Letter | Iridium Still Holding Strong Against Inmarsat Competition
The headline of the March 7 article “Inmarsat’s ISatPhone Pro Handset Outselling Iridium’s Pricier Offering” [page 4] is inaccurate. outsold ’s handsets by tens of thousands during this time frame; moreover, the value of each of those sales contributes substantially more revenue to our bottom line. Iridium’s handset portfolio is valued for its premium offerings and reliability, allowing us to generate hundreds of dollars more for the devices we sell.
The corresponding graphic refers to something completely different: Inmarsat’s marginal lead in new voice subscribers since 2011, when Inmarsat entered the market. While this might be accurate, if you’re going to make this comparison, isn’t the economic value of those subscribers what actually matters? With an average revenue per user of approximately one-third of Iridium’s, Inmarsat would have to outsell us by 3-to-1 to generate the same amount of revenue. So in essence, Inmarsat is making far less cash flow on its combined equipment sales and ongoing service revenue. Given the fact that we ended 2012 with cumulative subscribers totaling roughly 368,000 to Inmarsat’s reported 84,000, we also clearly dominate in market share.
We can all agree that Inmarsat has sold a respectable number of handsets at a lower price point, but the company has done so by expanding the market into areas that are not a target for Iridium’s premium product line. Our year-over-year handset sales have remained consistent since the ISatPhone entered the market, and we are confident that our position remains strong. With our continued investment and innovation, we expect that to continue.
Matthew J. Desch
The writer is chief executive of Iridium.