Scott Sprague, the chief operating officer of Asia Broadcast Satellite (ABS) outlines Asia Broadcast Satellite’s plans in the MENA region and offers insights into working with vertical markets and Telcos in particular.
With plans to expand into the MENA region and beyond into Latin America, the conversation with the COO of ABS, Scott Sprague, offered interesting insights. He said: “While the broadcast sector is the bread and butter of the industry, the reality is more than 70% of our revenue comes from data-based applications. We are currently doing considerable work with the US government across the Middle East and Afghanistan. This change was evolutionary as our fleet developed. Some of our existing assets are better suited to data type applications, from supporting enterprise networks in Africa and VSAT networks in the Middle East, to supporting US government applications throughout the region.”
We are currently doing considerable work with the US government across the Middle East and Afghanistan.
Approach towards verticals: Know your regions
Given the current mood in the industry towards consolidating operations and creating separate departments for each vertical, Sprague believes the approach should be more nuanced. He says: “I have had this debate for a long time – about whether you have to manage and recruit differently for vertical markets. I believe you can go to the market with a similar proposition for all the verticals. The people who need to understand the differences in the verticals are usually on the technical side. So the package you offer a broadcast client will be different from an enterprise data client in Africa. It is not necessary to create sales divisions based on verticals; you need to have the right support staff in your technical department.”
With the spurt in HD and the constraint on existing capacity over the Middle East, our location at 3 degrees puts us in an interesting position to help distribute this content
“I believe the sales organisations should be based locally and have local knowledge of customers and the market. One of the challenges you have in the market today is how do you define what a customer does. For some of the traditional broadcasters such as the BBC, it is easy to do that, but with Bharti Airtel, for instance, you have a client that creates VSAT networks in India and Africa as well as rolls out DTH services in India and Africa. With Telefonica, you have a similar diversity in terms of operations. My perspective is that you build teams that understand customers and are knowledgeable about the markets and regions they work in.”
Focus on Telcos
Sprague outlined his plans for the region: “The Middle East and African markets are two very distinct markets. Within the Middle East, we work with various service providers in the market. While we have been successful working with small and mid-level service providers building VSAT networks in Saudi Arabia, Iraq and among other places, we need to establish relationships with the large Telcos in the region. This will be challenging because they have legacy relationships with other international operators. However, I believe, if we establish small trading relationships, they will appreciate the level of customer service we can offer.”
Asked why the Telcos as verticals were being talked about so much within the satellite sector, Sprague offered some industry perspective. He said: “One of the interesting aspects about Telcos for satellite operators is that Telcos are branching out into multiple applications including voice, data and video applications. So on the one hand satellite operators can support this offer. Moreover, with the Telco networks getting clogged up with demand for bandwidth, for instance, the younger generation downloading huge files, satellite operators can step in to create a network or system where Telcos can offload some of that traffic. This will help free up capacity to offer their customers premium data services. I believe there is a good fit for satellite operators in that market space.”
Africa to replicate the Latin American experience?
On the significance of Telcos expanding into the African continent, Sprague said, “In addition, we see Telcos in the Middle East expanding beyond their immediate region into Africa. I believe Africa will follow the path that Latin America took some years ago. The Latin American economies were in turmoil. With fibre coming in, prices for satellite capacity plummeted. The satellite industry pulled back from the market and as a result, there was a lack of capacity to satisfy market needs. Once the economies and governments stabilised, there was an upturn and huge demand for capacity. Latin America is one of the fastest growing markets for all types of satellite applications. From DTH to cable dish networks or VSAT data networks, you are seeing big Telcos such as Telefonica deploy large networks all over Latin America. I believe you will see the same groundswell of demand for capacity over Africa and the Middle East. The industry has learnt its lesson and despite the relative instability in Africa, continues to invest over the continent.”
We’ve brought in ABS-3 – an inclined orbit satellite just over Middle East and Africa to offer a low cost solution for companies for IP Transit. We will provide tracking antennas as part of the bundle service.
Offering cost-effective solutions from an inclined orbit
Satellite operators such as ABS are looking at providing Telcos with more than just backup capacity, affirms Sprague. He said, “Telcos are trying to figure out price points and how they can be competitive. One of the opportunities we have as a relatively small operator is we can move very quickly and offer services at different price points. We’ve brought in ABS-3 – an inclined orbit satellite just over Middle East and Africa to offer a low cost solution for companies for IP Transit. We will provide tracking antennas as part of the bundle service. We are seeing a good uptake for this service. The price point is crucial and we are giving the service provider room to make a decent margin – which is key if you want to retain your customers a year down the line.”
On the issue of offering end-to-end services, Sprague in characteristic fashion outlines a compelling alternative argument. He said: “Satellite operators are good at operating satellites and developing products and services around that. Running end to end services on a global or pan Africa basis should be left to companies that do the job extremely well – I am not convinced that satellite operators are geared to run end-to-end operations.”
“With the launch of ABS-2 in the first half of next year, our tentative plan is to relocate ABS-1 to 3°West and continue to develop the MENA markets. I am encouraged by the breadth of the customer base. Even with the withdrawal of the American troops, there will be demand for bandwidth from the local operators on the ground and for operating UAVs on the part of the US government. With broadcast, we continue to see potential. With the spurt in HD and the constraint on existing capacity over the Middle East, our location at 3 degrees puts us in an interesting position to help distribute this content.”
“Our new satellite (ABS-2) will have a large Ka-band spot beam over the Middle East and Africa. We see Ka-band as particularly relevant in dry climates. One of the innovative ideas we are coming up with is to provide Ka-band service with C-band backup – one antenna to allow customers to switch if they have rain outages. We are in the final stages of developing this hybrid solution.”