Data business keeps Inmarsat flying

05 May 2008
00:00
News
Stories

Best Satellite Carrier
1. Inmarsat
2. AsiaSat, Hong Kong
3. MEASAT, Malaysia
Last year's winner: AsiaSat

Financial (unaudited results, 2007): Revenue: $576.5m, up 15.3%. Pre-tax profit: $124.8m, up 39%

Inmarsat's position as a mobile satellite services provider aimed at select vertical niches has helped see the operator through some turbulent times, as has its determination to push into new services areas and take MSS into the broadband age.

'We saw years ago that while voice was an essential part of the business, it wasn't where the growth was going to be,' says Richard Denny, Inmarsat's VP of Satellite and Network Operations. 'That's why we invested $1.5 billion in the Inmarsat-4 program and BGAN program.'

The BGAN system, which went live in Asia in late 2006, still isn't global yet, with the launch of the third I-4 pending the results of an investigation into the recent failure of an ILS Proton booster. But where it is live, it's offering 432-kbps peak speeds.

According to Denny, BGAN has essentially opened up a whole new market for Inmarsat to target, as more of its key customers in the government, military, verticals and media sectors need support for mission-critical apps.

More crucially, he adds, BGAN can target the middle ground between Inmarsat's older-generation 64-kbps services and VSAT services, which are faster but more expensive and not as portable.

'There are people in the middle who don't want to spend the money to go to VSAT, so BGAN is more attractive,' he says.

Inmarsat has already leveraged BGAN to beef up its maritime offerings, as well as the aeronautical space. Inmarsat's SwiftBroadband is the brawn behind plans by several airlines to launch in-flight data and cellular phone services. It's arguably dangerous territory - Boeing's Connexion service was an expensive flop - but Denny says Inmarsat's model is a different and better animal.

'In Boeing's case, the market wasn't there to justify the spending on transponder leases. And they were using Ku-band transponders, which required a lot of satellites and a lot of spectrum, so they needed a lot of contacts with different satellite providers,' Denny says. Inmarsat, by contrast, has both the satellites and a platform designed for aeronautical use.

Even more bold is Inmarsat's push, via Indonesia-based ACeS, into the handheld MSS business last year.

Denny believes that, unlike rivals Iridium and Thuraya, Inmarsat's portfolio is broad enough to shield itself from significant financial damage should the handheld MSS market dry up - though he adds that he doesn't think it'll come to that, not even as terrestrial cellular expands its rural reach.

'Terrestrial and satellite are complementary, but it's getting grayer as to where the overlap is,' he says. 'The key is to educate people that satellite isn't the same as it was in 2000, when it was more expensive and couldn't handle the applications that some customers use. Things have changed dramatically.'

Judges' citation

'In a tough market the world's biggest mobile satellite service provider, Inmarsat, has boosted its bottom line by opening up the mobile satellite broadband segment.'

Related content

Comments
No Comments Yet! Be the first to share what you think!