As part of its Abu Dhabi Economic Vision 2030, released early last year, policy experts highlighted telecommunications as one of the many areas in which the capital envisages future growth.
"The emirate's geographical position in the Middle East and its current well-developed telecoms network are important competitive advantages enabling the next phase of sector growth," the Vision 2030 brief states. "Regionally, telecoms is seen as a strong growth sector, with fast-increasing penetration rates for both mobile phones and PCs, and a rapidly increasing number of users."
Taking these factors into consideration, it is of little surprise that the Telecoms regulator is keen for further expansion. A 10-year license to install, operate and manage a public telecommunications network and provide satellite telecom services was granted to Al Yah Satellite Communications Company (Yahsat) by the UAE's Telecommunications Regulatory Authority (TRA) on February 28.
Mohammed Al Ghanim, the director-general of the TRA, told local press, "The licensing of Yahsat today is a testimony of our support for the information and communications technology sector (ICT)."
Yahsat, a wholly owned subsidiary of the Mubadala Development Company, an Abu Dhabi government investor, will pay an expected $27,224 a year in licensing fees. The company will target its hybrid satellite communications services to commercial and governmental clients in the Middle East, Africa, Europe and South-west Asia.
"This is a niche market so we made sure that the barrier to launch such services is as low as possible," Al Ghanim said.
Yahsat is expected to offer internet connectivity solutions aimed at future demand for emerging applications, such as HDTV. In addition they can also provide voice, data, video, as well as other broadband satellite services.
The UAE's telecommunication regulatory framework allows two types of licences: individual and class. Up until Yahsat, the TRA had only issued class licences.
"The licensing of Yahsat comes as confirmation of the role of TRA in driving the country's telecommunications so it can compete globally," Al Ghanim explained.
Nonetheless, launching onto the international stage does not come cheap. In August 2007 Yahsat signed a $1.66bn deal with a European consortium consisting of Thales Alenia and EADS Astrium to develop a dual-integrated satellite system. Following this they inked another deal with Arianespace and International Launch Services to launch two satellites.
A ground control station at Al Falah, which is 50 km from Abu Dhabi City, is expecting completion in the first quarter of this year.
Once launched, the satellite services will be available in 81 countries, making the UAE a global player in this field.
Yahsat CEO Jassem Al Zaabi told OBG recently that there had been a delay to the launch of the satellites due to an earthquake last year at the production facility in L'Aquila, Italy. The first satellite, named Yahsat 1A, had originally been scheduled for launch in the first quarter of this year and the second, called Yahsat 1B, in 2011.
However, the timing schedule has changed due to the natural disaster. Yahsat 1A will now be launched in the first quarter of 2011, while Yahsat 1B will be in the first half of 2011.
Though the quake could be considered an unfortunate setback, the overall project is seen as a long-term venture.
That said, Yahsat has had an anchor client since April 2008, in the shape of the UAE military. The deal sees Yahsat providing secure satellite communications for military operations, with the armed forces leasing capacity on Yahsat equipment for a 15-year period. As part of the turnkey contract, Yahsat will also supply the ground terminals, gateway infrastructure and be responsible for satellite network services.
With the Abu Dhabi government clearly behind a serious push towards ICT development, this growing sector could undergo considerable expansion over the coming years. As high-technology projects, such as Yashat's satellites, provide a solid footing – one unlikely to be impacted by negative economic cycles – so both the region and consumer stand to benefit from the expected knock-on effects on products and services.