Karim Sabbagh
Yahsat and AI geospatial solutions provider Bayanat announced a major merger at the end of the year, announcing plans to combine into a new AI-powered space tech leader in the Middle East and beyond. The combined business, called Space42, will have an estimated market capitalization of more than 15 billion UAE dirhams (more than $4 billion).
The company’s new managing director is a familiar face in the satellite industry, Karim Michel Sabbagh, the former CEO of SES. The merger represents a significant change for Yasat, which has been one of the preeminent satellite companies in the MENA region for the past two decades. In this interview, Via Satellite spoke to Sabbagh about Space42’s plans after the merger is completed later this year.
VIA SATELLITE: This is truly an amazing combination. Can you talk us through the background to this deal? When did Yahsat and Bayanat start discussing a merger?
Sabbagh: The decision to bring together two of the UAE’s leading space technology companies was based on a shared strategic vision of creating a global leader in AI-enabled space technology in the MENA region. The alignment was immediate.
By combining the forces of Yahsat and Bayanat and combining our complementary capabilities, we aim to create a leading vertically integrated company in the space technology sector, delivering significant value to all stakeholders across upstream, midstream and downstream solutions. The combined company will be well positioned to exploit opportunities at the intersection of geospatial intelligence, satellite communications and artificial intelligence.
“From our perspective, this transaction is a groundbreaking combination that leverages the power of space technology and AI to expand into new territories, unlocking vast business opportunities and international growth. It also marks a strategic milestone in the development of the UAE’s space technology sector.”
VIA SATELLITE: I don’t think we’ve seen a combination like this before in the satellite industry. We’ve seen operator-operator combinations, but we’ve never seen space-AI combinations. Why do you think this is a good path forward?
Sabbagh: Our approach goes beyond typical commercial and financial considerations. The combined company, Space42, is a strategic response to the rapid evolution of space technology, which is expanding with new use cases, transformative technologies and new business models. We aim to establish a leading group with a broad range of activities, including AI-powered geospatial and mobility solutions, satellite communications, Internet of Things, Earth Observation (EO), business intelligence and manufacturing capabilities.
So we are taking a transformative step that, when completed, will cover the entire space technology value chain in a differentiated way. From the very beginning, we are leveraging the power of AI to enable highly efficient operations while offering a broad and comprehensive range of solutions across the geoinformation and satellite communications domains. Our goal is to empower and enable growth in the economies and societies we serve.
VIA SATELLITE: What opportunities does this merger create?
Sabbagh: This merger is a strategic decision that will enable Space42 to target a wider range of sectors and customers through an expanded geographic reach and enhanced value proposition. Combining our geographic intelligence and satellite communications capabilities with AI will enable the development of innovative platforms, products and applications. This will include joint research and development, new use cases, and commercial and operational synergies. Through this approach, we will generate significant economies of scale, delivering significant benefits to the societies and economies we serve.
VIA SATELLITE: Do you think regional carriers, even those with strong national interests, can continue to succeed and expand without getting caught up in some consolidation?
Sabbagh: Space42’s purpose transcends traditional dichotomies in the space sector, such as new vs old space, regional vs global business, and upstream, midstream and downstream models.
Space42 aims to address four imperatives in geoinformation and satellite communications: to participate in the rapid development of the space technology sector from upstream to downstream; to take advantage of rapidly falling development and manufacturing costs; to harness the power of AI to enable new platforms and applications; and to address the need to expand the UAE’s sovereign space capabilities while increasing its global reach.
VIA SATELLITE: Will this impact your future investments in new satellites? How does it change the dynamics of your capital expenditure plans?
Sabbagh: The combination will create synergies that will help us better leverage the resources and capabilities of both companies to expand our business in the space technology sector. With greater access to resources and expertise, we will be able to make informed strategic decisions for long-term investments in our upstream, midstream and downstream segments.
The two companies have already demonstrated a potential partnership by establishing a joint space program in 2023 to improve space capabilities through Bayanat’s geospatial intelligence and Yasat’s space infrastructure. Our investments in space technologies will continue to grow.
Yahsat’s core business of operating communications satellites and providing related services will continue unaffected, including the planned launch of Thuraya 4 later this year and the ongoing procurement of AY4 and AY5, which are significant capital expenditure programs in their own right. The merger will expand Yahsat’s future investments and consolidate Bayanat’s growing capabilities in EO, both through its LEO constellation and other data acquisition assets, including HAPS.
VIA SATELLITE: How does the Thuraya product line fit into this mix?
Sabbagh: Thuraya is a valuable asset for Space42 as it serves an important market segment: Mobile Satellite Services (MSS). As use cases for direct-to-device and other terminals continue to expand, including bespoke and commercial-grade options, Space42 is well positioned to capitalize on these opportunities by building on Thuraya’s existing capabilities and organic evolution.
Expanding synergies with geospatial intelligence further enhances the possibilities: a key example is the development of applications for smart transportation and intelligent traffic management, combining information through IoT, geospatial data and AI to improve related public services.
VIA SATELLITE: Will the combined company be more of an AI company than a space company going forward?
Sabbagh: The formation of Space42 was driven by the ambition to create a global leader in AI-powered space technology. The combination will leverage the strengths and complementary capabilities of both companies to create a unique, vertically integrated provider of AI-powered geospatial and mobility solutions, Earth observation, satellite communications, IoT and business intelligence.
VIA SATELLITE: How do you think AI will impact the space industry overall?
Sabbagh: AI is essential to power multiple aspects of Space42, including design, operations, service, learning and innovation. From a design perspective, AI will enable the creation of smart city digital twins, where geospatial intelligence will be fused with sensor data from ground and space communications networks to improve public services and enhance the experience of residents and visitors. On the operational side, AI will help collect multi-year operational data to optimize satellite operations and improve service quality while enhancing management of space assets.
Additionally, our MSS business will significantly improve customer service through the use of AI-powered tools that will extract and analyze data to help us better understand usage patterns across different market segments and geographies.
VIA SATELLITE: Is this a new chapter for Yahasat and Bayanat?
Sabbagh: Both companies have been performing well and growing strongly since their inception. Yes, this merger really marks the beginning of a new chapter for both companies. Both companies have been growing since their inception, and this merger strengthens their trajectory for future development by combining space technology and AI.
“By creating a leader in AI-enabled space technology, we are establishing a transformative technology platform that will set new standards in the industry and enable geo-information and satellite communications services that will have a profound impact on society and the economy. We are excited about the potential of this strategic step to strengthen our position in the region and globally.”
VIA SATELLITE: Finally, what are your hopes and ambitions for the combined company over the next 10 years? Where do you want to position the company?
Sabbagh: Space42 is well positioned to capture significant regional and international opportunities in geospatial and mobility solutions, Earth observation, satellite communications, IoT and business intelligence, so we are excited about the growth potential that the combined business will realize.
“By creating a global leader in the space technology industry based in the UAE, the combined entity will also deliver significant benefits and value to the UAE, supporting the UAE’s economic vision for economic growth and diversification, while positioning the country at the forefront of global advanced technologies. The UAE’s space economy sector is rapidly developing, cementing its reputation in the MENA region and across the world, and we are committed to building on the success of both entities.”
