Inmarsat, SkyTerra Seek Outside Help in Building ATC Component

Inmarsat and ancillary terrestrial component (ATC) license partner SkyTerra will look for an outside “established player” to build a terrestrial network to work with the two companies’ satellite networks, Inmarsat CEO Andrew Sukawaty said in an interview. While “nothing has been signed,” the FCC National Broadband Plan recommendations for loosening some of the mobile satellite services/ATC requirements will allow Inmarsat and other ATC licensees to move forward without the expensive regulatory “tethers,” he said. The huge expense in developing a terrestrial network has been one major reason that ATC license holders haven’t been able to find a viable business model and the investment from a larger terrestrial wireless company would help move things forward, he said.

While Inmarsat is most often grouped with MSS players like Iridium, TerreStar and Globalstar, Sukawaty views VSAT companies as the largest source of competition in recent years. VSAT providers are seeing significant growth in providing maritime broadband, and if Inmarsat doesn’t “step up” its performance, the company could lose market share, he said. With fixed satellite service providers providing an increasingly global footprint, VSAT has been able to make inroads in markets the technology doesn’t typically serve, said Sukawaty.

The company still sees its niche as providing “mission critical” services in places where others can’t, Sukawaty said. The company’s new satellite phone service, expected to begin operation in June, will follow that path and serve as a direct competitor to Iridium and Thuraya. Sukawaty expects it to bring in about $35 million, or 10 percent of the $350 million wholesale market, within two years. Iridium is unlikely to be able to start launching its next generation satellites, Iridium NEXT, by the time Iridium sees significant failures in its current generation, he said. Iridium has said it hopes to begin launching NEXT by 2014, but the “chance of them hitting that window is close to zero,” he said. Inmarsat will also have an immediate distributor in the recently acquired Stratos Global, which is also Iridium’s largest distributor, he said.

Sukawaty still expects the company’s variations on mobile broadband service to continue to be a major source of revenue. BGAN, Inmarsat’s mobile ground station, FleetBroadband, which serves maritime customers, and SwiftBroadband, which is used on private planes, are “still in their early stages,” and will aid growth “for years to come,” he said. The company also is constantly vigilant on the regulatory front, protecting its spectrum from potential interference, though Inmarsat isn’t engaged in any major fights currently, he said.