PARIS — Mobile satellite services operatoron Jan. 2 closed on its purchase of U.S. maritime communications services provider Globe Wireless for $45 million in cash in a bid to transform Globe Wireless’ 6,000-ship customer base into future Inmarsat Global Xpress broadband users.
Palm Bay, Fla.-based Globe Wireless, which Inmarsat said reported $91 million in revenue in 2012, currently is a customer for Inmarsat’s Fleet Broadband low-speed maritime service products and uses Inmarsat competitor’s OpenPort service as well.
The company also is a customer for Luxembourg- and Washington-based’s higher-speed C- and Ku-band transmissions to ships fitted with very small aperture terminals, or VSATs. Intelsat and other established satellite fleet operators whose business historically has been mainly on land are targeting mobile communications, including maritime, as growth markets in a direct challenge to London-based Inmarsat.
One industry official said Globe Wireless has been struggling financially for a couple of years and has been looking for a buyer, a fact this official said may help explain why the purchase was concluded for only one-half of Globe Wireless’ annual revenue.
The Global Xpress Ka-band service, for which the first satellite is now in orbit with two to follow in mid-2014, is Inmarsat’s response to the VSAT entry into maritime markets.
Inmarsat is trying to lure maritime VSAT users to Global Xpress through its XpressLink program that bundles VSAT links provided by Inmarsat competitors today with a commitment to move to Global Xpress when that service is available.
Frank Coles, president of Inmarsat Maritime, is a former chief executive of Globe Wireless.
In a statement Dec. 17, when the acquisition was announced, Coles said Inmarsat will make available to its customers Globe Wireless’ existing capability in value-added services including software development and “touch the ship” support and installation services.
Adding the Globe Wireless workforce, which is stationed around the world, will enable Inmarsat to outfit XpressLink customer ships more quickly than the current rate of around 30 ships per month. Inmarsat Chief Executive Rupert Pearce said keeping up with the demand for XpressLink has “pushed Inmarsat near the limit of its existing engineering capability.”
Quickly adding Globe Wireless’ value-added services to Inmarsat’s existing portfolio will promote increased per-customer monthly revenue “that might otherwise have taken years to develop through in-house development of an equivalent product range,” Inmarsat said.
The company said it expects that “significant operational synergies” from integrating the two maritime business units will “deliver a material improvement in profitability within the first year.”
Airbus Defence and Space Signs on As Distributor of Global Xpress
Meanwhile, Inmarsat on Dec. 19 filled a big gap in its Global Xpress preparations by signing its biggest distributor, Astrium Services, now part of Airbus Defence and Space, to a strategic agreement on Global Xpress distribution.
Astrium Services, which on Jan. 1 officially became part of the newly organized Airbus Defence and Space conglomerate, became Inmarsat’s biggest distributor in late 2011 with the billion-dollar purchase of Vizada.
Boeing Space and Intelligence Systems of El Segundo, Calif., bested another division of Airbus Defense and Space in the competition to build the Global Xpress satellites. In return for the manufacturing contract, Boeing signed a take-or-pay agreement with Inmarsat under which it would guarantee the sale of Global Xpress services to U.S. government customers for the first five years of Global Xpress operations.
Industry officials said Airbus did not make such a commitment, but instead will be a favored value-added distributor of Global Xpress to Airbus’ large customer set.
Combining its Vizada-heritage L-band distribution network and its X- and UHF-band military communications services offered through Britain’s Skynet fleet and operator Telesat’s Anik G1 satellite over the Pacific region, Airbus is a major presence in the mobile satellite services sector.
Given its position, Airbus was long expected to sign on quickly as a Global Xpress distributor. But on the military side, its anchor customer, the British Defence Ministry, has yet to express a formal requirement for Ka-band connectivity.
In a joint statement on their agreement Dec. 19, the companies said Astrium will provide Global Xpress “to key vertical markets including the maritime as well as the government and defense sector, initially in Europe.”
Boeing’s agreement with Inmarsat gives Boeing the right to sell Global Xpress to U.S. military users, regardless of where they are.
Airbus officials have long said they are “agnostic” about which frequencies they employ on behalf of their customers. That left open the possibility that Airbus would sign on with Luxembourg- and Washington-based Intelsat to distribute Intelsat’s Epic high-throughput service, which uses C- and Ku-band frequencies.
Negotiations on the final agreement turned on whether Airbus would prepurchase capacity as Boeing had done, and if not what price discounts in Global Xpress bandwidth would be granted Airbus to take to its distribution base.
Evert Dudok, who heads Airbus Defence and Space’s Communications, Intelligence and Security division, which includes the former Astrium Services, said the Inmarsat agreement “is the natural continuity of a long-standing partnership” between the two companies. “Astrium Services has been Inmarsat’s number-one distribution partner since we acquired Vizada in December 2011. We are eager to continue this strong relationship.”