Chairman's Annual Statement to Thuraya's Shareholders
The major strides taken by Thuraya Satellite Telecommunications company in 1999 stress two important facts: first, Thuraya is steadily progressing towards the realisation of the vision of its founding shareholders: and second, that the company is increasingly becoming one of the most viable options for mobile satellite telephony. The developments in the Global Mobile Personal Communications via Satellite (GMPCS) industry versus Thuraya’s achievements in 1999 bear this out.
The year witnessed significant progress in building both the technical infrastructure and the commercial and distribution network. Of course, generation of operating revenues is expected only after the end of 2000- the launch year. The capital and operational costs incurred by Thuraya in 1999 are US $266 million.
This expenditure is part of the continuous investment being made in the construction phase of the project, as well as in setting up the business support systems and developing the company’s employees readiness for service launch next year.
Project milestones set during the year have been achieved. Thuraya has worked closely with Hughes Space and Communications International, Inc. in this period to carry the project many steps forward. The space segment has progressed to the advance stages of spacecraft integration and testing, which is a remarkable accomplishment towards launch.
Construction work on Thuraya’s Primary Gateway in Sharjah has successfully been completed this year. This is seen as cornerstone for the project infrastructure. Work has also advanced significantly on the installations of many core system components at the Primary Gateway including the switching system, customer care and billing system, Primary Gateway Antennas and other important elements.
An important landmark during the year has been the successful finalisation of a financing deal for the Thuraya Project. In July, the company signed a US $ 600 million loan agreement with a four bank consortium to cover the remainder of its capital and operational expenditure. The fact that the deal was realised at a time of turmoil for international financial markets speaks volumes in terms of the credibility reaching vision.
A great momentum for Thuraya throughout the year has been the ongoing expansion of the company’s service distribution network. During 1999, Thuraya has decided a number of strong commercial partners for service provision in its vast coverage. These included such key markets as Pakistan, Sudan, Libya, Kingdom of Saudi Arabia, Egypt and Kuwait. The Company’s marketing programmes are ongoing, and many similar service provider agreements are expected to be materialised throughout the year 2000.
Our marketing programmes, too, have yielded success such as the establishment of roaming partnerships with many GSM operators around the world. In the short span of 1999, we have built a large base of 21 roaming partners. With many more in the process of finalisation, this number is expected to exceed 100 by the end of next year.
Our marketing achievements have been supported and reinforced by an unceasing promotional and brand building programme. Our strong participation in local, regional and international trade events and media has significantly contributed to the creation of a global awareness for Thuraya within the world’s telecommunications community.
The company has been monitoring major developments in the GMPCS industry at all levels, which has prompted a sharpening of its focus on segments and opportunities that would strategically benefit, not only Thuraya’s business plan, but also its local service providers and their customers.
Throughout the year, the company has received continued support from its 18 strong shareholder base. The share capital has been fully paid up, with the last cash call being in January 1999.
At Thuraya, we are poised for a well-positioned launch of a pioneering regional telecommunications service, which is set to have a positive impact on the lives of hundreds of communities and millions of people in the regions that we serve.
With major progress to support our ambitious plans, a solid financial position, the most advanced technology and skilled human resources, Thuraya is determined, not only to be successful, but also become the leader of the satellite services market.
Mohammad Omran
Chairman, Thuraya