UAE’s $5 billion commitment opens doors for Yahsat 

UAE’s $5 billion commitment opens doors for Yahsat 

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TAMPA, Fla. — Yahsat is considering expanding into new satellite markets after the UAE government made a $5.1 billion pledge to buy broadband services from the Emirati fleet operator until at least 2043.

The company announced a 17-year capacity deal with the government Sept. 22 to replace contracts due to expire in 2026, and fund two geostationary satellites from Airbus slated to launch in 2027 and 2028.

Their agreement includes a $1 billion advance payment in 2024, roughly the same amount the operator plans to spend in total on the Al Yah 4 and Al Yah 5 satellites over the next five years.

Yahsat now has $7 billion of contracted revenues in the pipeline following the UAE government’s long-term commitment, CEO Ali Al Hashemi said in a news release announcing the capacity deal, enabling the company to provide “broader, more diverse and cutting-edge solutions portfolio to both the government and our customers.”

Musabbeh Al Kaabi, who chairs Yahsat, said the performance of the Al Yah 4 and Al Yah 5 satellites it ordered from Airbus in June would “significantly surpass current industry capabilities including capacity, coverage and flexibility” to open up new applications.

The publicly listed company, which provides broadband, video broadcasting, backhaul, and mobile voice and data connectivity with an existing fleet of five satellites, did not provide further details in the news release about expanding into new markets.

Speaking on an Aug. 9 earnings call, Al Hashemi said Yahsat is looking “very closely into Earth observation through partnerships,” as well as growth opportunities in the emerging direct-to-device market.

Next-gen services

The contract with the UAE government includes services from Al Yah 1 and Al Yah 2 — Yahsat’s first satellites covering the Middle East, Africa, and central and southwest Asia that launched in 2011 and 2012, respectively. 

Yahsat’s five-satellite fleet also comprises Al Yah 3 with communications coverage split between Brazil and Africa, and two mobile connectivity satellites via its Thuraya subsidiary: Thuraya 2 and Thuraya 3. 

SpaceX is slated to launch the Thuraya 4-NGS satellite for the operator in 2024.

According to Al Hashemi, Al Yah 4 and Al Yah 5 would bring in 20 times more capacity than Yahsat’s entire fleet currently provides.

While the UAE government has reserved more than half the capacity on Al Yah 4 and Al Yah 5 over their 15-year design lives, he said Yahsat is looking to sell the rest to organizations outside the country.

Government customers are responsible for about 75% of Yahsat’s revenues, which decreased 2% year-over-year to $105 million for the three months to June 30.

Yahsat anticipates most of its business will continue coming from governments for several more years, with five-year projections showing governments still accounting for 65-70% of revenue in 2027.

Ultimately, Al Hashemi said the operator seeks an equal split between government and commercial business.

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