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									Middle East overview

             he Middle East is the one of
             the most vibrant satellite
             markets 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

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                                          Cable & Satellite International   may-june 2007
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                                              Cable & Satellite International    may-june 2007
                                                                                             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. This
sets, all of them HD ready, and this                                                              model allowed us to cut costs, acquiring
year for the first time there will be                                                             a virtual fleet without all the risks of launch.
                                                                                                  The model is working, and providing low-
real programming for them to see.”                                                                cost capacity for our customers. Why would
                                                                                                  we want to change this model? Yes, of
   However, Arabsat is backing a region-           added to our virtual fleet with another        course it would be nice to have our own
wide series of demonstrations and in-store         two satellites, one is shared with NileSat     satellite serving the clients, but it has to be
activity to push HD, and having LuxeTV on          at 7 deg West where demand is extremely        extremely cost-effective otherwise
air can only help this activity. NileSat is also   high. In reality, we can barely keep up        you burn a lot of money, which someone
expected to benefit from the explosion in          with demand, and we have to increase           has to pay for. We don't want to do that.”
HDTV, and is already making plans to               our ground facilities. But we have created         “We would like to be recognised
accommodate anchor tenant's Showtime               a new platform for Europe, targeting           as the region's third satellite operator.
and ART channels in HD. More are planned.          Arab audiences in Europe with Noorsat 3.       We are not initiating any price wars,
   As to HD's prospects in general,                It's carrying Arabic programming. It is a      and have a good relationship with
Noorsat's Omar Shoter says the Middle              fact that that some of the important hot       satellite service providers. We are
East is always a year or two behind Europe,        spots over Europe don't necessarily want       dealing with these third parties as well
and in HDTV it is no different. “The retail        Arabic programming, so we have brought         as directly with public and private satellite
shops are full of flat-panel sets, all of them     together a nice variety of family-orientated   broadcasters. We hope in the future that
HD ready, and now this year for the first          programming that's safe to watch.              people will look at us as a one-stop shop
time there will be real programming for            This is already successful and is working      for them, including SD, HD and internet
them to see. The content has to be ready           well, and to a much wider audience than        by satellite.” CSI
and right, and appealing. I firmly believe
that with the usual drivers of sport, movies       Noorsat's virtual fleet
and documentary the market will soon pick
up,” he says.                                      Noorsat 1 (Eurobird 2) at 25.6 deg East (co-located with ArabSat)10.95-11.20
Noorsat's expansion
The region's (current) third operator is           Noorsat 2 (Atlantic Bird 4) at 7 deg West (co-located with NileSat)10.70-10.95
Noorsat, which leases capacity from                Noorsat 3 (Atlantic Bird 2) at 8 deg West                          10.95-11.70
Eutelsat. Noorsat, with offices in Bahrain                                                                            12.50-12.75

Cable & Satellite International      may-june 2007                                         page thirty seven

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