Inmarsat Wants in on Galileo Project
Inmarsat wants on Europe’s troubled Galileo navigation project whether it stays a public-private partnership or the European Commission decides it will pay for the project, said Inmarsat CEO Andrew Sukawaty in a Q1 earnings call. Other topics in the call included launch plans for Inmarsat 4-3, use of ancillary terrestrial component (ATC) service and the company’s plans for handheld service.
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“Given our expertise in the sector, we believe we can be successful” no matter how Europe funds Galileo, Sukawaty said. Inmarsat is part of an 8-company consortium trying to create a company to work with European officials to develop the navigation system to compete with the U.S. GPS system (CD May 8 p8).
When talks stalled in Jan., participants got until May 10 to incorporate Galileo Operating Co., name a chief executive and set a negotiating schedule aimed at completing the agreement by Sept. 15. Consortium members missed their deadline, and last week it was reported widely that European officials would cancel the deal with the consortium and revert to a request for proposal system with mostly public financing.
Meanwhile, Inmarsat plans to launch the last of 3 Inmarsat 4 satellites “as soon as a slot opens up,” Sukawaty said. Inmarsat has exercised an option with Lockheed Martin to launch the satellite aboard an Atlas 5 rocket, but other satellites are ahead of it in line, he said: “The satellite is fully built, tested and ready to be launched.” Inmarsat hopes the launch can take place this year or next, he said: “A launch slot will turn up sooner or later.” The Inmarsat 4 constellation covers 85% of the world’s land and 98% of the population. The 3rd satellite in the series will cover the Pacific Ocean, Sukawaty said.
Inmarsat rivals have trumpeted ancillary terrestrial component (ATC) service planned for the 2 GHz band by 4 other MSS operators, but Inmarsat has “downplayed ATC,” Sukawaty said. Competitors need ATC because they need to make use of the full value of the spectrum they have been allocated, he said, implying that Inmarsat, which already has its service in operation, doesn’t feel that pressure.
Urgency at Inmarsat about an ATC partnership has eased owing to potential mobile carrier partners reduced need for spectrum, thanks to the 2006 AWS auction and the coming 700 MHz band auction, said Sukawaty. He believes 3rd and 4th generation wireless services’ future spectrum demands will help his company, he said. “Third generation and 4G require larger channel blocks” than analog or 2nd generation services, he said: “The auctions by the FCC will not fully meet people’s spectrum needs.”
Inmarsat will try to capitalize on Globalstar’s recent service problems (CD Feb 9 p13) when it starts its handheld service this year, Inmarsat Pres. Michael Butler said on the call.
Inmarsat is one of 2 competitors for the European Space Agency’s Alphasat project, Sukawaty said. Alphasat is a “next generation satellite” program, he said, promising more details “when and if we are selected.” A decision is expected soon, he said.
Inmarsat Q1 revenue was up 16% year to year. Maritime revenue grew 13%. Revenue per maritime-data user showed “that demand for data services is expanding on a per ship basis,” the company said. Land sector revenue was up 8%, it said.
Inmarsat expects its in-flight phone and data business to grow as foreign airlines begin testing the technology. Inmarsat is looking overseas because it doesn’t have air-to- ground spectrum, allocated by the FCC to other carriers, said Butler. Revenue from the business rose 44%.