Frost & Sullivan Market Insight: Military Unmanned Aerial Vehicles in the Middle East

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The Middle East UAV market is supported by strong intent and the ability to invest. Frost & Sullivan projects that the demand for military Unmanned Aerial Vehicles will grow significantly in the Middle East.

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Frost & Sullivan Market Insight: Military Unmanned Aerial Vehicles in the Middle East

  1. 1. Market Insight: Military Unmanned Aerial Vehicles in the MiddleEastMahendran Arjunraja, Senior Research Analyst – Aerospace, Defence& SecurityIntroduction-
  2. 2. 2Unmanned Arms Race in the Middle EastMiddle East States are waking up to the potential of Unmanned Aerial Vehicles(UAV). At IDEX 2013 this year, the United Arab Emirates (UAE) announced a dealto buy an unspecified number of Predator drones from the United States (US) firmGeneral Atomics in a deal worth $196.57 million. The deal will initially focus on theprovision of surveillance variants of the UAV, as opposed to the weaponisedplatforms currently in service with the US Air Force and others. This news adds tothe increasing popularity of UAVs in the Middle East.The UAE and Saudi Arabia are among several states, according to diplomaticcables released by WikiLeaks, that requested US officials to provide armed drones.But the U.S had been refused citing Missile Technology Control Regime (MTCR).However the recent sale of ISR only UAVs to UAE shows that the U.S has relaxedthe restrictions to an extent. The increasing demand for UAVs in the Middle East,evolving threat in the region, and the DOD budget have pushed United StatesOEMs to look for UAV opportunities in the Middle East.In the Middle East, Israel is considered to be a pioneer in UAV technology. Israelstarted its UAV program early and today its capabilities are much further aheadthan any other state in the Middle East (or even globally, bar the US). Israel madeUAVs are in service with a number of forces globally.Though far behind in terms of technology, Iran has invested significantly and isaiming to be at the forefront of UAV technology development. Although Iran boastsabout its UAV capability, it is difficult to verify its claims though the capture of theUS stealth UAV could certainly boost Iran’s next generation UAV aspirations. In2011, Iran claimed to have captured a sophisticated US surveillance drone (RQ 170Sentinel) in its territory and unsurprisingly refused the US request to return it. InDecember 2012, the Iranian military said it had captured a relatively lesssophisticated US drone, ScanEagle. In its recent string of announcements, Iransaid that it had managed to develop clones from these captured UAVs anddomestic variants are in the production line. With no reliable source to verify theseclaims, the truth is, UAVs offer smaller states a way to expand their strength beyondtraditional expectations. The lack of UAV capability in the larger Middle East states
  3. 3. 3significantly influences the regional power dynamics. Recently, the Hezbollahmovement acknowledged its use of UAVs against Israel. Gulf Arab states arealarmed at the civil war in Syria and want to ensure that popular uprisings in NorthAfrica do not spread to the Gulf. They are also concerned about Iran’s nuclearprogram. Every large country in the region understands and acknowledges thepotential of UAVs and are willing to invest heavily in acquiring them.Current status of UAVs in Middle EastApart from the notable exception of Israel, other Middle East countries do not havea strong domestic development capability. Some of the Middle East countries havetried to develop UAVs locally and these are in various stages of development.However, they are nowhere near US and Israel technology levels. Rich andpolitically stable Arab nations are taking significant steps to developing indigenouscapability. Among the Gulf nations, UAE is more focussed on boosting its UAVcapability. The UAVs displayed at IDEX managed to generate a lot of interest fromnearby Saudi Arabia and Oman. Efforts to develop a strong indigenous capabilitywill take some time to materialise and until then, Middle East nations will have todepend on foreign equipment.The US and Israel are the top UAV exporters globally. Due to historic conflicts,Israel does not have military ties with the Arab nations and until now, the MiddleEast countries have had no other option than to procure UAVs from the UnitedStates. As UAV technology has become increasingly popular, many countries haveachieved significant success and may soon reach a stage where they can export toMiddle East. However regional interest and expertise in this domain is rising fast, asis illustrated in the table below;Country UAS Name Manufacturer Status PrimeCapabilityEndurance(Hrs)Iran Sobakbal FARC In progress 2Iran Ababil 3 Ghods AviationIndustriesCompletedIran Mohajer -1/2/3/4/5Ghods AviationIndustriesUAV Programs in the Middle East
  4. 4. 4Jordan JordanFalconJordan AdvancedRemote SystemsIn progress 4Jordan JordanArrowJordan AdvancedRemote SystemsIn progress Aerial target 1Jordan SeekerJordan I Hawk MIMLebanon Mohajer IVUAE Smart eye ADCOM In progress HALEUAE SAT-400 ADCOM Completed Target drone 2UAE Yabhon-R ADCOM Completed SAR monitoring 30UAE Yabhon-M ADCOM Completed ReconnaissanceUAE Yabhon-H ADCOM Completed Reconnaissance 8UAE Yabhon-HMDADCOM Completed High speedtarget drone1.2UAE Yabhon-RX18ADCOM In progress MALEUAE Camcopter Scheibel /ADASI CompletedUAE United 40 ADCOM In progress MALEIn an effort to increase their unmanned capabilities, UAE has created organizationslike Abu Dhabi Autonomous System Investment Company (ADASI), a subsidiary ofTawazun to spearhead UAE’s unmanned capability ambitions. ADASI has a longrelationship with an Austrian based company, Scheibel, which produces CamcopterVTOL UAVs. Leveraging on its success in UAE, Scheibel has managed to sell twoCamcopter systems to King Abdullah II Design and Development Bureau (KADDB).Bahrain has a requirement for UAV surveillance solutions for national securitymissions.UAV Opportunity Map, Middle East, 2013 - 2020
  5. 5. 5General Atomics’ ISR only Predator sale to the UAE is the first of its kind in theregion. Apart from civil rights, the US had concerns about Missile Trade ControlRegime (MTCR) but seem to have understood the strategic implications of notcatering to the Middle East market. With domestic defence budgets coming underpressure, American UAV suppliers are pressurized to look for export opportunities.The present MTCR guidelines act as an obstacle for exporting UAVs. The primaryfocus of Missile Technology Control Regime (MTCR) is to control the spread ofcruise missiles and ballistic missiles. Since Unmanned Aerial Vehicles can deliverweapons, they were included in MTCR.UAV Proliferation and Missile Technology Control Regime (MTCR).Source: Bureau of industry and security, US dept. of commerceMTCR can be bypassed by providing UAV “services” to other nations instead ofselling the equipment. When UAV capability is rented, the ownership of theequipment still lies with the supplier country. Hence it is not covered by the MTCR.In the recent Predator sale to UAE, the US manufacturer, General Atomics haddeliberately modified the design, which makes adding new weaponry impossible.Hereon, US might either look out for options to bypass MTCR or it might bringchanges to the existing norms in order to tap the Middle East market.However, large numbers of US UAV companies are forging ties with local partners.ADASI has made a deal with Boeing to address the growing Middle East market forUAVs. Under this agreement, ADASI will provide training, support and marketing
  6. 6. 6services for Boeings ScanEagle and Integrator unmanned aircraft systems in theUAE, with prospects to expand into other Middle East countries and North Africa.Northrop Grumman also supports ADASI in making UAVs popular in the region.Together, these two organizations are conducting an Unmanned Systems rodeo.Rockwell Collins has opened an office in Abu Dhabi to quickly identify and cater forfuture opportunities. UAE’s two core strategies to forge ties with internationalcompanies whilst encouraging (promoting through offsets and technology transfers)domestic development are certainly a short and quick route to success.Traditionally the UK and France have been major defence partners for MiddleEastern countries. But when it comes to UAVs, the UK and France have limitedcapability themselves. Hence Middle East countries are looking for other partners.Turkey, with strong cultural ties to the Middle East, has made significantdevelopments in unmanned capability. ANKA UAV, which is being developed byTurkish Aerospace industries (TAI) has completed the acceptance test by theTurkish Air Force. TAI is also increasing its presence by associating itself with theEADS developed Talarion program. It is highly likely that Middle East countries willimport a good number of UAVs from Turkey. Interestingly, Pakistan made UAVshave also managed to generate interest in the Middle East region. Nicheparticipants such as Integrated Dynamics are taking a lead in establishing Pakistanas a regional supplier.ConclusionThe Middle East UAV market is supported by strong intent and the ability to invest.Frost & Sullivan projects that the demand for military Unmanned Aerial Vehicles willgrow significantly in the Middle East. The United States has relaxed its Middle EastUAV export policy, which opens the market for US suppliers. In spite of high levelsof competition, Middle East is a lucrative market for UAV manufacturers, as it is forDefence & Security generally. Frost and Sullivan have noticed the UAVdevelopment efforts by some Middle East nations and they have the potential to
  7. 7. 7become domestic as well as regional suppliers. The expansion of domesticproduction capabilities within the Middle East will only increase as manufacturersgain confidence and their platforms mature and attract international customers.Frost & Sullivan’s is publishing new reports on Military UAV Platforms and Systemsmarket assessments this year. To know more about these reports please contactMahendrana@frost.com or Aman.Pannu@frost.com.About Frost & SullivanFrost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leveragevisionary innovation that addresses the global challenges and related growth opportunities that will makeor break todays market participants. For more than 50 years, we have been developing growth strategiesfor the global 1000, emerging businesses, the public sector and the investment community. Is yourorganization prepared for the next profound wave of industry convergence, disruptive technologies,increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamicsand emerging economies? Contact us: Start the discussionwww.aerospace.frost.com

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