Inmarsat, the UK satellite operator, is being waylaid in the roll-out of services using satellite spectrum, awarded by the European Commission earlier this year, after a legal challenge from an unsuccessful rival.
The London-based group said a legal challenge in European courts from US-based ICO Global Communications, whose North American subsidiary is in Chapter 11 bankruptcy protection, had disrupted plans to launch a pan-European radio or TV service.
The news comes in spite of Inmarsat’s better than expected third-quarter earnings and plans for a proposed $650m bond raising for the satellite group, in which US activist hedge fund Harbinger holds a key stake.
The spectrum licence is unique, as it will allow Inmarsat to offer services, expected to be in partnership with a mobile phone operator or media company, to 27 countries across Europe in one block.
“It’s [the roll-out of the service] been slowed down but not stopped,” Inmarsat said. “We still need to get licences for each individual country and none have been granted yet.
Inmarsat said third-quarter revenue for the period to September 30 rose 8.7 per cent to $176.7m while earnings before interest, tax, depreciation and amoritization (ebitda) rose 18.4 per cent.
That compared to consensus forecasts of revenue growth of 3 per cent and ebitda to rise 10 per cent, a performance that Jonathan Groocock, an analyst at Investec Securities called “frankly astonishing”.
Shares in Inmarsat, which have risen 20 per cent in the last three months, rose 4.30 per cent to 620p.
The proposed bond will be used to redeem bonds totalling $670m due in 2012.
Andrew Sukawaty, who has extended his role as chairman and chief executive until 2012, put the results down to the growing need for data services in areas outside normal network coverage, control of costs and reduced capital expenditure.
“We are well positioned to deliver on our targets for the full year,” he added.
Inmarsat’s pre-tax profit rose 33.5 per cent to $50.2m on the back of demand for data from ships out at sea and airlines wanting to offer in-flight mobile phone services. It has also helped offset the overall decline in global shipping in the downturn.
Turnover for its maritime business grew 9.2 per cent to $89.1m, driven by a 13.1 per cent increase in data revenue.
