Inmarsat aims to fill the holes in terrestrial coverage
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This year, and the few days prior to its start will inevitably be remembered for its natural catastrophes, which saw the tsunami in Asia, hurricanes in the Gulf coast and the earthquake in Pakistan. And where disaster occurs, Inmarsat, the mobile satellite operator inevitably has a presence.
As well as providing customers at sea with phone, fax and internet connections, Inmarsat provides communications services where existing networks are compromised, in disaster-hit areas and war zones.
The company, originally founded by the United Nations to relay distress signals from ships, has traditionally kept a fairly low profile.
In 2005 it has been busy. In March it launched the first of its next-generation Inmarsat-4 satellites and in June the company made its £1.1bn debut on the London stock market.
This month it launched its second I-4 satellite, which will bring coverage by the two satellites to 85 per cent of the world’s landmass, and will include, crucially, the US.
When the second satellite is fully operational, in January, Inmarsat intends to launch its new broadband global area network, or BGan, which will offer voice, telephone and a range of high-bandwidth services, including internet access. Interest is building in the 26-year-old mobile operator, because of a number of new opportunities which are set to open up for it. These include the potential for a hybrid system for use across the US, following the launch of its $1.5bn two-satellite constellation – a project which has been eight years in the pipeline.
Following a successful launch, Inmarsat will be in a position to capitalise on a range of possibilities including the opportunity presented by ancillary terrestrial component (ATC) technology, which could allow it to operate a hybrid system offering end-users the ability to switch between a terrestrial and a satellite network.
“This could provide a coast-to-coast solution across the United States, filling in all the gaps. People who might want to use this service could include first responders in an emergency, any business traveller who has to move across America, or anyone who is living on the edge of a coverage area,” says Chris McLaughlin, vice-president, corporate and investor communications.
There are many ifs and buts attached to the proposition and the company concedes that it is still early days. For the new development to take off, Inmarsat needs the blessing of the Federal Communications Commission, which regulates interstate and international communications in satellite and other media. Its rival Mobile Satellite Ventures (MSV), has been granted an ATC licence, but Inmarsat, which says it will apply for a licence, has been waiting for its second satellite to become operational before applying.
As a wholesale operator, Inmarsat would also need to link up with an existing US-based telecoms operator. Preliminary talks have taken place privately, but the company is tight-lipped about who it has spoken to. In addition, the company does not currently offer a pocket-sized product.
Inmarsat is thought to have had exploratory discussions with Motorola and Qualcomm about dual-mode handsets or cradle units, where a GSM device could be clipped into a unit enabling it to receive a satellite transmission. Dual-mode phones under consideration would, it claims, be a radical departure from the bulky models of old, which, as one analyst put it, you needed a backpack to carry around.
“These could be comparable to the size of cell phones of about three years ago,” Inmarsat says.
While there is little doubt that the idea of hybrid phones is an attractive idea, several analysts have concerns over the commercial viability of such a product. Patrick Zerbib, wireless analyst with Adventis, said: “It seems like a pretty powerful proposition if the technology works, which in theory it should. However, there is still a big question mark over the economic possibilities. It would be interesting to see what sort of pricing they could command and how many subscribers they would need to take on.”
The company is also lobbying hard for a slice of mobile satellite service spectrum in the S-band, which could open up other opportunities. Its hand has been strengthened in the wake of Hurricane Katrina as the importance of satellite services such as telephony during crises has come to the fore.
The S-band is seen as preferable to the L-band in which Inmarsat currently operates because it is easier to operate new technologies such as very high speed multimedia services here than in the segmented L-band. “This could in theory allow us to offer new products and services in a PDA device supplying data and voice services,” Inmarsat says.
There are a number of opportunities open to Inmarsat, but most analysts believe it is too early to make any firm predictions.
“There is much uncertainty around different fast wireless technologies. It’s very difficult to predict how things will shake out in terms of the the competition from 3G networks, hybrid cellular networks and fixed wireless technology,” says Mr Zerbib.
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