Inmarsat Will Wait for Proton To Launch Its Next Satellite

 

PARIS — Mobile satellite services provider Inmarsat believes that Russia’s Proton-M rocket will return to flight in time to launch the third and last of the Inmarsat 4 satellites this year, Inmarsat officials said. The satellite is needed to give the company global coverage of its new broadband and hand-held telephone services.

 

With commercial launch manifests worldwide now full, London-based Inmarsat has little choice but to wait for Proton to return to service following the March 15 failure of its upper stage, industry officials said.

 

In a May 8 conference call with investors, Inmarsat Chief Executive Andy Sukawaty said that while no launch date could be set yet, Inmarsat has “no reason to expect a protracted delay” in the launch of Inmarsat 4 F3.

 

Expected to weigh nearly 6,000 kilograms at launch, the Inmarsat satellite would require the Proton vehicle’s Breeze-M upper stage to perform the same kind of long, continuous ignition that appears to have been the cause of the March 15 failure, which occurred when a gas duct in the Breeze-M stage ruptured 32 minutes into an ignition sequence designed to last more than 34 minutes.

 

Inmarsat spokesman Chris McLaughlin said May 9 that Inmarsat officials are in Moscow taking part in a failure review and are cautiously optimistic about a launch well before the end of the year. Inmarsat is deploying broadband communications gear for land, aeronautical and maritime customers worldwide and needs the third Inmarsat 4 satellite to fill in the currently large gap over the Pacific Ocean region.

 

The satellite had been scheduled for launch in late April. A return-to-flight schedule for Proton is not expected until late May or June.

 

Inmarsat reported May 7 that revenue for the three months ending March 31 was $147.9 million, a 5 percent increase over the same period a year earlier. Inmarsat Chief Financial Officer Rick Medlock said Inmarsat is sticking with its forecast of average annual revenue growth rates of 6 percent to 8 percent through 2010.

 

Medlock said Inmarsat often sees quarterly movements outside the normal growth trend. The company expects to return to higher growth later this year, he said.

 

Sukawaty said the recent move by telecommunications operators Sprint and Clearwire to renew their WiMax partnership to deploy a high-speed network in the United States is a positive sign for mobile satellite services companies seeking partners to deploy similar networks.

 

Inmarsat and Mobile Satellite Ventures (MSV) of Reston, Va., have agreed on an L-band spectrum-sharing agreement that both companies say should make their combined spectrum capacity an attractive partner for building a broadband wireless network in the United States.

 

MSV has two large satellites under construction at Boeing Satellite Systems International and scheduled for launch in 2009 and 2010.

 

But like several other mobile satellite companies, including Globalstar, TerreStar and ICO Global, MSV has been unable to find a partner willing to invest in the elaborate Ancillary Terrestrial Component ground network needed to permit seamless coverage for a hybrid satellite-terrestrial service in the United States. A full Ancillary Terrestrial Componentnetwork in the United States “could be a multibillion-dollar undertaking,” MSV said in a May 6 filing to the U.S. Securities and Exchange Commission (SEC) through MSV owner SkyTerra Communications.

 

In a May 6 conference call and in the SEC filing, MSV officials said their agreement with Inmarsat – which calls for a $250 million payment to Inmarsat – does not require any payment by MSV until September 2011. It is at that time the Inmarsat partnership takes effect, and triggers payments from MSV.

 

MSV Chief Financial Officer Scott Macleod said MSV will not take the steps needed to start the bandwidth-sharing arrangement with Inmarsat until September 2011 or until the arrival of a strategic partner willing to help finance MSV’s system – whichever comes first.

 

In the SEC filing made by SkyTerra Communications, the company said it had $260.6 million in cash and other liquid investments as of March 31 and would need about $188 million this year to pay Boeing and its other contractors, and to service its debt.

 

Macleod said MSV has enough cash to continue operations through early 2009 and is reviewing its options for stretching out contractor payments and securing strategic and financial partners. It needs to raise an additional $350 million to $400 million to operate the business through the launch of the first satellite, the company said in its SEC filing.