The Middle East: to Infinity and Beyond?

The Middle East is a region that never seems to rest. From ancient times until today, it has been an unrelenting source of development, disruption and creation. Known historically as “the cradle of civilizations,” the Middle East gave birth to the earliest societies and, in turn, the earliest urban life and centralized forms of political organizations. Fast forward to modern times and we find the Middle East home to the fledgling Gulf States and newly evolved Israel. It is unique: the Middle East is the birthplace of both the oldest and some of the youngest nations in the world, simultaneously.

What is also remarkable is that the region seemingly makes history as often as it does news headlines. Against a politically and socially turbulent backdrop, the Middle East manages to create “the world’s first” something or the other time and time again. With the world’s tallest building, biggest shopping complex, fanciest hotel, and on and on, it is a region of superlatives, a region of significant achievements — and these achievements are not only earth bound. The Middle East has made a considerable impact on the space and satellite industries. It has not only rapidly caught up to long-standing players, but a multitude of industry insiders expect it to become the fastest growing market in coming years.

This market is certainly promising, but it is also equally complex. The wealth of the oil-rich states together with the region’s need for reliable communications in the face of looming security threats translate to a boon for the satellite industry, particularly for the manufacturing sector. This market, comprising a mix of ethnic, linguistic and religious groups, is not only crowded geographically but also in terms of consumer demographics. And, as a cradle of civilizations, there is always an overtly geopolitical element to the Middle East space market. The inherent competition among Arab states as well as between Gulf Arabs and Iran adds to this. The result is that the Middle East market is not only highly competitive but also forever changing with the political realities on the ground.

So, in an ever-changing landscape, where is the market headed? In addition to the region’s need for reliable and secure communications for military and defense, the Middle East’s vibrant broadcast industry is a major driver of satellite usage. This is in parallel with the growth seen across the Unmanned Aerial Vehicle (UAV) and mobility markets, and in the aviation, maritime and oil and gas sectors, which increasingly need connectivity for both critical communications and to appease the consumer demand trends of employees and passengers. These sectors are expected to remain strong, but what is also being seen is increasing developments in Earth observation. While it has security and energy applications, both crucial for the region, Earth observation is being used to provide an ample feeding ground for training and human skills development, something being well harnessed by the United Arab Emirates with its nascent space program.

Earth Observation and Exploration

Not only can human skills and education be spurred, but also quality of life improves while fueling the global economy, says Mohamed Al Ahbabi, director general of the UAE Space Agency, pointing to the benefits of developing solid space foundations and applications.

“The aerospace and space industries in the UAE continue to be key drivers of the national economy. Today, the UAE operates seven satellites for both commercial and Milsatcom use as national investment in space technology continues to grow. The UAE seeks to develop a long-term strategic plan for a solid and sustainable foundation for advanced space innovation and exploration, all of which is expected to aid the growth of science and a knowledge-based economy. Within the $300 billion international space industry, the UAE’s investment in space technology is already substantial, exceeding $5.44 billion. These investments include data and TV broadcast company Yahsat, mobile satellite communications company Thuraya, and Earth mapping and observation system DubaiSat,” says Al Ahbabi.

With plans for a future mission to Mars, the UAE Space Agency was founded in 2014, effectively banding together all arms of the country’s space program. Its arrival fueled the country’s ambitions to not only join the space race, but also emerge as a global front runner through the development of new technologies, expertise and intellectual property. The UAE Space Agency has been working closely with schools and education councils to ensure that STEM is a key focus area.

“Education experts are advising on curriculum developments that will include more on space science so that children are taught and inspired at an early age about the opportunities that the space industry brings. Special campaigns to engage with school children are also being introduced to keep the education fun and exciting,” says Al Ahbabi, adding that fostering space-related academia and know-how is key to ensuring national and regional security.

“Many security operations today depend on space. Approximately 60 nations own and operate at least one satellite. Today, space capabilities are crucial for a range of defense and security activities including responding to humanitarian relief after natural disasters in addition to times of war. Therefore, every nation needs to develop a suitable strategy to safeguard its interests in space and its space-borne assets,” says Al Ahbabi.

As campaigns for primary and secondary schools continue, the UAE has already laid a solid foundation of Emirati scientific skills, acquired through the knowledge-transfer partnership with Korean Satrec Initiave, which saw the joint manufacture and launch of DubaiSat 1 and DubaiSat 2, the country’s Earth observation satellites. This foundation is now being built upon as the country’s third satellite is being developed, this time exclusively by Emirati engineers with Satrec Initiative only overseeing the manufacture. Developed by the Mohammed Bin Rashid Space Centre (MBRSC), the upcoming satellite, dubbed KhalifaSat, is expected to be launched in 2018.

“In such a competitive landscape, it’s always important to have the right partners. We are building ties with companies and educational institutions to put transfer of knowledge programs in place so that we build specialized manpower while simultaneously developing existing cadres. We have alliances with the likes of the Satrec Initiative to promote our satellite products and have signed contracts with leading providers of integrated and customized solutions for Earth observation missions. These include global promotion and distribution of DubaiSat 2’s products and services to customers worldwide,” says Salem Al Marri, assistant director general for scientific and technical affairs at MBRSC.

The UAE has well-defined long-term goals with the short-term focus on the completion of KhalifaSat and the UAE Mars Mission, which involves the Hope Probe being designed, built and assembled in the UAE before being sent out to the Red Planet.

“The mission to Mars, scheduled for 2020, is our first major mission and that is our main focus in terms of space projects. The UAE also plans to open the first space research center in the Middle East in 2017. Additionally, we are also working on developing space policies and regulations,” says the UAE Space Agency’s Al Ahbabi.

Similarly to the UAE’s quest to gather, develop and increase specialized human capital in the space sector, Qatar is following its 2030 National Vision for human, social, economic and environmental development. Qatar is leveraging ITC and its space-related activities to facilitate education and training and promote advanced sciences. While the UAE’s quest will see increased Earth observation applications and developments, Qatar’s ambitions will continue to drive services for broadcast and communications.

DTH, Security and UAVs

For Qatari satellite operator Es’hailSat, spurring space-related knowledge and training is as important as its current focus on Direct-to-Home (DTH) services. Es’hailSat has a number of educational programs, the first of which saw four engineers complete a 26-month intensive satellite training program with Space Systems Loral (SSL), the company that manufactured Es’hail 1, Qatar’s first satellite. The operator has also sponsored a number of engineering degrees specializing in satellite communications at Surrey University in the United Kingdom.

“These steps are part of our program to develop a core expertise in satellite technology and develop our future leaders. Having satellite knowledge and operational experience plays a vital role in greater self-reliance and, therefore, sustainability,” says Ali Ahmed Al Kuwari, president and CEO of Es’hailSat.

Es’hailSat is currently preparing for the launch of its second satellite Es’hail 2, scheduled for commercial service in early 2017, and aims to enhance its DTH hotspot in the region through new capacity as well as broadcasting unique content and channels. It is also developing a new teleport facility providing satellite Telemetry, Tracking and Control (TT&C) and communications support, as well as uplinking and reception facilities.

According to Al Kuwari, the next 10 years will see changes in many satellite sectors. In addition to Earth observation, these will include DTH and telecom with a major spike seen in UAV services in the next five years. UAV demand will largely be directly linked to the region’s security and political instability, says Al Kuwari, explaining that Middle Eastern militaries have started investing in tactical and surveillance technologies, attributing to the four-fold growth seen in UAVs. This will lead to many countries in the Middle East owning and operating UAV fleets in the coming years, he says.

Mobility, on the back of government-driven UAV demand as well as maritime and commercial aviation, will continue to keep growth in the Middle East market moving, says Al Kuwari.

Broadcast

The Middle East satellite market is well positioned to see growth across all applications. However, the DTH market and associated video services look favorable, especially as customers take an increasing interest in HD, 4K or 8K. With broadcast being such a vibrant market it is the main driver of satellite, next to security, in the Middle East and North Africa (MENA).

“The dynamic broadcast and digital media sector is expected to grow annually by 7 percent from 2016 to 2019,” says Al Kuwari.

OSN, a Dubai-based direct-broadcast satellite provider serving the MENA, believes satellite will remain a primary delivery technology. While the company sees the region’s robust FTA market blossoming still, it expects pay-TV, which has relatively low penetration levels, to grow.

“I also believe that, as infrastructure across the region continues to improve, there will be growth in [Over-the-Top] OTT delivery opportunities, but I’m not sure I see that at the expense of satellite distribution,” says Mark Billinge, chief technology officer at OSN. “While I firmly believe satellite will remain the primary means of reaching the audience, with the quality of service we are committed to deliver, it is also important we embrace new OTT technologies to ensure the most dynamic and flexible service we can.”

UAE puts Pay-TV on the Map

Pay-TV adds vibrancy to the market but despite anticipated growth, TV distribution in the Middle East will remain overwhelmingly dominated by satellite, principally by FTA. After military and defense applications, the main driver of satellite is the Middle East’s broadcast industry. It is so heavily defined by a multitude of FTA channels that it makes the region’s broadcast landscape unique. What further separates the region’s market from North America and Europe, as examples, is that the vast majority of FTA channels are broadcasting in SD.

In the nine years between January 2004 and May 2013, the FTA segment saw a staggering 599 percent growth in the number of channels broadcasting in SD, according to research by the Arab Advisors Group. Against the 699 SD channels, just 2.4 percent of the FTA channels are broadcast in HD only, with 7.3 percent of the channels broadcasting in both SD and HD. This means that, while HD still has a long way to go to catch up, the challenge also represents a good opportunity for growth.

A similar opportunity also exists for pay-TV. It is true that the region is an FTA paradise, but this doesn’t mean an ill fate for pay-TV. With relatively low penetration levels, the proposition has a lot of room to develop. And this includes growth in OTT delivery opportunities, says Mark Billinge, chief technology officer at OSN. Serving the Middle East and North Africa, OSN is a Dubai-based direct-broadcast satellite provider.

“The region’s market is unique by the fact there are hundreds of FTA channels all competing for customers viewing time. I'm not sure there are many markets in the world, if any, where there is a similar scenario. That makes the challenge for pay-TV even harder. To communicate the value of the content, differentiation and technology experience you gain through the platform is even more vital for us. But still the future is bright,” says Billinge.

Is the UAE the beacon lighting this bright future? Figures provided by research group Ovum would suggest so. Ovum finds pay-TV in the UAE stronger than in other markets in the region. Pay digital satellite television accounted for 30 percent of homes at the end of 2012, compared with 24 percent only watching FTA digital satellite channels and IPTV watchers at 29 percent. With IPTV and pay-TV expected to see continued growth, the UAE will play an important role in sustaining pay-TV's lifeline in the region.

So, while growth in IPTV penetration and pay-TV is likely, DTH will remain the region’s primary distribution. VS

_{Adrienne Harebottle is a media specialist and freelance writer for the space, satellite and telecommunications sectors.}