Thuraya, the mobile satellite services subsidiary of the UAE’s flagship satellite solutions provider Yahsat, has concluded Heads of Terms for an investment agreement with Astrocast, a leading low Earth orbit (LEO) and Internet of Things (IoT) network operator.
The transaction, in the form of a convertible loan valued at US$17.5 million, marks Thuraya’s first investment in a LEO satellite constellation. Both parties also aim to extend a 2019 technical cooperation agreement for another four years.
Astrocast operates what is described as one of the world’s most advanced global nanosatellite IoT networks with a focus on enabling low power wide area connectivity solutions across core industries including transportation and logistics, oil and gas, utilities, mining, forestry, agriculture, and maritime. Thuraya says the agreement with Astrocast aims to strengthen its positioning in the IoT market and help expedite the execution of its strategy for satellite-enabled IoT.
As Thuraya points out, the overall IoT market is projected to grow at a CAGR of 22% over the next four years to US$525 billion, and the satellite IoT business is forecasted to generate cumulative revenues of US$6 billion over the same period. Thus, it says, the strategic transaction with Astrocast represents a compelling opportunity for Thuraya to increase its exposure to a fast-growing sector that is still significantly under-penetrated and has a long runway for growth.
The LEO satellite market is clearly hotting up. This deal is not the first time an established satcoms operator has aimed to position itself in this market and will surely not be the last.