Mobile satellite services fleet-operator Inmarsat’s new mobile-broadband product is expected to begin commercial service in December, with 14,000 terminals already ordered from three hardware suppliers, Inmarsat officials said.

London-based Inmarsat is counting on the new service, called Broadband Global Area Network (BGAN), to permit the company to make inroads in the market for Very Small Aperture Terminals (VSATs), which are stationary satellite terminals used by large businesses to communicate with branch offices.

Until BGAN, Inmarsat products could not offer the transmission speed that VSAT owners expect.

Capable of transmission speeds of nearly 500 kilobits per second, BGAN terminals will still not compete with VSATs on speed alone. But the BGAN price — $2,000-$3,500 per terminal — and mobility may win over some VSAT customers.

Inmarsat also is looking for BGAN to enable Inmarsat to retake market share it has lost in recent years to hand-held satellite telephone service providers. Inmarsat expects to add a hand-held product to its product line within two years, Chief Executive Officer Andy Sukawaty said.

In a Nov. 23 conference call with financial analysts and a subsequent interview, Sukawaty said Inmarsat’s existing voice traffic has been declining by between 5 percent and 11 percent per year in recent years because of expanding terrestrial cellular networks and the availability of hand-held satellite telephones.

Sukawaty said this erosion should slow, and might stop, once the BGAN service is fully operational.

BGAN uses the Inmarsat 4 satellites. The first of these spacecraft, covering Europe, the Middle East, Africa and parts of Asia, is already operational and has been handling Inmarsat’s traditional voice and data traffic to land, maritime and air markets. The second Inmarsat 4 satellite was launched Nov. 9 to serve the Americas.

Conventional Inmarsat services on the second satellite will begin in January, and BGAN service is expected to start in March or April, according to Inmarsat.

The 14,000 advance BGAN terminal orders are from manufacturers Hughes Network Systems of the United States, Nera AS of Norway and Thrane & Thrane of Denmark, and are intended for delivery by June 2006.

BGAN can be operated in wireless mode with one or more mobile handsets linked to the terminal.

Inmarsat Chief Operating Officer Michael Butler said he would be surprised if Inmarsat did not reverse its voice-market decline once BGAN is rolled out. “Our service providers will be offering prices comparable to or lower than satellite telephone service and with a voice quality that is comparable to cellular,” Butler said.

The two Inmarsat 4 spacecraft together will cover 85 percent of the Earth’s land mass. A third satellite is being built as a ground spare by manufacturer EADS Astrium of Europe as part of the $1.5 billion Inmarsat 4 program that included the construction of three satellites and the launch of two. Inmarsat has signed 2007 launch options with International Launch Services of McLean, Va., and Sea Launch LLC of Long Beach, Calif., and is all but certain to exercise one of the options to orbit the satellite.

Sukawaty said the decision to launch will need to be justified by a specific business case — for example, a military user that wants full-globe BGAN coverage. He said launching and insuring the third Inmarsat 4 would cost up to $150 million, a figure he later conceded is higher than Inmarsat would ultimately be obliged to pay.

The successful launches of the first two Inmarsat 4 satellites frees up additional capacity on the Inmarsat 3-generation spacecraft and raises Inmarsat’s lease-revenue potential. Reorienting satellite antennae to serve a particular customer is a business that has been growing at 17 percent per year in the past five years.

Sukawaty said growth in the leasing business is expected to continue, but is difficult to forecast because customers, which are typically government civil or military agencies, do not book satellite capacity ahead of time as they do in the fixed-satellite services business.

“These customers need inventory to be there before they sign for the lease,” Sukawaty said. “We remain confident in the continuing growth we have seen historically.”

Inmarsat’s most recent large satellite-lease deal is a five-year contract with the Japanese Civil Aviation Bureau, signed earlier this year.

For the three months ending Sept. 30, Inmarsat reported revenues of $120 million, flat compared to a year earlier, with EBITDA — earnings before interest, taxes, depreciation and amortization — equivalent to 65 percent of revenues. The company reported a net loss of $27 million, including the effects of a $24.7 million dividend to shareholders paid during the quarter.

Land and maritime voice services revenue decreased, while maritime data revenues were up nearly 13 percent, to $42.5 million, compared to the same period a year earlier. Aeronautical services, the smallest of the three business sectors, increased by 33 percent, to $5.7 million, during the quarter.

Peter B. de Selding was the Paris bureau chief for SpaceNews.