The need for re-innovation in the space segment

The year 2015 brought with it multiple challenges for satellite companies, especially in the Middle East. The challenges brought along opportunities as well which led to many companies experiencing growth and others facing difficult times. One of the few companies that continued to grow despite the challenges is SkyStream. Riyadh Al Adely, the Managing Director of SkyStream recently talked to Teletimes in an exclusive interview sharing his experience from 2015 and how SkyStream has managed to continue growing in this period.

 

Gulraiz Khalid: How would you comment on the satellite industry looking back at 2015?

 

Riyadh Al Adely:2015 was not an easy year for the industry. The global economy has really affected this industry just like it has any other. In addition to this, the instability in the region and the high fluctuating, volatile oil prices have also affected the growth. We are still working, and also growing, but these factors affected the growth that we and other colleagues in the industry had projected for this year. Nevertheless, SkyStream has done well and should comfortably continue to do well in the coming future.

 

The space segment ecosystem has changed recently. The demand is still good in terms of bandwidth and capacity (the Megabits so to speak), but the dollar side has gone down and that is primarily a causal effect of the factors I mentioned earlier.

 

However, many of us have maintained our growth by capitalizing on a new need in the region that has arisen due to investment in security. We at SkyStream saw this new demand as an opportunity to balance and off-set the decline in other space areas.

 

When I say a decline in other space areas, I do not mean a decline in SkyStream’s activities in those areas. While the dollar value spending did in fact go down, SkyStream not only maintained its position; rather continued to grow. However, the growth in those areas was not as much as we may have projected. Again, it is something for us to learn from. We need to keep in mind, that the “ceteris paribus” is not the way to look at things. We need to better anticipate how various factors, that may seem unrelated at one time, could affect our businesses in the future, so that we may re-shape our business models to adapt to these changes and be more pro-active rather than re-active.

 

 

 

GK: Will the focus on security services mean a complete shift of strategy in terms of targeted verticals?

 

RA:Each year, we have different verticals such as Maritime, Oil & Gas, and Military etc. that we focus on. I can confidently say that for this year, the Military and Security vertical has been the most focused area for us and it should continue to be the most important vertical for us in the coming year as well. The security market is not only a potential area for us to focus on, but it is also a very suitable vertical for the kind of solutions and services we provide, therefore it is a win-win situation.

 

While the security area should be our focus in the coming year, it is not the only area we will be focusing on. We are still very proud of excellent capabilities in Maritime and in Oil & Gas and we should continue to grow in these areas as well. From time to time, we have to look for new avenues to ensure that we grow at the pace we want to, and SkyStream I can proudly say, has grown tremendously in the past and should continue to do so.

 

GK: Which areas are you targeting in the security segment?

 

RA:We are primarily a Middle East company and therefore the focus will remain mainly in the GCC countries; and when I talk about the Military segment in this region, we are not talking about conventional satellites only. We are using new ways of utilizing our abilities and collaborating with our customers to create the most effective and efficient solutions. Today we have cooperation with some very important players to provide Tactical Satellite services on UHF and X band. We are even working on expanding the reach of the Tactical radios by using satellites.

 

GK: Coming back to the challenges faced during 2015, which factor in your opinion contributed most to the low prices and dollar spending?

 

RA:There is no one single element that has solely led to the price war that we are facing today. Each industry grows through certain phases like growth, maturity and finally saturation etc. Today we are at a stage where the space segment has become a commodity. We are lucky enough to be in times where the scientists have done enough research to ensure that the conversion rate is stretched to the maximum and we are able to achieve the highest conversion between hertz to bits. We have more and more companies in the space segment, and the technology is working great, therefore you have an extremely high supply of satellites for now. Keeping this in mind, it is understandable that you will face some tough competition and slow growth, however in my opinion, this phase we are going through is short-term and we will be able to find new ways to continue our growth. As I have said, it is important that we re-shape our business models to adapt to changes and be more pro-active rather than re-active

 

GK:Where do you think is the space industry heading and what should be the way to go for companies like SkyStream?

 

RA:Today, I look at ourselves as an IP service provider, and if we look around, there is probably more than one-hundred thousand IP applications that we can use. With time, we can be sure that there will be more and more demand for data. People are talking about the Internet of Things, M2M and Internet Everywhere. The current hampering of growth is just short term and the future of this industry is actually very bright. Who capitalizes on this bright future may not really be the traditional satellite companies and instead it could be revolutionary ideas like One Web, Google Balloons etc., which is why I believe that thinking out of the box and reshaping our models to utilize our capabilities in new, disruptive ways is very important, in fact I cannot emphasize enough on the importance of the need to re-innovate within our services and our product lines and our processes.

 

GK: Some of our readers would be interested in your opinion about collaborating with telecom operators. Could you share your thoughts on this?

 

RA:Etisalat has been our partner for GSM Backhauling in Maritime for almost five years. We are now in some serious discussions with Ooredoo to partner in multiple areas. Partnering with Telcos is very important for us because it helps us reach a country’s market and users. It is much simpler to enter a market through partnership with an operator that is already established in a market. The cooperation with telecom operators also creates good synergies for both parties, we add value because we have good experience and good relationships in the entire satellite segment, so the operators are able to utilize this to their benefit as well. This is one area we are seriously looking at and you should hear more from us regarding this very soon.

 

GK: Finally, are you looking at geographical expansion in the near future?

 

RA:Other markets in Asia, especially South Asia, and even the European countries provide good opportunity and seem to be lucrative. However, I still believe that we have a lot of room to grow and capitalize on within the Middle East. We have expansion plans, and if we continue with the pace of growth we have seen in the past years, we will definitely grow, not only in terms of our services & targeted verticals but also geographical growth. Nevertheless, the Middle East remains as our primary focus as we are very strong here and I see many opportunities to capitalize on within this market. We will continue to grow, and continue to use our capabilities in conventional and new, innovative ways to provide the best services for our customers, and as such, the future for us seems very bright indeed.

 

Pullouts Quotes

Deck 1: “We need to better anticipate how various factors, that may seem unrelated at one time, could affect our businesses in the future”

Deck 2: “This tough phase we are going through is short-term and we will be able to find new ways to continue our growth”

Deck 3: “I cannot emphasize enough on the importance of re-innovating within our services and product lines to capitalize on the opportunities being provided by the Internet growth”

Deck 4: “Cooperation with telecom operators creates good synergies for both parties”

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