate the component into the body of the satellite. EADS and Thales won a $1.66 billion contract in 2007 to jointly build two satellites for Yahsat and deliver them over the next two years. The second Yahsat satellite is expected to be launched in the second half of next year.

In 2008, Yahsat signed a $1.185bn "club deal" between 15 banks that was split between a $1bn term loan, a $100m standby term loan and an $85m tranche. Mr al Zaabi said the company was not looking for any further financing. Once fully operational, Yahsat will offer four different services for government and commercial customers. The company will offer YahSecure, a service intended to provide confidential and reliable satellite connections for military and top-level government use.

Other commercial offerings will include YahLive, a direct-to-home television service, YahClick, a broadband internet service, and YahLink, a data communication service. Each will operate on the Ka-band frequency. Mr al Zaabi said Yahsat's commercial offerings would be "completely different" from what was offered by Thuraya, a satellite company in which Etisalat owns a majority stake, and would not roll out any satellite-based mobile phone services.