Mobile voice and broadband-level data communications is about to become the focus of attention of a large number of satellite players. Once the near-exclusive preserve of Inmarsat of London, whose satellites use L-band frequencies, the market in recent years has seen the increased use of C- and Ku-band for television broadcasts and faster data links.
Inmarsat recently announced it was broadening its portfolio to build an all-Ka-band satellite network in an attempt to head off the emerging competition in Ku-band from major players including Intelsat and SES and the once-land-based operators of two-way corporate and government VSAT, or very small aperture terminal, data networks. Meanwhile, Iridium and Globalstar, which operate low-orbiting satellite constellations in L-band, are promising substantial increases in speed for their next-generation satellite systems.
Jonathan Weintraub, chief executive of MTN Satellite Communications, applauds the arrival of all these market participants.
Miramar, Fla.-based MTN has been providing satellite links to maritime customers since the 1980s. From its cruise- and ferry-based core business, it has expanded operations into corporate markets such as oil and gas exploration. More recently, the company created a division directly targeting the government market.
MTN owns and operates a teleport in Holmdel, N.J., and has access to seven other teleports. It leases capacity on more than 20 satellites and has a global C-band beam for maritime customers through leases of capacity on the NSS-9 and NSS-12 satellites owned by SES World Skies, and Intelsat’s IS-903 satellite.
Weintraub discussed his company’s strategy with Space News staff writer Peter B. de Selding.
What was your revenue for 2009 and how does 2010 look?
As a private company, we do not publish results. However, I can say that we are at more than $100 million a year in revenue with a growth rate of 15 percent a year over the last five years.
How is the company organized?
We have five business units. The largest by far is the cruise and ferry sector, delivering broadband voice and data connectivity for passengers and crew. That accounts for about two-thirds of our business. We also began delivering TV networks for cruise ships in March as part of an on-board entertainment package.
And the remaining revenues are split how?
Ten percent is for yachts. We serve more than 175 large luxury yachts, the 150-foot (45-meter)-plus category, where we are the market leader. Another 10 percent of the revenue is from commercial shipping and oilfield services. The remaining 10 percent is for government and military users, and nongovernmental organizations. Currently, we are working to enter the aviation market, which we see as a potential growth market.
Which business segment is growing fastest?
Our government and military sector. We recently announced a five-year, $50 million contract with DISA, the Defense Information Systems Agency. In 2009, we created a separate division, MTN Government Services, to appeal to this market. We see a lot of potential there. We also have a long partnership with the U.S. National Oceanic and Atmospheric Administration for which we supply 3- to 5-meter antennas across the fleet.
Is this business split relatively stable?
A few years ago we were maybe 95 percent cruise ships. That was our original business. While our cruise/ferry business continues to grow as we roll out new value-added services for our stable customer base, the other market sectors account for about one-third of the business.
Are most of your satellite services provided by C-band links, or by Ku-band?
For the moment it’s about 60 percent C-band and 40 percent Ku-band. Most of the cruise ships started in C-band, and some of them are now installing backup Ku-band antennas. Our yacht and military customers are also increasingly interested in Ku-band.
You are leasing some capacity from satellite fleet operators that are not among the least expensive. Do you have the advantage of multiple providers in most of your markets?
We look for low-cost bandwidth, of course. It is not always available, but we love inclined-orbit satellites, which are usually less expensive.
Are satellite bandwidth rates rising, falling or stable from where you sit?
There was a lot of pressure on rates a year or so ago in certain geographic pockets where we do business and where there are not a lot of beams available. For cruise ships, we have mainly leased global C-band beams.
Are these all short-term leases?
Some are and some are not. We occasionally enter into multiyear leases. There is a lot of growth in the regions we cover. Cruise ships now will cross the Atlantic at least twice a year. Yachts regularly tour the Caribbean; world cruises occur with some frequency.
Do the C-band beams handle your television broadcast service?
Yes, we beam seven or eight television channels on three global beams. Customers can buy one of multiple combinations of the programming. It really only makes sense if all the ships in a given cruise ship fleet are going to be using this. We have about 45 ships now using the service.
Is L-band still an option for your markets?
Not for cruise ships. There are few, if any, cruise ships left using L-band for communications. For yachts, which are smaller, L-band is still in use. You need a VSAT antenna of about 85 centimeters in diameter for Ku-band, and on some yachts there is a problem of space.
For commercial ships, the question becomes one of service price and of real estate — how much space they have on board for an antenna. Anybody using an Inmarsat [L-band] antenna obviously has to make trade-offs. Of course, some people will want the all-you-can-eat formula with multiple bands and pricing schemes.
Do you favor one technology or bandwidth over another?
No, we are bandwidth-agnostic. The idea is to find the best solution for customers. We don’t own the satellites, so we have no reason not to switch. And as for the ground hardware, we can switch as well. For instance we recently shifted to iDirect for part of our business. The point is that we generate revenue by matching capacity to our customers’ needs.
Part of your business is enabling cellular phone coverage on your customers’ ships. How does this work?
We provide cellular service at sea through Wireless Maritime Services (WMS), our joint venture with AT&T Mobility. When the ship is beyond the range of shore-side cell towers, mobile users aboard the ship can make and receive calls, which are patched through the ship’s on-board VSAT system. It is set up to be a typical roaming addition to your regular cell phone contract. Verizon, to take one example, offers this service at a charge of about $2.50 per minute.
Do you purchase satellite capacity only once you have an order, or do you purchase in advance, in bulk, to reduce per-megabit cost?
We buy ahead of the requirements, but we have a pretty good idea of where the requirements will be.
There has been an increased focus on Ka-band recently. How do you see that impacting your business?
We certainly are interested in these trends, and if there is a lot of new capacity pointed at the oceans then we would welcome it. There may be limitations to Ka-band as far as beam strength to some mobile users, but we’re looking forward to this. The fact is that all our customers want more bandwidth.
