MSS stages a comeback: TMF Associates

14 Nov 2006

The recent IPOs of Globalstar and Orbcomm, as well as the announcement of a joint venture between SES and Eutelsat to bring mobile satellite broadcasting to Europe, highlight the re-emergence of the mobile satellite services sector as a major focus for investors and suppliers, according to MSS specialists Telecom, Media and Finance Associates, Inc.

Tim Farrar, president of TMF Associates and author of a new market analysis report of events in the mobile satellite sector, said the "very different outcomes of the Globalstar and Orbcomm IPOs have confirmed our previously published analyses which were positive about the potential of the handheld MSS market, but cautious on the prospects for Orbcomm's IPO."

The new report also gives additional details on the prospects for handheld services and also analyzes the opportunity for Inmarsat's new BGAN service.

"Initial BGAN sales appear to be relatively modest, confirming our view that this will not represent a major step-change in Inmarsat's land mobile revenues," Farrar said. "However, we are more bullish on the opportunity for Inmarsat's maritime and aeronautical data services, where we expect BGAN to reinforce recent strong growth."

In the handheld market, Farrar added, "We expect the introduction of new, smaller handsets from Thuraya and Globalstar, and the forthcoming launch of new North American mobile satellite systems, to lead to a near doubling of handheld MSS subscribers and revenues over the next five years."

MSS operators may also benefit from the recently announced Eutelsat-SES mobile broadcasting deal, since it will increase the probability of hybrid satellite-terrestrial networks being permitted in Europe.

"Eutelsat's intention to support two-way services could lead eventually to use of MSS spectrum for cellular-like terrestrial services, and thereby increase the potential value of MSS spectrum enormously, as has already happened in North America," said Farrar.

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