1. Feature / FA2 / UAE Satellites / Bilal & Aghyad
From Sputnik to Yahsat!
By Bilal Hijjawi and Aghyad Al-Abbas
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Quiz! Which country has recently launched one of the most advanced
satellites into space? Who was the smallest country to enter the space race in
the late 1950s, marked by the launch of Sputnik? Who pioneered mobile
personal satellite telephony? Surely not Arabs! Read on.
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It was almost noon on a hot early June day. The taxi driver had a puzzled angry look as
he pressed ahead over the seemingly endless narrow gravel road in the desert. Soon
however the white façade of Abu Dhabi’s Al Yah Satellite Communications Company
(Yahsat) would come into focus in the distance and the driver relaxed.
This was obviously our destination as nothing else stuck out in this part of the Emirati
desert. At more than 40 kilometers away from Abu Dhabi, Yahsat’s location escapes the
city’s dense electromagnetic interference. The building hung low but as we got closer, a
massive circular white structure emerged; the architects must have designed it to inspire
the feel of orbits in space.
Inside the Yahsat building a futuristic uninterrupted layout supported by an understated
functional interior prevailed. There were many tiny offices divided by glass walls, the
ceiling was high and the corridors long but separated by thick and heavy wide steel doors
that automatically swing open upon approach.
“We wanted an environment that offered the least possible barriers to communication,”
said Tareq Hosani, Deputy CEO at Yahsat. Teams of directors, engineers, technicians,
experts and marketers of mixed European, Asian and Arab backgrounds were glued to
their terminals while others scurried around. About 60 percent of the core team is
Emirati, 30 percent other Arab nationalities and the rest foreign.
Not far from Abu Dhabi is another bid for space business. This is the Dubai-based EIAST
or the Emirates Institution for Advanced Science and Technology and it’s the project that
set the UAE’s government on the space course.
In July 2009 EIAST launched DubaiSat-1, a $50-million satellite that is an earth
observation spacecraft with a 5-year lifespan. Its orbit is 680 kilometers above Earth.
This project is less of a commercial venture and more of a UAE observation and research
vehicle. On some level it is helping different Emirati institutions gain earth data while it
has also been giving hands-on experience on satellite technology.
According to Mohammed Al Mansoori, Director General of EIAST, DubaiSat-1
applications serve the UAE and clients abroad. He cited applications for the satellite

2. as an urban planning tool used by Al Ain municipality, as a site-surveying tool by
Abu Dhabi; in Dubai it was used to plan its program of road infrastructure
expansion.
Beyond the UAE, DubaiSat1 acted as an aid tool in disaster management. It was used
to transmit images from tsunami stricken areas of Japan and from flood-affected
stretches in Pakistan. “We are part of the country’s knowledge-based economy, we
want to see our satellite images as a source of information,” added Mansoori.
EIAST will be launching DubaiSat2 in late 2012. This second satellite would bring
substantial technological improvements over the first satellite, according to the
Head of Space Programme Salem Al Marri. The satellite features technical
improvements in data connectivity speeds that will allow it to capture and send
images from a wider coverage area to the ground station.
Marri says the second satellite would prove a most valued investment, and not only
because it’s advanced, but also because it will pave the last mile for building satellites
that would be 100 percent designed and developed by Emiratis. When this goal is
accomplished, Mansoori estimates that the cost of building a DubaiSat3 would drop by
60 percent. The local engineers at EIAST and other staff members had spent a year of
training in South Korea and are perfecting their craft in the UAE labs.
Other improvements in DubaiSat2 will include better image resolution, electrical
propulsion, state-of-the-art camera and sensors. Marri is an Emirati expert that had
actively participated in the stages of development for DubaiSat1 and had influenced
the design of its remote sensing camera. Remote sensing satellites have various
applications, commercial and otherwise. Google Earth is a potential client for
EIAST’s higher resolution images, as are real estate companies and business that
require maps and live imaging of earth.
Morocco, Saudi Arabia, Egypt and Algeria also own satellite assets in orbit, added
Marri. But “As an advanced technology DubaiSat2 is would be outperforming what’s
out there,” Marri added. This, he hopes, will translate to better rewards financially,
but he doubts they’d be able to retrieve more than half the cost spent on building
and launching the satellites.
This is the face of the new daring UAE investment community. Ultimately, these
investments are expected to produce competitive financial returns and bring felt and
lasting rewards to the UAE.
Yahsat, the commercial satellite company, was set up in 2007 with $1.66 billion in
capital raised through Mubadala Development Company (Mubadala), the investment arm
the government of Abu Dhabi established to diversify economic resources. The operation
by the end of this year is expected to own and operate two satellites in orbit.

3. The first satellite (Y1A) delivered to Yahsat became operational on the 13th of this June.
The second satellite (Y1B) is currently undergoing final testing in Europe to ensure its
durability and operability in the harsh conditions of space orbits. It is slated for launching
by the end of this year.
The first commercial satellite operation in the UAE, however, dates back to 1997, which
was when Thuraya pioneered satellite mobile telephony. The company launched
Thuraya-1 in 2000 and later added Thuraya 2 and 3, in 2003 and 2007 respectively.
Thuraya was set up with a project cost of over $1 billion and its first satellite had already
gone out of service in 2007 and was junked into a special orbit. A good number of
Yahsat’s employees had worked for Thuraya before.
In the past, the Arabs were satisfied with leasing satellite capacity from foreign operators.
This started to change in 1976 when the Saudi company Arab Satellite Communications
Company was founded. Its strategy was to design, execute and operate satellite assets. Its
first one was Arabsat-1A, launched and positioned successfully in orbit in 1982. The
company’s today operates 5 satellites in two locations in orbit.
Mubadala itself isn’t old. Established in 2002, it funds ventures that are capital and skill
intensive, many of which are outside the oil industry. Its 2010 revenues rose 22 percent to
reach $4.36 billion and its assets grew by 14 percent to reach $27.6 billion. Its investment
strategy pursues investment in the industries of energy, property, IT, infrastructure,
capital markets, healthcare and services.
Mubadala, which makes its financial data public, is not yet solely focused on profits but
its management often talks of socioeconomic returns and the ultimate drive toward
diversification. The company has been expanding fast and diversifying wide; and while
in 2008, its oil and gas investments had accounted for 80 percent of its revenue stream;
this has dropped in 2010 to about 38 percent. Yahsat is one of several capital-intensive
tech-focused non-oil investments.
Bigger Markets Bigger Capital
The first satellite system launched by Yahsat had cost $600 million to completely set up
in orbit. It is a costly rising star in the world of satellites but is the first in the world to
offer dual commercial and military-level communication applications.
“Yahsat is offering the newest technology flying in space today… and this is a source of
great pride for the Emiratis just as it were for Asian nations not so long before them.
Satellites are literally flags in space,” comments US-based expert who worked on
different projects in the UAE and Asia; he asked not to be named in this article.
The different technologies onboard Y1A will allow Yahsat to target clients seeking
direct-to-home (DTH) TV and as easily as it can sell to government and public agencies
seeking highly secure communication channels via its Ka band capacity (frequency
range: 26.5 to 40 GHz), which is also used to supply direct broadband services to

4. customers. Companies can also seek corporate telecommunication services and telecom
clients can purchase GSM backhauling.
In terms of investment risks Yahsat has a good mix of services on offer. And they’re
“Good enough to lay off market risks,” the American expert further commented. “In the
First few years you build the customer base; first year revenues are slow but after 3 years
contracts have a 10-year duration and this brings 2 to 3 times return on investment… I’ve
been in such businesses for more than 30 years and have seen it blossom and make
money for investors,” he continued. “Such contract life spans also mean that these
businesses are pretty much recession proof.”
So, this big investment has firmly put Abu Dhabi in the supplier market for space
services. “We’ve already sold 150 percent of the capacity we had initially projected in
some one market niche. This has gone to countries that suffer from weak infrastructure,
including Afghanistan and some African nations. After we launch the second satellite
[Y1B], we will become one of the largest ten satellite operators in the world in terms of
revenues,” Hosani forecasted. While he didn’t specify what service has been
oversubscribed, most likely this would be the secure communication offering to
militaries.
Different armed forces operating in Yahsat’s geography have already shown serious
interest in buying capacity. The geographic footprint covered by Y1B serves more than
85 countries in the Middle East, Africa, Europe and South West Asia.
The rates offered by Yahsat are highly competitive too. According to Hosani, the C-band
transponder base rate for example ranges between $540,000 and $680,000 annually.
What Yahsat can offer on top is higher reliability and better overall quality and capacity.
“This is making it easier for us to sell our services and has impacted demand positively,”
adds Hosani.
One market segment that Yahsat plans to service may prove quite difficult to crack and
that is direct-to-home (DTH) TV. Most broadcasters like Orbit Showtime Network
(OSN), which is a pay satellite TV, will not so readily buy capacity on Yahsat’s satellites.
Using any new satellite would mean sending a technician to every customer’s household
to readjust the satellite dish to the new position, comments David Butorac, the CEO of
Dubai-based OSN. “This would be very costly for our company.”
Any new satellite TV broadcaster would want to be on a vehicle that the masses are tuned
to and these usually are the ones that have the biggest numbers of free-to-air TV stations
offered on them, such as Arabsat, Nilesat and Eutelsat in the Arab world.
Space Age Broadband
But Yahsat’s direct to home broadband or Yahclick (as it is branded) is just another
system for reaching the masses. “This is revolutionizing how millions of people would be
accessing the Internet,” comments the American expert. “It’ll give Internet users direct

5. uplink and downlink capabilities in the Middle East, Africa and Western Asia.” Satellite
Internet connectivity isn’t new as a few other satellite service companies have been
offering it; the difference with Yahsat is that rate will be tailored to the masses.
According to Yahsat’s Chief Commercial Officer Shawkat Ahmed, competitive rates
could come as low as $30 and $40 monthly, depending on a market’s average purchase
power profile. At these rates, projections for market size could be huge and not just on
the African continent, but in different markets across the Middle East, where Internet
speed is low, expensive and often unreliable. There is a catch, however; the modem or
receiver won’t be so cheap and a source at Yahsat estimated that it might be higher than
$300.
The company will not be alone in targeting Africa’s Internet user base via satellite. O3b
Networks is expected to offer fiber-quality satellite-based connectivity to
telecommunications operators. It has already raised over $1 billion to launch its first
satellite system to serve developing markets in Africa and other areas. Yahsat’s
commercial Internet services will come online after the launch of Y1B (the second
satellite) and the broadband service will be sold via partnerships in 25 country-markets,
adds Ahmad.
Back to the Future
However, what could be most surprising (and perhaps sad too) is not the nascent space
race between GCC countries, but a little known rocket experiment done 50 years ago in
Lebanon. Young Manoug Manougian, 25, had a passion for rocketry then and there,
when the Russians and Americans took the cold war to space.
Manougian founded a small rocket science society at his university in Beirut that resulted
ultimately in manufacturing rockets. By April 1961 the society’s rocket launches were
“remarkably successful” and they were monitored not only by the Lebanese military, but
also by cultural attaches from the US and Soviet Union embassies. In fact, one rocket
made it into the lower orbit of the thermosphere at an altitude of 145 kilometers.
By 1966, this ambitious rocket project was dead. But last month in the famous annual
Sharjah art festival, two Lebanese artists honored the rocket launch on its 50th
anniversary and the rocket society by building a life-size model of the rocket.
One cannot but wonder “What if?” What if this rocket project thrived and marked the
beginning of the space Arab industry? What if Manougian’s rocketry passion was
nurtured? Would an Arab rocket company have delivered the satellite payloads of
Yahsat, EIAST and others today? The answers couldn’t be more relevant today, as this is
exactly what the UAE and others are considering now: Investments in local rocket launch
stations. It’s never too late.