Deal bakes in revenue growth and sets the company up as a satellite market consolidator
UAE satellite company Yahsat said its Government Solutions arm has won a new $5.1bn deal to provide the UAE Government with satellite capacity and managed services for 17 years. The deal combines related operations, maintenance and technology management services of ground segment satellite systems and terminals currently provided under a separate contract.
The long-term contract will significantly increase and extend Yahsat’s backlog of contracted revenues beyond 2040.
Yahsat’s two current agreements expire at the end of 2026 and the new agreements will see Yahsat supply services through its existing Al Yah 1 and Al Yah 2 satellites, currently in orbit, and supplement this by two new satellites, Al Yah 4 (“AY4”) and Al Yah 5 (“AY5”) which are expected to be launched in 2027 and 2028, respectively – the new satellites will be built by Airbus.
The AY4 and AY5 procurement, including spacecraft, ground segment infrastructure, launch and insurance, will be funded by Yahsat’s own resources as well as other potential funding options which are currently under review. In addition, the award includes an advance payment from the Government of USD 1 billion to be received in 2024.
The satco, which acquired Thuraya in 2018 – bringing with it much sought-after L-Band capacity which is very suited to direct-to-device communications – recently took a stake in satellite IoT company eSAT Global and has signalled its intention to be a consolidator in what is now a fragmented market segment.
Yahsat has also commenced work with partner Bayanat that will deliver a constellation of five LEO satellites for earth observation based on synthetic aperture radar (SAR) technology, which provides higher resolution data than conventional sensors.
New possibilities
“By complementing our existing fleet with Al Yah 4 and Al Yah 5 next generation satellites, we will be able to serve the government with new cutting-edge solutions that are not currently possible,” said Yahast chairman Musabbeh Al Kaabi.
“The performance of the new satellites is expected to significantly surpass current industry capabilities including capacity, coverage and flexibility allowing us to offer a wide range of next generation applications to our end user,” he added.
“We are delighted to receive this mandate, which allows us to continue to provide capacity and related services to the UAE Government beyond 2026 using our current satellite fleet, and beyond 2040 on two new satellites, which are already under construction,” said Yahsat Group CEO Ali Al Hashemi.
He said the company’s financial position has “never been stronger” and it now has a contracted revenue backlog of AED25.7bn [$7bn] or over 16 times annual revenues based on backlog figures at the end of the second quarter.
“Representing one of the largest backlog multiples and strongest balance sheets in the industry, we remain optimistic about providing a broader, more diverse and cutting-edge solutions portfolio to both the government and our customers,” he said.
Sub-Saharan broadband partnership
Earlier this month, YahClick, the Data Solutions subsidiary of the satco partnered with Nigerian Communications Satellite (NIGCOMSAT) to expand broadband penetration in Sub-Saharan Africa.
The project is expected to begin in Q4 2023 and will see YahClick work closely with NIGCOMSAT to provide faster and more reliable broadband internet connectivity. The improvements will result in speed increases to 25Mbps for standard profiles and up to 100Mbps for dedicated corporate users.
A steering committee compromising executives from both companies has been formed to ensure the implementation of the project is aligned to the national requirement and essential service institutions in Nigeria.