Arabsat takes the top spot
March 12, 2014
By Chris Forrester
This past few days has seen the annual Washington get-together for the satellite industry, and which this year has given a special focus on Arabsat’s president and CEO Khalid Balkheyour as the event’s ‘Satellite Executive of the Year’. It is an award that’s well deserved and is recognition of Arabsat’s growing importance in the world of satellite communications.
Balkheyour has been in post at Arabsat for some 10 years (he was previously an EVP at Lucent Technologies) and during that period he has taken a somewhat sleepy organisation to one of the fastest-growing satellite operators on the planet. The past year alone has seen Arabsat absorb Hellas-Sat, bargained a major cooperation with Qatar’s Es’Hail Sat and invested in new pay-TV operator MyHD.
Ten years ago, Arabsat was a failing organisation. It had two satellites in orbit, one of which was suffering some severe technical issues. It was a slow-to-act governmental-dominated operation that needed (to use a polite expression) a kick up the pants!
He did exactly that, and restructured every aspect of the business putting the operation on a solid footing ready for expansion. New satellites were designed and ordered at a spectacular rate. But more than any of this he migrated Arabsat towards a hugely more commercial business, that was able to move swiftly to respond to market demands and changes, and at the same take existing customers forward as the industry matured. Indeed, he totally changed the mentality of the Board, its shareholders and staff.
“Three years ago, we were ranked number 12 in terms of global fixed satellite service (FSS) operators. Then, two years ago, we went up to number 10, and last year, we have gone up to number seven. Hopefully, with the acquisition of Hellas-Sat, we will move up still further. We are not that far away from the number five spot. Of course, there is quite a gap between the ‘Big Four’ and the ‘Next Big Four’ but we want to be high in the next big four,” stated Khalid Balkheyour.
Every year, the conference has as its main keynote a gathering of the top players. It used to be the ‘big eight’, then the ‘big six’ as consolidation and mergers took their toll. Now it is just the ‘big four’ (SES, Intelsat, Eutelsat, Telesat) but perhaps next year the number should be expanded to the ‘big five’ and including Arabsat. That is certainly Balkheyour’s ambition. His aim is to grow Arabsat to be the world’s fifth-largest satellite operator. With annual double-digit growth in revenues that target cannot be far away. Balkheyour’s aim is to achieve that Number 5 position officially by 2020.
He told the Satellite 2014 organisers: “Arabsat is also working on several joint ventures and partnership agreements that are going to transform the whole broadcasting industry in the Middle East.”
“The acquisition of Hellas-Sat was very challenging and cautiously achieved by our shareholders. They were not questioning the validity of the deal, but we had a very cautious approach when pursuing it. It was a new organisation with new rules, but for us it did signify a breakthrough. Now that we have overcome that ‘phobia’ of going international, the appetite becomes bigger. If there is a chance now, we will go for it. We saw this as a learning curve for the organisation. We are still learning, but it was a good achievement and a good start for further deals, which I believe we are now ready for,” stated Balkheyour.
That ‘first step in the international waters’ is an indication of where Arabsat has to go next. From its Riyadh, Saudi Arabia HQ it is well-placed to serve the wider MENA and Africa/Asia regions with capacity. “[the expansion] was very important for us. When we looked at our strategic plan, we realised that if we don’t grow, we start to lose more market share. One of the ways to grow, after we have used up our entire spectrum and resources, we need to go beyond our market and look at other orbital slots and merging with companies,” Balkheyour told the conference.
“Acquiring another company is not easy, especially when you consider the size of the investment. In the meantime, I think we will go for more partnership/Condosat agreements, hosted payloads, etc. If you look at the regional dynamics now, and what we have seen with the Arab Spring, I don’t think many governments will now go with their own satellites. But they will look to join forces with companies similar to Arabsat, and we are on the lookout for those opportunities.”