Inmarsat Adds FleetBroadband Subscribers Despite Price Increases

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PARIS — Mobile satellite services provider Inmarsat on Nov. 5 offered what it said is fresh evidence that its price increases for maritime customers have not eroded the popularity of the company’s product line, notably its FleetBroadband service.

London-based Inmarsat, which is positioning itself to do battle with large satellite fleet operators such as Intelsat that are offering Ku-band broadband service to Inmarsat’s core maritime market, said the L-band FleetBroadband service is more than holding its own.

In a conference call with investors, Inmarsat officials said FleetBroadband subscriptions increased by 2,128 in the three months ending Sept. 30 and totaled more than 32,000.

Inmarsat’s total maritime data revenue was up 26 percent, to $85.4 million, a consequence of the price increases and the larger subscriber base, Inmarsat Chief Executive Rupert Pearce said during the conference call.

Maritime voice revenue, by contrast, dropped 9 percent, to $19.6 million, as Inmarsat customers moved toward voice over Internet Protocol and emailing instead of voice calls.

Inmarsat has warned investors in recent months to expect a temporary dip in some maritime revenue sectors as subscribers exchange higher-cost legacy Inmarsat gear for the lower-cost FleetBroadband. Once they get used to the new service, Inmarsat has said, the trend will reverse and revenue growth will ensue.

The spearhead of Inmarsat’s attempt to fend off encroachment on its maritime market by Ku-band satellite fleets and small Ku-band shipboard antennas is Global Xpress, three Ka-band satellites scheduled for launch in 2014 and 2015.

To entice customers before Global Xpress is operational, Inmarsat is offering ship owners its XpressLink service, in which they begin using other operators’ Ku-band satellite capacity but agree to transition to Global Xpress once it is available.

Pearce said that including Ship Equip, a company providing Ku-band service that Inmarsat now owns, Inmarsat had 1,150 ships using Ku-band broadband as of Sept. 30, and 250 more in backlog. He said XpressLink had booked more than 250 ships as customers so far.

These ships also use Inmarsat’s L-band service, but much of the Ku-band broadband revenue they generate ends up not at Inmarsat but at the satellite fleet operator providing the Ku-band bandwidth.

Inmarsat’s land-mobile market has suffered along with other mobile satellite service providers’ owing to the reducing of U.S. and allied troops in Afghanistan. Inmarsat estimates that Afghanistan business accounts for between $14 million and $19 million of annual revenue, some of that being for aviation services.

Inmarsat has not had in the past year a one-time boost in usage from an event like the war in Libya, which Pearce said boosted Inmarsat’s third-quarter 2011 revenue by $8.1 million.

No such event has occurred recently, and Pearce said Hurricane Sandy, which caused heavy damage in the New York area and downed terrestrial wireless networks in several U.S. states, will not be a notable source of revenue.

Inmarsat’s ISatPhone Pro satellite handset added 6,000 new subscribers in the three months ending Sept. 30, bringing the total subscriber base to 71,000. Pearce said monthly subscriber revenue is heading up but he did not provide figures.

Inmarsat competitor Iridium Communications of McLean, Va., has said its own higher-priced satellite phone will win more support from retail distributors because it offers distributors a higher profit margin. Iridium has said it recently agreed to increase its monthly service charges in part because Inmarsat increased the price of its phone.

For the three months ending Sept. 20, Inmarsat reported revenue of $325.9 million, down 10.5 percent from the same period a year ago. The decline is mainly due to a suspension of payments from LightSquared, a U.S. company trying to deploy a satellite-terrestrial mobile broadband network that had been paying Inmarsat for access to L-band radio spectrum.

Inmarsat combines LightSquared revenue with other revenue sources, making comparisons difficult. But stripping out LightSquared and “other income” from both quarterly periods results in a 4.9 percent increase in total revenue.

For Inmarsat’s core mobile satellite services business, revenue increased by 3.3 percent, to $186.7 million.