PARIS — Mobile Satellite Ventures (MSV) is urging U.S. regulators to reject a request from competitor Inmarsat to restrict MSV’s use of ground-based power boosters for its next-generation mobile satellite service.
MSV President Carson Agnew said Inmarsat’s claims that MSV’s plans will render Inmarsat’s future services unusable are no more than an attempt to block a competitor from entering the market.
The FCC has granted MSV’s request to install ground-based repeaters, subject to certain limits to assure that services like Inmarsat’s — which have priority in the use of the L-band spectrum MSV plans to use — are not crippled.
Inmarsat has asked the FCC to amend its Nov. 8 decision to issue an operating license issued to MSV.
In a Jan. 4 interview, Agnew said Inmarsat’s appeal to the U.S. Federal Communications Commission (FCC) has no evidence to back up the allegation that the ground-based repeaters, called ancillary terrestrial components, will disrupt Inmarsat’s future mobile satellite data-transmission service, scheduled to enter service in 2006. The first of two planned Inmarsat satellites for this service is scheduled for launch in March.
In the interview and in a Dec. 23 filing to the FCC, Agnew and MSV argued that a high-priced mobile terminal like Inmarsat’s stands no chance of finding a market in the urban areas where MSV plans to locate most of its ground repeaters. These repeaters, like those used by satellite-radio companies, help assure signal continuity even in areas where buildings, bridges and other structures block a satellite’s direct view of users’ mobile antennas.
Reston, Va.-based MSV currently operates two satellites for mobile telephone and tracking services in the United States and Canada. To seal the business case for a more-powerful, second-generation system, MSV needs FCC approval for ground repeaters capable of emitting a certain signal strength. Without such approval, the company says it will not be able to generate a customer base large enough to permit low-cost mass production of its terminals.
MSV currently has about 100,000 customers for its service and in November raised some $230 million in equity financing from its existing investors, including Telesat Canada. That is a far cry from the estimated $900 million needed to launch the second-generation service, and MSV has yet to demonstrate its ability to raise that kind of money.
Agnew agreed, but said the equity funding raised in November “has cleared our decks in the sense that we are now debt-free and positioned to be able to raise additional funding.”
Inmarsat Ventures Chief Executive Officer Andrew Sukawaty has challenged MSV on financial-credibility grounds — he doubts whether MSV can raise the necessary capital — and on the technical interference issue.
Sukawaty, pointing to London-based Inmarsat’s contracts with the New York City Fire Department and other urban public-safety organizations, said Inmarsat’s future mobile-broadband service is counting on urban users in its business plan.
If Inmarsat terminals cannot operate within a 200-meter radius of MSV’s ground repeaters, Sukawaty said, Inmarsat’s ability to operate in the United States will be open to question. The company is spending some $1.5 billion on its fourth-generation satellites.
MSV’s response is two-part. First, Agnew said, urban dwellers in 2006 will have too many less-expensive alternatives available to them to want to use Inmarsat terminals in these areas. Second, he said Inmarsat and all satellite system operators need to follow the example of mobile-telephone and terrestrial mobile-data systems in making their terminals powerful enough to operate in signal-dense environments.
“There are many ways they could do this,” Agnew said. “After all, we can all use our cell phones even if we are standing directly under a competing cellular operator’s base station. My feeling is that Inmarsat is just interested in delaying our service.”