Inmarsat plc (LSE: ISAT) the leading global mobile satellite services operator and ACeS International Limited (ACeS), the leading Asian hand-held voice satellite services operator, have confirmed collaboration arrangements to offer low-cost hand-held and fixed voice services, initially in the Asian market with extended coverage expected in early 2007 by combining satellite resources.
Under the collaboration arrangements, Inmarsat will assume responsibility for satellite and network operations, wholesale service provision, as well as product and service development. ACeS will focus on distribution of MSS products in the important Asian land and maritime markets and will become a distributor of Inmarsat’s BGAN services.
Inmarsat plans to expand geographic coverage for the hand-held service in early 2007 using the existing Inmarsat-4 satellite covering Asia and further intends to deploy a fully-global service within two years. “This is excellent news for our Middle East customers”, commented Samer Halawi, Inmarsat’s regional director for the Middle East, Africa, and Central Asia. “This new but proven handheld service by Inmarsat will enable us to offer to our customers in the region the full suite of MSS services, at very competitive rates”, added Halawi.
To enable expanded coverage using the existing Inmarsat-4 satellites, Inmarsat will undertake a process of network upgrades and an accelerated modernisation of the ACeS R190 hand-held satellite phone. To support a seamless global hand-held service and to achieve global coverage for BGAN and new broadband maritime and aeronautical services, Inmarsat plans to launch the third Inmarsat-4 satellite and will target a launch date in late 2007.
Michael Butler, Chief Operating Officer of Inmarsat commented, “This collaboration with ACeS accelerates our entry into the hand-held market and begins to realise one of the growth opportunities we have been targeting. Leveraging our Inmarsat-4 satellites and network of distribution partners, we expect to roll out a global Inmarsat hand-held service within two years.”
Inmarsat believes the global hand-held market is worth approximately $350 million today in wholesale revenues and is growing. Following the introduction of a global hand-held service, Inmarsat expects to target a market share of at least 10% by 2010.
Michael Butler added, “Today Inmarsat takes its first steps in launching its global hand-held satellite phone service. Our move into hand-held means that distributors and end-customers choosing the new Inmarsat voice service will benefit from Inmarsat’s long standing reputation for service reliability and quality. Furthermore, through our Inmarsat-4 satellite fleet, we will be the only provider today offering continuity of service on a global basis through the end of the next decade.”
Collaboration agreement
Going forward Inmarsat will record wholesale revenue and active terminals from the existing ACeS hand-held customer base and expects initial annualised revenue arising from the collaboration to be in the range of $3 to 5 million.
In connection with the globalisation of the hand-held service, Inmarsat expects to incur capital expenditures of approximately $40 to 45 million over two years for ground infrastructure and modernisation and development of the ACeS R190 satellite phone, in order to bring the service to the Middle East and the rest of the world.
Launch of third Inmarsat-4 satellite
Inmarsat has today announced its intention to launch the third Inmarsat-4 satellite. This satellite is already fully-built and tested and is currently in storage. Inmarsat expects that the cost of launching the third satellite will be in the region of $130 to 150 million, primarily made up of the launch vehicle, launch insurance and the cost of an additional earth station to be located in the United States. Inmarsat believes the launch of the third satellite will be important to the success of a global hand-held service, but further believes that global Inmarsat-4 coverage will enhance the BGAN service and provide incremental opportunities for new broadband maritime and aeronautical services to be launched on the Inmarsat-4 satellites.
Samer Halawi concludes: “With the launch of the third Inmarsat-4 satellite, our customers in the Middle East will benefit from an expanded coverage for their BGAN service. They will be able to have a truly global mobile voice and data service available to them”.
About Inmarsat: Inmarsat plc (LSE: ISAT) is the leading provider of global mobile satellite communications. Since 1979, Inmarsat has been providing reliable voice and high-speed data communications to governments, enterprises and other organisations, with a range of services that can be used on land, at sea or in the air. The company’s services are delivered through a global network including the world’s leading telecoms groups, operating in over 100 countries worldwide. For the year ended 31 December 2005, Inmarsat plc had total revenue of $491.1 million and profit before tax of $95.5 million. More information can be found at www.inmarsat.com.
