THURAYA OFFERS A REAL ‘ANYWHERE’ PHONE FOR AFRICA BUT CAN THE PRICE DROP ANYTIME SOON?
Real "anywhere" remote location technologies like Thuraya and Regional BGAN are currently expensive, niche market applications. But didn’t the mobile phone itself start out that way? The Thuraya is already becoming the phone to have for the ever mobile Yoruba trader so is it too hard to imagine a cheaper, more widely distributed product costing less to use? As ever the incumbent telcos who are agents for it in Africa are often the first to keep prices high. But the company reckons prices will come down in five years time as the subscriber base grows and it has various telcos experimenting with Thuraya powered payhones. Russell Southwood talks to Rashad Bey Al Mora’bi, Senior Sales Manager - Marketing and Sales, Thuraya.
Who owns the company?
Thuraya is privately owned by different shareholders but the majority is owned by Etisalat, the national carrier for all telecoms in the United Arab Emirates. Arabsat, a TV satellite provider is one of the partners along with the Abu Dhabi Investment Authority.
We’ve already launched one satellite and we’re about to launch another one to keep up with our expansion. You don’t need a licence to use the phone but you do need a licence to sell it. It’s like having a GSM licence in some countries. It’s a frequency issue.
How do you sell the service?
We don’t sell to end users direct but have a distribution channel of service providers at both an international and national level. Our agreements with them covers distribution, marketing and service.
It’s complicated in Africa because we have 16 service providers, some of whom are national while others sell into the continent from outside it: for example, there’s a service provider who does this in Dubai. Typically a national service provider will be the incumbent telephone company in a country. They take a percentage of airtime revenue and buy the equipment from us. We will say to them that we sell minutes for this much but if they want to sell for 10% more it’s up to them. But if they do this it will affect their overall revenue.
We don’t sell the phone alone. There are lots of services that are sold out of it. There are also different types of phones: a standard phone, a remote area payphone, a marine one for ships and the fishing industry and a data services option with fax and internet.
What does the handset cost to buy and operate?
The standard phone sells for USD600 but it could be less or more, depending which service provider you buy it from. For some countries you have to add customs duties to that price and some service providers sell the phone at a loss to get the service revenues.
The earth is divided into two sectors: A and B band but on average it’s USD1-1.50 a minute. For some countries it costs less than that. We direct the calls through our own network and use our earth station in Sharjah.
Home Office PCO costs USD1350 (the equivalent of Inmarsat’s product Regional BGAN). It connects via USB or an RJ11. You can then send data for about the same as a voice call: USD1-1.50 a minute.
We’ve also got payphones. Some telcos have got satellite payphones from us on a trial basis and are experimenting with them. This has happened in Nigeria.
What’s your customer base?
Oil companies, the fishing industry, the military, exploration companies, mining companies, Government officials, the UN and the Red Cross. And there are probably between 50-60,000 customers in Africa.
Why the high cost?
If you go back to how GSM used to be. You used to pay USD2500-7000 for a phone and monthly prices were extremely high. Initially we’ve had to think about this as a next generation technology and target specific niche markets. However if there are more users and service agreements the price will go down.
How long will this take?
It will happen in 5-6 years time maybe.
What will the number of subscribers be in three years time?
There will probably be a 30% increase. It rather depends on our agreements with service providers.
Is the company making money?
We are profitable. We were one of the few telecoms companies to make a good profit last year. And our first quarter’s results show us continuing that pattern. We own all our own satellites made by Hughes. The second satellite will be operational in November.