Inmarsat Aims for Thuraya’s Markets in Africa and Asia

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  Space News Business

Inmarsat Aims for Thuraya’s Markets in Africa and Asia

By PETER B. de SELDING
Space News Staff Writer
posted: 17 October 2007
04:22 pm ET





LONDON —


Inmarsat is entering the hand-held satellite-telephone market by squarely targeting Thuraya Satellite Telecommunications of the United Arab Emirates




as the only competitor it




views as posing a long-term challenge, according to Inmarsat officials. According to Inmarsat officials the London-based firm is linking up




with its Middle Eastern and African distributors in hopes of upsetting Thuraya in its home market, and also with Asian partners in advance of Thuraya’s planned entry into that market early next year.

“There is a strong competitive threat from the Thuraya incumbency,” Inmarsat said in a Sept. 25 presentation to investors. “It’s the first time they’ve been challenged in their Middle East heartland. [It is a] good time to push back at their Asian roll-out.”



Thuraya, like Inmarsat, offers services that rely on




a large satellite in geostationary orbit. As of January, Thuraya had some 250,000 subscribers, or 34 percent of the 735,000 customers reported on the major mobile-satellite companies’ books. Thuraya’s leading market share was followed by Iridium Satellite




and Globalstar, which operate




low-orbiting satellite constellations;




each had a 27 percent market share.

Inmarsat’s
current mobile-telephone offering, the mini-M terminal, has




50,000 subscribers, or a 7 percent market share. Rounding out the global market are the




U.S.-Canadian Mobile Satellite Ventures company, with




3 percent, and Indonesia’s




Asia Cellular Satellite, with 1 percent,




according to Inmarsat.

Inmarsat
has long viewed Iridium and Globalstar as second-order threats because, in Inmarsat’s view, neither is likely to be able to fund a




second-generation constellation of satellites and update its phone offering without pricing itself far above Inmarsat or risking bankruptcy.

At the heart of Inmarsat’s analysis is the belief that the global market for satellite phones is not growing much and will reach no more than about 1 million subscribers in 2010. Wholesale airtime revenues for all satellite-phone providers, which Inmarsat estimates at $350 million in 2006, will be around $500 million in 2010, according to Inmarsat forecasts.



Globalstar
and Iridium officials dispute this




. Globalstar has contracted for the launch of its second-generation constellation, whose costs are estimated at about $1.2 billion. Iridium says its satellite fleet will remain healthy until 2014, when it will be replaced by a new constellation that Iridium estimates will cost about $2.6 billion. Both say they continue to add new subscribers in a growing global market.

Thuraya
now covers some 100 nations in the Middle East, Africa, Europe and Central and South Asia, and will expand into East Asia once its Thuraya-3 satellite is operational.

Thuraya-3’s launch, originally scheduled for last spring, has been delayed as Long Beach, Calif.-based Sea Launch Co. recovers from a January launch failure. Following a recent notice from Thuraya-3 builder Boeing Satellite Systems International calling for last-minute tests, Thuraya-3’s planned October launch by




Sea Launch has shifted into mid-November.

Inmarsat
is facing its own launch-delay issues for the third and last of its Inmarsat-4 spacecraft, which is bound for an orbital slot




over the Pacific Ocean. Once in operation, it will provide Inmarsat with global coverage for its telephone handsets by creating a seamless




link with the two other Inmarsat-4 satellites, which are in orbit.

Inmarsat
had a contract with Lockheed Martin to launch the Inmarsat-F3 satellite in mid-2009 on an Atlas 5 rocket but had hoped Lockheed Martin would be able to find an earlier slot on its manifest. Inmarsat first targeted 2007 for that launch, and later 2008.





Concerned that it was losing revenues from the U.S. Defense Department and other customers that wanted to use the Pacific Ocean satellite, Inmarsat recently switched gears, signing a




contract with International Launch Services for a Proton-M launch in March or April 2008.



The September Proton-M failure has grounded that




vehicle, however. It is uncertain whether the vehicle will return to normal operations in time to avoid months-long delays for all its customers, including Inmarsat.

Inmarsat
Chief Technology Officer Gene Jilg, in a presentation to the investor conference, said Inmarsat, which has retained the Lockheed Martin Atlas 5 reservation as a backup, paid a higher price for the Proton launch than it had for Atlas 5.



“The price premium relative to a launch in July 2009 is justified by the positive impact to Inmarsat’s core business and delivery of an earlier global [mobile broadband]




and voice service over Inmarsat-4,” Jilg said in his presentation.

Jilg
said the Proton launch cost to Inmarsat will decrease if the launch-services provider causes a schedule slip. He said the Russian government and industry bodies overseeing the Proton-M failure review have “a track record of efficient failure investigations,” and that Inmarsat remains confident in the vehicle despite the September mishap




.