The handheld mobile satellite services (MSS) sector in Asia Pacific has a new player in town with the launch of Thuraya's satellite service in April - and while it's unlikely to result in price wars or massive subscriber uptake, it's bringing handheld MSS into the broadband age.
Following the delayed launch of its third satellite in January this year, UAE-based Thuraya is hoping to export its success in the Middle East into the Asia Pacific. Its handheld satellite voice service will be the centerpiece of Thuraya's offering, pitting it against LEOsat player Iridium and Indonesia-based ACeS, which came under the Inmarsat service umbrella late last year.
All three have carved out their own particular selling points. While Iridium boasts true global coverage and Inmarsat touts its strong track record of reliability, Thuraya's chief claim to fame is handsets that are smaller and lighter than either Iridium's or ACeS', sport UIs similar to cellphones and work indoors if a GSM network is available.
'You need a good UI and similar features to a cellphone, or the customer feels out of place,' says Hooi Jin, regional sales manager for Thuraya's Asia-Pac business. 'It's silly to have to go outside to make a phone call.'
Thuraya says it has already signed commercial partnerships with several telecoms service partners in Asia, including China and Australia, although Thuraya is not ready to name names just yet.
Regardless of the level of competition, Thuraya has a lot to prove in Asia. After a stellar start in 2002 and 2003, its business in the Middle East has reportedly slumped in 2006, with revenues down over 50% and ARPU down from $90 at the start of 2007 to $53 six months later, according to market analyst TMF Associates.
The outlook for MSS isn't much better. TMF Associates president Tim Farrar says that the global handheld MSS market has been shrinking since 2006.
'With recent delays in the launch of new service offerings, any recovery may not come until 2009 at best,' he says.
TMF has already downgraded its handheld MSS forecast from 15% CAGR growth in revenues and 17.2% in terminals by 2010, to just 6% and 11.7%, respectively.
Consequently, the secret to MSS growth in the next few years could be a diverse service portfolio that extends beyond mere voice. That's one reason Inmarsat is using its BGAN broadband satellite service to beef up its maritime and aeronautical businesses, and it's arguably why Thuraya's business plan in Asia is prepared to take on Inmarsat on its own turf. In addition to its core dual-mode GSM/satellite handset service, Thuraya is also targeting Inmarsat's maritime customer base with its new marine terminal, and a satellite broadband service squarely aimed at BGAN. Next month Thuraya will officially launch its Thuraya Over IP terminal, which promises satellite broadband peak speeds of 444 kbps.
That's slightly faster than BGAN, which tops out at 432 kbps - not a major difference, although Jin of Thuraya says that SNG customers might appreciate the extra speed for video transmissions.
In fact, says Jin, even minor details matter because it's service differentiation that's going to drive MSS growth in the region. That's why Thuraya is not only adding data capabilities to its core voice service, but also looking at other service opportunities that broadband will open up, from tracking solutions to SCADA-based remote sensor systems.
'Even with three strong players, we're not going to see much of a price war in MSS, so the differentiation will come from service quality and new services,' he says.