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Inmarsat

Inmarsat preps new maritime product to fend off KVH competition

Rupert Pearce Inmarsat

WASHINGTON — Satellite operator Inmarsat said it will release a new maritime connectivity product around year’s end to stem the flow of customers to competitor KVH.

Rupert Pearce, Inmarsat’s CEO, said Nov. 8 that the company is taking steps to retain customers in its largest market segment, having identified broadband for social use among crews as the missing component of Inmarsat’s maritime service offering.

With the new product, called Crew Xpress, Pearce said Inmarsat is confident it will win the “fight for the hearts and minds” of its low-data-rate L-band customers as increasing numbers of them shift to higher data-rate connectivity using Very Small Aperture Terminals, or VSATs.

KVH has emerged as Inmarsat’s principal competitor in maritime VSAT connectivity, winning customers with a network built on capacity from Intelsat and Sky Perfect JSAT.

Pearce, in an earnings call, said Inmarsat continues to lose a larger than expected number of its L-band FleetBroadband customers to KVH and other VSAT competitors, but is “working extremely hard to address this competitive dynamic.”

Inmarsat’s third quarter maritime revenue decreased 5.7 percent to $135 million compared to the same period last year. Despite the loss, Inmarsat said its share of the maritime VSAT market has increased to around 25 percent, up from around 15 percent two years ago.

Pearce said customers across Inmarsat’s four markets — maritime, aviation, government and enterprise — are using the company’s satellites for an increasing level of mission-critical connectivity services. Maritime crew welfare doesn’t fall into that category, he said, but the changes underway provide an opportunity for Inmarsat to hone its Fleet Xpress products that support connectivity at sea with the company’s four Global Xpress Ka-band satellites.

“If you ask me whether I expect Fleet Xpress as it currently is today to be competitive in five years time if we do nothing, the answer is of course not,” he said. “I’d be delighted if my competitors disagree with me because I will eviscerate them in the market through improvements to Fleet Xpress. It’s a game in which we continue to have to invest.”

Inmarsat’s total revenue for the three months ended Sept. 30 grew by 3.7 percent to $369.3 million, with inflight connectivity and government services both increasing compared to the same time last year.

Aviation was Inmarsat’s fastest growing segment, increasing 34 percent year-over-year to $68.2 million for the quarter.

Pearce said Panasonic Avionics’ September agreement to use Inmarsat exclusively for Ka-band services validates Inmarsat’s use of those frequencies over the more commonly used Ku-band.

Pearce said the 10-year Panasonic Avionics partnership marked a sea-change in industry thinking, though competitors like Intelsat and SES, which provide substantial amounts of Ku-band capacity to Panasonic Avionics, Gogo and Global Eagle Entertainment, would likely disagree.

“You’ll see that the industry is beginning to realize that Ku-band does not cut it, that Ku-band cannot be something to rely on for future services for inflight connectivity, and that is going to cause people to take a pause and change their strategies,” he said.

Panasonic Avionics has customized Ku-band payloads on satellites operated by Intelsat, SES and Eutelsat, and has another under construction on Apsatcom’s Apstar-6D satellite that launches next year. The increasing prevalence of Ku- and Ka-band has led companies including Hughes, Gilat and Viasat to develop aviation antennas that support both frequencies.

Pearce said Inmarsat continues to see a market for L-band services despite the increased demand for satellite communications that can support higher speed services. One of those big opportunities is the Internet of Things, though it is too early to gauge revenue potential there, he said.

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Inmarsat battles to maintain leadership in connecting the high seas

Inmarsat's largest market, connecting ships at sea, is becoming increasingly competitive. Around 40 percent of the company's revenue comes from maritime customers using Inmarsat products for voice and data services. Credit: Inmarsat

In recent years Inmarsat has claimed a special middle ground in the satellite industry. While other satellite operators struggle with an overabundance of capacity, Inmarsat sees no such supply glut in its frequencies. And as fixed satellite services operators battle for television broadcast customers with streaming platforms such as Netflix, Inmarsat gets by scot-free, having no exposure to a market that often counts for half or more of other operators’ revenue.

But Inmarsat’s largest market, connecting ships at sea, is becoming increasingly competitive. Around 40 percent of the company’s revenue comes from maritime customers using Inmarsat products for voice and data services. Originally dominated by robust but low data rate L-band services (where Inmarsat competes with Iridium and to a lesser extent Thuraya), more satellite operators are wading into the maritime market with high-throughput satellites that offer higher speed services in other frequencies.

‘Not happy’

Inmarsat connects 34,500 vessels with “FleetBroadband,” its venerable L-band communications terminals. That number decreased by about 3,000 vessels from June 2017 to June 2018. Part of that decrease is from an intentional migration from FleetBroadband, an L-band service typically providing kilobits of throughput, to “Fleet Xpress” Inmarsat’s Very Small Aperture Terminal (VSAT) products that leverage its high-throughput, Ka-band Global Xpress satellites for megabit speeds.

But more than half the vessels that quit FleetBroadband “were lost as a result of scrappage and increased competition,” Inmarsat said during the company’s most recent earnings report.

Rupert Pearce, Inmarsat’s CEO, said the increased competition is coming “predominantly from KVH,” a Rhode Island company that launched a maritime-focused high-throughput satellite network late last year. KVH’s network is based largely on the Intelsat Epic constellation plus some capacity from Japanese operator Sky Perfect JSAT.

Inmarsat competitor KVH says it shipped nearly as many VSAT systems in the first half of 2018 as it did in all of 2017. The Rhode Island company's 8,000th VSAT shipped this summer. Credit: KVH
Inmarsat competitor KVH says it shipped nearly as many VSAT systems in the first half of 2018 as it did in all of 2017. The Rhode Island company’s 8,000th VSAT shipped this summer. Credit: KVH

“In other words, it is L-band versus Ku-band,” Pearce said. “It’s a low-end, highly stressed Kuband VSAT proposition that we compete against. [It’s] not particularly novel — KVH has been doing it for a long time — but it is intensifying, possibly because of the trade-up opportunity from FleetBroadband to VSAT.”

Inmarsat has slowed but not stopped the loss of customers to KVH Industries. Whereas around 520 vessels stopped using FleetBroadband during the fourth quarter of 2017, the company reported a loss of 350 ships from April to June. Pearce said most of the lost customers were low revenue generators, but that Inmarsat made a mistake in overlooking the rise of KVH and will redouble efforts to win maritime customers in both L-band and Ka-band.

“I’m not happy about the speed of our response to that,” Pearce said.

KVH’s banner year

KVH is a reseller L-band products from Inmarsat and Iridium, but markets its own Ku- and C-band VSAT products for vessel operators wanting higher speed connectivity. The company launched its HTS network last fall, incorporating IntelsatOne Flex, a service Mark Rasmussen, Intelsat’s vice president and general manager for mobility, describes as a “purpose-built global network designed from the ground up for maritime.”

IntelsatOne Flex connects all six Intelsat Epic HTS satellites as well as several wide-beam satellites to bring global C- and Ku-band coverage for capacity resellers like KVH, he said, The platform has more than 1,000 of the 7,500-plus vessels using Intelsat satellites, Rasmussen said.

KVH CEO Martin Kits van Heyningen said the company is hitting new milestones in VSAT shipments, customer bookings and service activations.

“We successfully shipped almost as many VSAT systems in the first six months of 2018 as we shipped in all of 2017,” Kits van Heyningen said during an August earnings call. “VSAT unit shipments were up 100 percent compared to last year’s second quarter, and were at an all time record by far compared to any quarter in our 10-year history in the maritime VSAT business.”

KVH, having overcome production issues, shipped its 8,000th VSAT in July. Kits van Heyningen said the company’s Agile subscription plans, which offer unlimited data at 10 megabits per second (Mbps) up and 3 Mbps down, free VSAT shipping and free installation (or a $2,000 credit per vessel), have surpassed the company’s projections.

“We expected AgilePlans to be successful, but the market response to demand has been even stronger than we anticipated,” he said.

“When you look at the results that KVH has achieved with our Flex network, they tell a very different story [than Pearce],” Rasmussen said.

Keeping the sails up

One of the main reasons vessel operators are migrating from low-data L-band products to high-throughput VSAT is a drop in price for both equipment and capacity, according to Susan Bull, a senior consultant at Comsys.

“Go back 10 years and the cost of a 1- or 1.2-meter stabilized antenna was in the region of $60,000,” Bull told SpaceNews. “Now it’s closer to $20,000.”

Satellite capacity prices have followed a similar trend. Bull said maritime capacity leases five to 10 years ago ranged between $5,000 and $8,000 a month, but as the number of VSATs grew and capacity supply increased, those prices halved to between $3,000 and $4,000 a month.

Maritime connectivity providers often sell Inmarsat solutions as well as, increasingly, VSAT products that leverage capacity from other satellite operators. Intelsat is selling capacity to several maritime connectivity providers, including Marlink, Speedcast and Navarino, marketing the size of its satellite fleet — around 50 compared to Inmarsat’s 13 — as a competitive advantage.

“Any region of the world is often served by more than just one satellite,” said Rasmussen. “It’s served by two, three and sometimes four different satellites, so any vessel anywhere has multiple places in the sky to look to get throughput on Intelsat One Flex maritime. This is key because if you only have one satellite to look at, and your mast or something else happens to be in the way, now your connectivity is gone and you have to go to your backup.”

“It’s a low-end, highly stressed Ku-band VSAT proposition that we compete against.” —Inmarsat CEO Rupert Pearce Credit: Kate Patterson for SpaceNews
“It’s a low-end, highly stressed Ku-band VSAT proposition that we compete against.”
—Inmarsat CEO Rupert Pearce
Credit: Kate Patterson for SpaceNews

Bull said the drop in capacity pricing around the world has sent satellite operators on a mad dash to find customers anywhere they can, and maritime is no exception.

“Inmarsat is having to rethink the ways that they are going, but it is a tough position to be in and try to find your way forward,” Bull said.

Rational paranoia

Pearce said Inmarsat will be “paranoid” going forward about “competition from below,” meaning companies like such as KVH going forward. He estimated that Inmarsat’s FleetBroadband is an effective product for around 60,000 vessels, consisting of a mix of merchant shipping, offshore fishing and leisure vessels. The less lucrative customers from those categories are defecting to competitors, he said.

In a statement to SpaceNews, Inmarsat said it still remains the leader of maritime connectivity globally.

“According to Euroconsult, we have around 85 percent market share of maritime L-band revenue and a 21 percent share of maritime VSAT revenue. We are also the fastest growing provider of maritime VSAT services with 57 percent of all new maritime VSAT deployments in [the first half of 2018] being Fleet Xpress, which has also been verified by Euroconsult.”

KVH, also citing Euroconsult, said in July that the Paris-based firm’s research found KVH had “nearly double” the number of fielded maritime VSATs as its next closest competitor at the end of 2017.

To reestablish itself against KVH and other competitors, Inmarsat is doubling FleetBroadband data rates via a firmware upgrade, Pearce said. And as the two next- generation Inmarsat-6 satellites near deployment — launch dates are 2020 and 2021 — Inmarsat will have the ability to drop FleetBroadband prices and further increase capabilities, he said. Under construction by Airbus Defence and Space, the satellites have both L- and high-throughput Ka-band payloads.

“That’s really about a battle for the hearts and minds of the mid-market, in terms of do they stay in FleetBroadband, do they migrate to VSAT, and if they migrate to VSAT, what VSAT do they migrate to?” Pearce said.

Pearce said Inmarsat also has to “leapfrog” its primary L-band competitor, Iridium, which is launching a new service called Certus based on the nearly finished Iridium Next constellation.

“In the original days, Inmarsat pretty much owned the L-band spectrum,” Bull said. “If you were a vessel, your only option was L-band, so Inmarsat was essentially the monopoly operator, and even when Iridium came in, they didn’t have a major impact on Inmarsat, but they’ve been refining their service. So has Thuraya. [Inmarsat’s] got more competition in the L-band arena today, especially with the latest Iridium series of satellites. The competition is rising.”

Kits van Heyningen said KVH anticipates using Iridium Certus as a backup to VSAT. Iridium OpenPort, the L-band product KVH uses today, is “long in the tooth and not very capable compared to what Inmarsat has,” he said. “This new Certus product should be better.”

As for VSAT demand, Kits van Heyningen projected more growth for KVH on the horizon.

“Despite increasing the pace of installations 40 percent compared to the first quarter, we still grew the backlog that we carried into Q3, which bodes well for future revenue growth,” he said.

The next move is Inmarsat’s to make.


This article originally appeared in the Aug. 27, 2018 issue of SpaceNews magazine.

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Inmarsat not for sale, CEO says

Rupert Pearce, CEO, Inmarsat. Credit: SpaceNews/Kate Patterson.

WASHINGTON — Inmarsat CEO Rupert Pearce said Thursday the two purchase offers Inmarsat received from EchoStar this summer priced the company too low to take seriously.

Despite signals of interest from satellite fleet operators EchoStar of Englewood, Colorado, and, briefly, Eutelsat of Paris, London-based Inmarsat does not consider itself on the market for others to buy, Pearce told investors.

“We are not for sale,” he said during an Aug. 2 earnings call. “We don’t feel weak about our future, and we don’t feel the need to engage in a merger even with somebody in our industry at this point in time.”

Pearce said Inmarsat put an end to EchoStar merger discussions, which took place in June and again in July, very early in order to assert the value of Inmarsat, whose revenues reached $717 million for the first half of the year, up 5 percent compared to 2017.

“If you engage at a level that is way below what you think is the right level, what you are doing is signalling weakness and a willingness to trade value below fair value,” he said. “That’s where you end up, and so it was absolutely the wrong signal to send.”

Satellite telecom companies anticipate consolidation could still happen between operators in order to slow an oversupply of satellite capacity that is driving transponder lease prices down. Some analysts believe Inmarsat’s spectrum assets make the company a significant acquisition target as well.

Pearce said Inmarsat is now beginning to actualize its growth plans with Global Xpress, its $1.6 billion four-satellite Ka-band network that was slowed by launch delays in 2014 and 2015. Global Xpress revenues reached $110 million for the first half of 2018, nearly doubling from the same time last year. Pearce said the pathway to $500 million in annual Global Xpress revenues by 2020 is now visible.

“We remain highly confident in our strategy and prospects on a standalone basis,” he said.

Bringing internet to aircraft is Inmarsat’s fastest growing business, increasing 38.8 percent to $115.5 million for the first six months of 2018. Pearce said more than 280 aircraft have Global Xpress antennas installed, and 50 have activated service. Inmarsat has more than 1,400 aircraft under contract for Global Xpress in-flight connectivity.

The majority of Inmarsat’s revenue comes from maritime customers, followed by government users. Pearce said he is hopeful Inmarsat’s European Aviation Network, comprised of an S-band satellite payload and a terrestrial network of 300 towers spread across Europe, will start service in the fall. The primary holdup for service activation, which was originally anticipated last year, is the readiness of the network’s inaugural customer, International Airlines Group, Pearce said.

Beyond the Global Xpress gambit

Pearce spoke broadly about Inmarsat’s next-generation satellite investments, saying future systems won’t look like the first Global Xpress system with a large upfront investment. Inmarsat’s focus now is on systems that can be built and implemented more quickly than traditional geostationary satellite programs.

“Unless we break the model of $1.5 billion investments every few years, we won’t be able to respond to customer demand in the right way at the right time,” he said.

In May, Pearce unveiled a program called “GX Flex” that would enhance the company’s L- and Ka-band satellite services, but gave few details beyond that it was in the Request for Information stage.

In an Aug. 2 earnings release, Inmarsat said it expects its capital expenditures to range between $500 million and $600 million annually for the next two and a half years, then to “meaningfully moderate after 2020 as we bring to bear our next-generation network augmentation plans.”

Pearce declined to give a long-term forecast for spending, saying that a schedule laid out even for five years could be too rigid for the pace of technology development and market evolutions.

“We are looking for levels of agility that allow us to deliver fully operational capabilities within two years from a decision to go live,” he said.

Pearce pointed to GX-5, a Ka-band satellite Thales Alenia Space is building ahead of a 2019 Ariane 5 launch, as indicative of future investment thinking. GX-5 has 60 times the capacity and costs “well over $100 million less” than the first-generation Global Xpress satellites from Boeing, he said.

“You can see the direction of travel and you can assume that that direction will continue,” he said.

Inmarsat has two other satellites, the Inmarsat-6s, under construction by Airbus Defence and Space. Those Ka- and L-band spacecraft are set to launch in 2020 and 2021, with the first booked on a Japanese H-2A rocket from Mitsubishi Heavy Industries.

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Inmarsat rejects second EchoStar merger proposal

Artist’s rendering of EchoStar’s Jupiter-2 satellite. Credit: SSL

WASHINGTON — U.S. fleet operator EchoStar on July 6 abandoned a $4.25 billion effort to buy Inmarsat after the British satellite operator rejected EchoStar’s second merger offer in less than a month.

Colorado-based EchoStar informed Inmarsat July 6 that it would not make another offer for the company, having revealed interest June 8 and again with another bid July 3, only to be rejected both times.

As with the first offer, the value of which was not disclosed, Inmarsat said EchoStar “very significantly undervalued Inmarsat and its standalone prospects.”

“The Board remains highly confident in the independent strategy and prospects of Inmarsat,” the company said in a July 6 statement.

EchoStar had until 12 p.m. Eastern (5:00 p.m. in London) Friday to make a firm offer or give up for now. British rules require EchoStar to wait at least six months before making another bid for Inmarsat.

Inmarsat operates a fleet of 13 satellites, providing L-band communications for maritime and aviation safety services and high-throughput Ka-band communications for broadband internet access.

EchoStar operates 18 satellites, and has roughly $3.3 billion in cash, making it one of the satellite operators most capable of merger and acquisition activity.

Spectrum Suspicions

Analysts have highlighted Inmarsat’s spectrum resources as the primary motivation for EchoStar’s bid, noting an absence of major synergies between the two companies that would normally motivate a merger.

“This is about a bigger game that Charlie Ergen is playing around spectrum,” Giles Thorne, an equity analyst at New York-based Jeffries Group, told SpaceNews.

Ergen chairs Dish Network and EchoStar and has amassed multiple swaths of spectrum in the United States. Inmarsat has a spectrum cooperation agreement with Ligado, formerly LightSquared, linking their L-band frequencies in a way that could be alluring to Ergen in order to protect the value of Dish’s frequencies.

Chris Quilty of Quilty Analytics made a similar prognosis, saying Inmarsat’s L-band spectrum is “undoubtedly the crown jewel being pursued by Charlie Ergen.”

Quilty traced the sinuous path between Dish, EchoStar, Inmarsat and Ligado in a July 2 research note:

“Inmarsat possesses a significant quantity of L-band spectrum, which could be extremely
valuable to Charlie Ergen, given his former ownership of wireless operator Ligado’s debt. Ligado, which holds a contract to use Inmarsat’s terrestrial U.S. L-band spectrum, previously fended off Ergen’s attempts to seize their spectrum rights in bankruptcy court. An acquisition of Inmarsat would give Ergen control over the spectrum, potentially shielding his other company, DISH Network, from the threat posed by the dumping of a large quantity of L-band spectrum into the U.S. marketplace.”

Without spectrum as a motivation, Thorne said there is little logic in combining the business of EchoStar and Inmarsat. Although both companies have Ka-band and S-band businesses, they have very little overlap in terms of products and customers, he said.

“Normally when you’re doing an M&A, you want one plus one to equal three, either by having revenue synergies around pricing or eliminating duplicate costs, or having more negotiating leverage around capital expenditure,” he said. “In the case of Inmarsat and EchoStar, the only synergy you would have is around capex.”

It is unlikely, according to Quilty, that other satellite operators will swoop in and create rival bids for Inmarsat. “We’re at a loss to identify any obvious other players with motivation to bid aggressively,” he wrote.

In between EchoStar’s two offers, French fleet operator Eutelsat admitted it was mulling a bid for Inmarsat, but said within 24 hours of that admission that it would not make an offer.

Most other prospective bidders are unlikely to find similar value in Inmarsat, and many are heavily invested in spending on their own next-generation satellite systems, Quilty wrote.

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Eutelsat says it’s weighing a bid for Inmarsat

by

Inmarsat HQInmarsat’s London headquarters. Credit: Inmarsat

WASHINGTON — Paris-based satellite fleet operator Eutelsat confirmed June 25 that it is considering making an offer to aquire Inmarsat.

Eutelsat’s disclosure comes less than three weeks after London-based Inmarsat rejected an unsolicited acquisition offer from EchoStar. On June 8, Inmarsat said EchoStar’s offer, which neither company quantified, “very significantly undervalued Inmarsat and its standalone prospects.”

“Eutelsat Communications S.A. (“Eutelsat”) notes the recent speculation and confirms that it is currently evaluating a possible offer for Inmarsat,” Eutelsat said in statement. “There can be no certainty any offer will be made, nor as to the terms of any offer.”

Eutelsat said it is required by law to announce by July 23 whether it intends to make an offer for Inmarsat. 

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Inmarsat rejects EchoStar takeover proposal

Inmarsat’s London headquarters. Credit: Inmarsat

WASHINGTON — British satellite operator Inmarsat rejected an acquisition offer from EchoStar Corp. of Englewood, Colorado, curbing hopes that consolidation could reduce an oversupply of satellite capacity.

Inmarsat said June 8 that EchoStar’s offer “very significantly undervalued Inmarsat and its standalone prospects.” The company did not disclose the size of the offer.

EchoStar, through its Hughes division, and Inmarsat both operate high-throughput Ka-band satellites for broadband services.

Flush with cash, EchoStar is viewed as a company with the financial muscle to create consolidation in the satellite communications sector, but whether EchoStar can negotiate agreeable terms is debatable.

“This is the fundamental problem and the reason why EchoStar is sitting on $3.3 billion in cash,” Chris Quilty of Quilty Analytics, told SpaceNews. “Although they are well funded to pursue acquisitions, they historically have been fairly cheap in what they’ve been willing to pay.”

Satellite capacity prices have dropped by 35 to 60 percent over the past two years, according to Northern Sky Research, with high-throughput satellites contributing to the decline.

In November, PJ Beylier, CEO of Speedcast, one of the largest buyers of non-broadcast satellite capacity, said satellite operators could stem oversupply — and by extension price erosion — by consolidating.

“They are all throwing the same [capital expenditure] at the same satellites over the same regions, and that’s driving oversupply more and more,” he said. “I think it’s time for the satellite operators industry to consolidate and I think it’s going to happen. You need one deal among the big seven large operators — Intelsat, SES, Eutelsat, Telesat, Inmarsat, Viasat, EchoStar — you need one deal to happen between two of them and I think things will accelerate quite quickly.”

Of those seven, EchoStar appeared the most likely actor. Intelsat is struggling to pay down $14.5 billion in debt, SES bought O3b Networks in 2016 for $730 million, Eutelsat is in the middle of a three-year reduced capex plan, Telesat is trying to fund a low Earth orbit constellation and Viasat is spending significant resources on its ViaSat-3 geostationary satellites. Inmarsat mulled an acquisition of fellow British operator Avanti last year, but did not make an offer.

Inmarsat said its board of directors “remains highly confident in the independent strategy and prospects of Inmarsat.”

EchoStar did not immediately respond to SpaceNews inquiries by press time.

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Arabsat Falcon Heavy mission slated for December-January timeframe

SpaceX’s inaugural Falcon Heavy lifts off Feb. 6. carrying a Tesla roadster. Credit: SpaceX

WASHINGTON — SpaceX’s first Falcon Heavy launch with a commercial satellite is scheduled to occur around the end of the year, according to customer Arabsat.

The Riyadh, Saudi Arabia-based satellite operator told SpaceNews by email that the launch window for Arabsat 6A is between December and January.

SpaceX has one Falcon Heavy launch scheduled ahead of Arabsat-6A — the U.S. Air Force’s STP-2 technology demonstration mission.

An Air Force Space Command spokesperson told SpaceNews the STP-2 mission is currently scheduled for October. STP-2 was previously up for launch this month, but slipped “due to ongoing SpaceX qualification testing and engineering review by both SpaceX and the Air Force,” the spokesperson said.

Following STP-2 and Arabsat-6A, it is unclear when the next Falcon Heavy mission will occur. SpaceX still counts fleet operators Intelsat, Viasat and Inmarsat as Falcon Heavy customers, but none have assigned spacecraft to the rocket.

Viasat’s ViaSat-2 and Inmarsat’s European Aviation Network satellite — both originally slated for 2016 Falcon Heavy launches — launched on Arianespace Ariane 5 rockets last June. The operators switched launch providers as Falcon Heavy delays mounted.

Inmarsat spokesperson Jonathan Sinnatt said the London-based satellite operator still has an option for a Falcon Heavy launch.

Intelsat, SpaceX’s earliest Falcon Heavy customer, also has a launch option dating back to 2012, but no concrete details such as payload or date.

“We still have the Falcon Heavy agreement but no satellite has been assigned to the vehicle,” Intelsat spokesperson Jason Bates said.

Carlsbad, California-based Viasat, in response to SpaceNews inquiries, gave no firm commitment of a Falcon Heavy launch, though the company is still listed on the SpaceX manifest.

“Viasat had a launch contract on the Falcon Heavy for the ViaSat-2 satellite launch,” Viasat said in a statement. “We continue to talk with SpaceX as well as other launch providers for our future launches. As deals are solidified with our launch providers – we’ll update the market.”

SpaceX launched its first Falcon Heavy in February on a demonstration mission carrying a red Tesla roadster.

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Iridium breaks Inmarsat monopoly on maritime safety communications

Iridium can now compete more directly with Inmarsat in maritime connectivity after gaining GMDSS certification from the International Maritime Organization. Credit: Iridium

This story was updated May 22.

WASHINGTON — The UN certified Iridium Communications to provide Global Maritime Distress Safety System (GMDSS) services, ending Inmarsat’s monopoly on the internationally required service for ships, Iridium said May 21.

The certification, granted by the UN’s International Maritime Organization, marks the culmination of a five-year effort that occasionally turned nasty between fleet operators Iridium and Inmarsat.

Iridium began pursuing the certification in 2013, at the time expecting completion in two years. Rupert Pearce, CEO of London-based Inmarsat, lambasted the effort in 2014, claiming Iridium-supported GMDSS services would put lives at risk. Backed by the United Kingdom, Inmarsat sought that year to upend McLean, Virginia-based Iridium’s application, which was backed by the United States.

Iridium has since largely replaced its first-generation constellation, with all 66 operational Iridium Next satellites expected to be in service by year’s end.

In a May 21 statement, Iridium hailed the International Maritime Organization’s decision, saying the newly granted certification “ends a decades-long satellite industry monopoly” by Inmarsat.

“This is a historic moment for the maritime industry and an honor for Iridium to be the second ever recognized provider for GMDSS services,” Bryan Hartin, Iridium’s executive vice president, said in a statement.

Inmarsat announced May 22 that it received certification for its new Fleet Safety service, which provides the mandatory maritime safety service and broadband data services through a single Inmarsat-provided terminal.

“Fleet Safety is the most significant advance in maritime safety services since the introduction of GMDSS in 1999 and restates our commitment to maintaining and improving safety services for the maritime industry,” Inmarsat Martime President Ronald Spithout said in a statement.

Iridium and Inmarsat could soon be joined by the Beidou Navigation Satellite System’s Chinese operator, which is seeking GMDSS certification from the International Maritime Organization.

Natasha Brown, a spokeswoman for the International Maritime Organization, said via email May 22 that the Beidou application was being considered by the Maritime Safety Committee during a 10-day meeting in London that ends May 25. Brown said there has been “no objection in principle to the application” but did not say when a decision would be reached.

GMDSS provides emergency communications at sea, relaying messages even if crew are unable to call for help. The International Convention of the Safety of Life at Sea treaty requires ships of 300 gross tonnage or more have GMDSS equipment onboard for international trips. Inmarsat had been the sole provider of GMDSS equipment since 1999.

GMDSS does not generate service revenue for Inmarsat but does drive equipment sales. Iridium’s  certification by the International Maritime Organization gives the mobile satellites services company an opportunity to market GMDSS compliant hardware and services.

“While this development is not expected to be a major driver of revenue by itself, the recognition should allow Iridium to compete more fully within the maritime space, and importantly against Inmarsat for a slice of the roughly $600 [million] maritime broadband business,” Raymond James analyst Ric Prentiss wrote in a May 22 research note.

Iridium said it expects to begin GMDSS service in 2020. The International Mobile Satellite Organization will monitor Iridium’s GMDSS implementation, Iridium said. A public service agreement between Iridium and organization will likely mark the start of service, Iridium said.

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Eutelsat takes French telecom regulator to court over Inmarsat’s EAN license

France’s Council of State, the nation’s highest administrative jurisdiction and final arbiter of cases relating to executive power, local authorities, independent public authorities, public administration agencies or any other agency invested with public authority. Credit: Council of State

WASHINGTON — Continuing its country-by-country fight against Inmarsat’s European Aviation Network, French satellite fleet operator Eutelsat is returning to its home country regulator to challenge Inmarsat’s recently granted authorization.

Eutelsat on April 25 initiated proceedings with France’s Conseil d’État (Council of State), the nation’s highest court focused on government policies, to contest French telecom regulator Arcep’s authorization of Inmarsat’s ground-based antennas for inflight connectivity.

“Eutelsat contests the legality of this decision both in terms of substance and form,” spokeswoman Marie-Sophie Ecuer told SpaceNews in an April 26 statement. “Eutelsat firmly believes that the public interest is not served by this decision since the service offered by Inmarsat to airlines in no way contributes to combat the digital divide in France or more broadly in Europe. Yet this was the regulatory goal underpinning the decision to grant the license to Inmarsat.”

Arcep approved Inmarsat’s European Aviation Network in February, allowing the hybrid system of satellite and cellular connectivity to provide internet access to aircraft flying over France. Inmarsat, with partner Deutsche Telekom of Germany, finished installing the network’s 300 LTE towers across all 28 European Union member states plus Switzerland and Norway earlier this year. EAN uses those towers along with an S-band satellite called Inmarsat S EAN launched last June to deliver 75 Mbps connections to aircraft.

Eutelsat and Carlsbad, California-based Viasat have each challenged Inmarsat’s use of a license from the European Commission — the executive arm of the European Union — claiming that Inmarsat is using a mobile satellite services (MSS) license for a system that is predominantly cellular in nature. Having been unsuccessful in persuading the European Commission, Eutelsat and Viasat have instead gone nation to nation to disrupt EAN.

In March, Viasat won a solo effort in Belgium to overturn Inmarsat’s EAN license granted by the nation’s telecom regulator IBPT.

That ruling, Ecuer said, “confirms our interpretation of European regulations.”

Inmarsat has downplayed Eutelsat’s and Viasat’s opposition as a last-ditch effort to discredit a system with widespread European regulatory approval.

“Inmarsat is delivering the EAN system in accordance with the MSS S-band framework established by the European Institutions and implemented by the national regulatory authorities,” Inmarsat said in an April 26 statement to SpaceNews. “We consider the action being taken by Eutelsat to be entirely without merit.”

“Inmarsat maintains that these claims are intended solely to undermine our legitimate business interests, while strengthening their own competitive position in the tendering processes that are currently underway with European airlines.

“EAN is ready for commercial service with both the satellite and complementary ground network fully tested,” the company added.

Viasat and Eutelsat are partners on inflight connectivity. Viasat is a 49-percent owner of Eutelsat’s Ka-Sat broadband satellite over Europe, and Viasat’s ViaSat-2 satellite has coverage that extends from North America to Europe for unbroken coverage of popular North Atlantic transcontinental flight paths.

Viasat and Eutelsat’s partnership is less robust than it was in the past, however. Three weeks ago, Eutelsat chose to forgo an investment in a powerful 1-terabit satellite Viasat planned for Europe, the Middle East and Africa, and instead purchased its own 500-Gbps satellite from Thales Alenia Space with a focus exclusively on Europe.

Ecuer declined to comment on whether Viasat is involved in Eutelsat’s Arcep legal battle. Viasat spokeswoman Chris Phillips did not respond by press time to SpaceNews inquiries.

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Belgian court punches hole in Inmarsat’s European Aviation Network

One of Inmarsat and Deutsche Telekom’s LTE towers for the European Aviation Network. Credit: Inmarsat

WASHINGTON — A Belgian court revoked approval for Inmarsat’s European Aviation Network in the country after fleet operator Viasat challenged the legality of its authorization.

The Market Court of the Brussels Court of Appeal on March 14 said it has annulled the Belgian Institute for Postal services and Telecommunications (BIPT) approval of Inmarsat’s use of terrestrial towers for the network, designed to provide Wi-Fi inflight for aircraft over Europe. The reversal threatens to rip a hole, albeit a small one, in the network Inmarsat completed just last month.

Inmarsat’s European Aviation Network, or EAN, consists of an S-band satellite payload launched last June and a “complementary ground component,” or CGC, of 300 cellular towers built across 28 European Union member states plus Switzerland and Norway by partner Deutsche Telekom. Six CGC towers cover Belgium.

The court wrote March 14 that it “Annuls the decision of the Council of BIPT of 29 June 2016 ‘concerning Inmarsat Ventures Ltd’s rights to use complementary ground components.’”

Carlsbad, California-based Viasat and Paris-based fleet operator Eutelsat have challenged Inmarsat’s use of a European Commission S-band spectrum license, arguing that what should be a predominantly satellite system supported by ground towers is in fact the opposite — a terrestrial connectivity system that uses a satellite component to justify its existence. Inmarsat disagrees. 

Seeking to upend Inmarsat’s network, Viasat and Eutelsat have chosen to fight on a country-by-country basis, blotting out patches of the EAN where nations side with their reasoning.

Viasat led the legal challenge alone in Belgium. In a March 20 statement provided to SpaceNews, the company praised Belgium’s decision.

“This ruling adds another major connectivity dead-zone to the EAN in a highly-trafficked EU air corridor, as the Irish regulator, ComReg, has publicly stated an investigation of the EAN is ongoing and has yet to issue a CGC license to Inmarsat,” Viasat said. “We applaud Belgium and those Member States that have taken a rational look at the legality of the EAN. Upholding the law is critical to maintaining fairness and ensuring robust competition that will result in the best possible consumer experience.”

Eutelsat, though not involved in the Belgium case, told SpaceNews the decision “confirms our understanding that the service must be predominantly delivered through a satellite component.”

“We have always considered that the EAN does not fulfill the conditions of a mobile satellite system as defined by European regulations and that decision confirms our analysis,” Eutelsat said.

Inmarsat hasn’t yet begun service with EAN, which has London-based International Airlines Group, owner of British Airways, Iberia, Aer Lingus and Vueling, as its inaugural customer. Inmarsat told SpaceNews March 21 that the EAN remains on track, and it doesn’t view the Belgian court’s decision as a showstopper.

“The decision by the Belgian judge was made purely on procedural grounds,” Inmarsat said. “It was due to the Belgian regulator not confirming in its decision that the complementary ground network complies with certain conditions within the EC framework.

“The complementary ground network does comply with these conditions and this has been confirmed by other regulators including Ofcom in the UK and [Autorité de Régulation des Communications Électroniques et des Postes] in France.

“We are confident that the regulator will address the procedural issues raised and will expedite the reissuance of the authorisation.”

Inmarsat plans to begin service with the EAN during the first half of this year.

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Inmarsat, Deutsche Telekom complete European Aviation Network

Inmarsat and Deutsche Telekom’s European Aviation Network covers Europe using 300 towers and an S-band satellite. Credit: Deutsche Telekom.

WASHINGTON — British satellite operator Inmarsat and mobile network operator Deutsche Telekom have finished building the ground infrastructure for the hybrid satellite and cellular European Aviation Network (EAN).

The companies announced Feb. 5 that the network’s 300 LTE towers are set up across the 28 European Union member states, along with Switzerland and Norway, forming the air-to-ground half of the pan-European inflight entertainment and connectivity network. That ground network pairs with an S-band satellite called Inmarsat S EAN, which launched in June on an Ariane 5 rocket.

Built by Thales Alenia Space, Inmarsat S EAN is a “condosat,” sharing a spacecraft bus with Greek operator Hellas Sat’s Ku- and Ka-band Hellas Sat-3 payload. The satellite has been operational since September.

Inmarsat and Deutsche Telekom said EAN service is scheduled to start during the first half of this year, a delay from previous schedules that anticipated a service start during the second half of last year. Inmarsat attributed the later-than-expected service start on having to switch launch vehicles for the condosat from SpaceX’s Falcon Heavy to Arianespace’s Ariane 5 after Falcon Heavy fell behind schedule.

Inmarsat had also encountered legal opposition from competitors Eutelsat of France and ViaSat of California, both of which object to Inmarsat’s use of an S-band spectrum license from the European Commission for the EAN service. Inmarsat has sought to downplay ViaSat and Eutelsat’s opposition as an eleventh-hour publicity stunt.

EAN can provide internet connections to aircraft with data rates above 75 Mbps, and latency below 100 milliseconds.

London-based International Airlines Group, owner of British Airways, Iberia, Aer Lingus and Vueling, is EAN’s first customer, and is currently installing antennas for the service on aircraft. EAN’s builders say installations can generally be performed during overnight breaks, enabling fleet-wide deployments within months.

“With the completion of the first ever integrated pan-European LTE ground network component we are now able to fully support EAN’s satellite connectivity and maximize the performance of the EAN system,” said Rolf Nafziger, Deutsche Telekom’s senior vice president of international wholesale business. “The network is specifically designed to meet future capacity demands for connectivity in the European airspace, with passenger volumes expected to double in the next 15 years.”

Inmarsat and Deutsche Telekom say the network can be scaled up to meet future connectivity demand as needed.

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Op-ed | Paving a clear “Path” to interoperable SATCOM

U.S. soldiers set up a tactical satellite communications system in Afghanistan. Credit: U.S. Army/ Sgt. Russell Gilchrest

It’s time to allow trusted commercial operators to help government benefit from improved satellite operations

These are times when the only thing we can predict is unpredictability. From geopolitical threats to natural disasters – events emerge swiftly and unexpectedly, anywhere around the globe.

This event-driven reality provides an even more insistent imperative that U.S. government and military users must stand ready to deploy “anytime, anywhere.” They must have access to resilient, robust and secure satellite communications (SATCOM) wherever they are, at a moment’s notice, across the full spectrum of engagement. And, of course, this must be tempered with real expectations of cost-effectiveness and enhanced combat readiness delivered with agility.

There is a path to this state of SATCOM and, in fact, it exists. But, as with a lost hiker in the woods, the path is not quite clear to federal agency procurement officials or acquisition authorities. Following this analogy, for the hiker, fallen branches and other debris can block or hide the path, or a storm may wash away parts of it. Or perhaps, the painted markings on trees designating the trail suddenly stop appearing, and hikers find themselves lost.

Historically, the government has perceived commercial SATCOM (COMSATCOM) as a gap filler, or simply a surge service to fill in for unavailable military capabilities. And yet, even in the U.S., approximately 73 percent of all SATCOM is provided by commercial providers, as reported by the Army’s own Wideband Consolidated SATCOM System Expert just last year. Other allied and coalition nations have similar or even greater percentages of COMSATCOM use. So it is not surprising that governments have become increasingly reliant on COMSATCOM to support ongoing critical military operations and responses to catastrophes. With military and defense operations in the Middle East and elsewhere in the world, there remains a state of highly mobile, asymmetrical engagement. Coupled with the ever-advancing technological innovation in the SATCOM industry, we continue to see a surge in the use of, and even greater dependence upon, COMSATCOM.

For federal users, however, the path to optimal SATCOM has been muddled by piecemeal and antiquated military procurement practices, further complicated by budget and cultural impediments.

The “debris” of the government acquisition system means that multiple U.S. Department of Defense (DoD) branches are responsible for multiple parts of the package, turning to private industry generally on an “as needed” basis. The Navy supplies narrowband space segment, or Mobile User Objective System (MUOS). The Air Force supplies the wideband “space” part, i.e., the Wideband Global Satcom (WGS) – originally as a Wideband Gapfiller Satellite system. The Army provides the “land” part, i.e., both military-owned and commercial terminals for units, while the Defense Information Systems Agency is the storefront for commercial SATCOM. In each case, despite the maturity of commercial communications, there remains a disconnect where the focus is on use of spectrum: leasing MHz versus looking at the more relevant effects that SATCOM enables and leveraging SATCOM as a Service as a force multiplier, critical infrastructure and thus an operational imperative.

The fragmentation and overlap in space acquisition management and oversight have contributed to program delays and cancellations, cost increases and inefficient operations, with the terminal segment lagging far behind. Most of those programs began before some of today’s concepts of operations – such as airborne Intelligence, Surveillance and Reconnaissance (ISR) – were even envisioned. As a result, there are programs like MUOS where only the legacy UHF capability is accessible. And even the wideband workhorse for the U.S. government and its allies, the WGS system with its nine satellites on orbit, cannot flexibly meet all operational requirements. What’s more, in some geographies, there is often competing demand for WGS access for military mission-specific priorities.

Bottom line, this all brings a burden to the end user, who is not getting the needed mission-critical capability quickly and effectively.

At the “pointy end of the spear” or in the foxhole, users do not care about which branch of the military “owns” which part of the communication architecture, or whether the actual technology is supplied by a government or commercial provider. They only want results, in the form of maximum capability, flexibility and resilience. Simplicity is required, and SATCOM needs to be readily accessible wherever they go, with smaller, easy-to-use equipment and multiband, multimode terminals to ensure connectivity is fully mission capable regardless of how challenging the situational or geographic conditions, or priority of the mission.

This speaks to the urgency for a more agile, unified strategy to ensure the availability of reliable, resilient and seamless state-of-the-art SATCOM capabilities, which are fully interoperable with agency-owned systems. Taking an entirely integrated architecture approach that considers military SATCOM (MILSATCOM) and COMSATCOM as a holistic capability and that allows for rapid and cost-effective innovation relevant to government’s ever-changing needs, this strategy would inspire “order-of-magnitude” improvements in SATCOM capabilities.

Fortunately, while still obscured, the path for the government is getting clearer, as events over the past year and beyond have demonstrated.

Moving forward

We have witnessed 2017 bringing significant developments as the commercial sector and government leaders have worked together to create a more protected and resilient space environment that will improve capabilities for our servicemen and women. Throughout this collaboration, greater support has emerged for the development of an integrated SATCOM architecture and strategy in the interest of rapid and cost-effective innovation and greater resilience and frequency diversity.

The official launch in January 2017 of a wideband Analysis of Alternatives (AoA) stands as a promising example of this trend. Through the AoA, leadership intends to build the next generation of infrastructure for the future wideband communication system to replace the dated WGS program. Currently underway, it provides an opportunity to define, arguably for the first time, a new approach that harnesses the scale, scope and innovation of COMSATCOM. A Commercial Working Group has formed to gather perspectives and input from industry leaders about the best ways to move forward. Our top executives work with their government counterparts to develop a “blueprint” to take the best of what industry has to offer – space, air and ground layer communication capabilities and ongoing innovations – and seamlessly integrate these capabilities into the future DoD architecture.

Furthermore, the Fiscal Year 2018 National Defense Authorization Act, which has been passed by both the House and the Senate and sent to the president’s desk for signature, marks the first step toward a crucial space reorganization and leadership shift presenting a clear opportunity for COMSATCOM to become an integral part of the SATCOM architecture.

When we look at these developments as a collective whole, we can see that government leadership clearly recognizes that the desired integrated architecture depends upon the reach, resilience and technology modernization of COMSATCOM, as an essential element of mission assurance. Importantly, this is supported by evolving policies and a strategy that drives satellite communication acquisition away from a piecemeal and antiquated procurement model.

Path found: SATCOM as a Service

All of these positive dynamics come together enabling government to opt for newer business models, such as SATCOM as a Service, a readily available capability that comprehensively addresses the aforementioned needs for interoperability, efficiency, ease of use and responsiveness to the DoD requirements. Mobile government users are increasingly adopting this managed service model, seeking access to rapid, reliable, worldwide SATCOM wideband capability. This contrasts with historicaly leased satellite services, which require setting up fixed systems, one-by-one, every time a new network is required. To do that, government contractors must set up their own hubs at ground stations throughout the world, wire together their own network and create their own systems. SATCOM as a Service is an end-to-end model that provides wideband/fixed satellite services globally without the time and expense of building and maintaining a private network.

From a user’s perspective, SATCOM as a Service establishes a mobile wideband experience that is no different from moving around the globe with a cellphone, without stopping to worry about where the cellphone towers are, who installed them and who wired everything together. SATCOM as a Service allows users to travel anywhere in the world with one-touch access. They never have to make a new investment whenever they set up a new SATCOM network – and it relieves the burden to manage these networks from end users, allowing them to fully focus on their mission.

SATCOM as a Service is a cost-efficient model in which users only pay to access the capability they need. A subscription or managed service, it delivers guaranteed data rates to satisfy mission needs at a moment’s notice, worldwide. With solid service-level agreements and committed information rates, users get what they ask for and only use it when they must, and the quality of the acquired service is assured. In other words, no more guessing games or overleasing and underleasing.

Rapid augmentation in narrowband

Industry brings new advancements in critical technologies, such as narrowband to support the high-throughput requirements of users. Inmarsat and its partners are deploying Wideband Streaming L-band (WiSL), an innovative connectivity service suited to specific government needs, further augmenting MILSATCOM resources and enhancing operations. It is a capability utilizing Inmarsat’s reliable, worldwide L-band space and ground network, with higher throughputs from miniature form factor antennas to meet high-demand ISR and Process, Exploitation, Dissemination (PED) needs. WiSL is now flying on aircrafts, rapidly transforming from an idea to a new capability: During recent demonstrations in multiple user scenarios, it delivered data rates as high as 10Mbps x 10Mbps, via micro antennas as small as a 13 centimeters. Using high-order modulation, the demonstrations revealed efficiencies up to 4.5 bits per hertz for cost-efficient bandwidth utilization.

In addition, L-band Tactical Satellite (L-TAC) stands as another example of technology innovation built to mobile users requirements. It is a highly resilient, “UHF-like” tactical narrowband satellite capability for robust, low-cost, beyond-line-of-sight mobile communications when UHF is not available for existing radios. Via tactical radios, which are either portable or installed in vehicles, helicopters, ships and other mobile platforms, users acquire UHF tactical functionality that is extremely suitable for beyond-line-of-sight, push-to-talk networks, through which users in various coverage areas share access to transmit a signal that can be heard by everyone else in the network (just like a telephone conference call). The service is also designed for point-to-point data communications between terminals in theater. L-TAC is made possible by narrow spot beams, with satellites supporting about 200 such beams. With this, L-TAC extends capability over the satellites when UHF capacity is absent. The result: low-risk, resilient and easy-to-use connectivity which is accessible regardless of the local infrastructure, weather or terrain.

Unified SATCOM architecture

So, like the hiker in the woods who navigates past the debris to discover a distinct, well-laid path, the government-industry partnership brings much promise to steer agencies to a state of ready and responsive deployment of the most efficient, affordable, capable and interoperable SATCOM. Through this path forward, government users will greatly benefit from a completely integrated SATCOM architecture in which trusted commercial operators lead real innovation, empowering the DoD to consider MILSATCOM and COMSATCOM as a holistic capability to best support military missions.

The path exists and is available – now. And it is our duty to work together as industry and government leaders to forge ahead on it in the interest of achieving critical objectives and supporting the men and women who have dedicated their lives to these critical missions.

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Orbcomm says remaining OG2 satellites are stable, inthinc acquisition boosting revenue

Eleven OG2 satellites at Sierra Nevada Corp.’s Colorado facility. Credit: Sierra Nevada Corp.

WASHINGTON — A communications glitch affecting three of Orbcomm’s second-generation satellites does not appear to afflict the other dozen spacecraft in the recently deployed constellation.

Rochelle Park, N.J.-based Orbcomm incurred a $31 million impairment charge on the three OG2 satellites, though recovery teams are still searching for a means to recover them, Orbcomm CEO Marc Eisenberg said Nov. 2.

Speaking to investors during a morning conference call, Eisenberg said the 12 functioning OG2 satellites provide enough resiliency so that machine-to-machine and Internet of Things service revenue remain unimpaired while the company investigates what caused loss of contact with the other three.

“We have not found a systemic flaw in the OG2 constellation, and we are not experiencing issues on the other OG2 spacecraft. Our team was able to narrow down these anomalies to the two most likely causes, and have developed comprehensive operational procedures and are implementing software enhancements to mitigate these issues from reoccurring,” he said.

Eisenberg said Orbcomm and the contractor team that built OG2 discovered bouts of flash memory corruption happening once every couple of months. If that memory is corrupted at a specific location “it could lead to a loss of contact.”

Sierra Nevada Corp. built the OG2 constellation, with payloads supplied by Boeing.

Fixing the memory corruption and rebooting the spacecraft typically resolved the issue, Eisenberg said, but straining payloads from the rebooting process became a second probable cause.

“We are also focused on the payload part stresses,” he explained. “There is a possibility that the payload was — that the repower cycling would create part stresses, so we implemented new procedures to power cycling when we reboot to reduce the potential part stress.”

No additional spacecraft have malfunctioned, Eisenberg said.

Inmarsat’s orbital reinforcements

Rather than immediately draft plans for a third-generation gapfiller, coined OG3, Eisenberg said Orbcomm is investing in products that leverage both its constellation and that of British mobile satellite services operator Inmarsat. Similar to smartphones roaming between carriers, customers will be able to switch between Orbcomm’s low-Earth orbit network and Inmarsat’s L-band geostationary satellites when needed.

Eisenberg said the first dual-mode chipsets to enable use of both constellations should be ready in the second half of 2018. Orbcomm customers will gain faster service with Inmarsat since they won’t need to wait for a LEO satellite to pass over their location — a delay that can take several minutes — while Inmarsat customers gain improved coverage in places that lack direct line of sight to a geostationary satellite.

Inmarsat invited Orbcomm to collaborate on protocols for the sixth-generation I-6 satellites under construction by Airbus Defence and Space, he said. The two I-6 satellites are being built with L- and Ka-band payloads, and the first is scheduled to launch in 2020 on a Japanese H2-A rocket. Eisenberg said those satellites have operational life expectancies of around 20 years, about five years longer than a traditional geostationary satellite.

Orbcomm’s current fleet consists of 12 second generation and 17 remaining first generation satellites, Eisenberg said. OG2 satellites are six times as powerful as the first generation, which is losing numbers as they exhaust their fuel supply.

Orbcomm’s OG2 constellation would have been 18 satellites were it not for five satellite anomalies and one lost in an underperformed SpaceX Falcon 9 launch. Eisenberg said Orbcomm has lots of choices if the operator chooses to proceed with an OG3 gapfiller.

“If we see a need where we need to launch more satellites to replenish this constellation, it’s not another $200 million — maybe we do another four to six and it’s $40 million or $30 million. We are working through what the next generation can do and we’re watching really closely how these fixes have worked on the current OG2 spacecraft. So far, knock on wood, everything is going well,” he said.

M&A boosting revenue, but done buying for now

Orbcomm revenues grew by 50 percent year over year to $69.4 million, and subscriber numbers rose by more than 70,000 for the three months ending Sept. 30, bringing total subscribers to 1.9 million, a year over year increase of 12.5 percent. The operator reported a net loss of $39.7 million to common stockholders during the quarter, largely because of the OG2 impairment charge.

Eisenberg said the June acquisition of vehicle telematics and driver safety products company inthinc is already starting to bear fruit. He said inthinc broke even for earnings before interest, taxes, depreciation and amortization during the quarter — which was sooner than expected.

“From a service revenue perspective, one inthinc sub has the same economics as eight to 10 cargo deployments,” he said, adding that 5,000 inthinc subscribers should have the same effect as up to 40,000 to 50,000 cargo assets.

Blue Tree Systems, an Irish transportation management solutions company acquired in October, hasn’t contributed to revenue yet, but Eisenberg said the purchase boosts Orbcomm’s strength in Europe, the Middle East and Africa. The addition folds in about 37,000 new subscribers and more than 300 customers from around the world, he said. Eisenberg said Blue Tree in 2017 is about a $20 million business with a 70-30 mix of hardware to service revenue.

Orbcomm has been very active in merger and acquisition activity, purchasing one or more companies every year for the past few years. Eisenberg said Orbcomm doesn’t plan any additional acquisitions in the coming months.

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Inmarsat taps Arianespace for fifth Global Xpress launch

Arianespace’s VA238 launch June 28 of Inmarsat/Hellas Sat’s condosat Inmarsat-S EAN/Hellas Sat-3, and ISRO’s GSAT-17 satellite. Credit: Arianespace.

WASHINGTON — British satellite operator Inmarsat will launch its next Global Xpress satellite on an Ariane 5 rocket from Arianespace, the companies announced today.

The mission, slated for the second half of 2019, follows four other Global Xpress satellites, the first three of which launched on International Launch Services Proton rockets, followed by the fourth on a SpaceX Falcon 9. Global Xpress is Inmarsat’ Ka-band high-throughput constellation, operating in geosynchronous orbit.

Though the first Global Xpress to launch with Arianespace, GX-5 is Inmarsat’s tenth launch contract with the European launch provider. Inmarsat’s latest satellite, the European Aviation Network spacecraft, launched June 28 on an Ariane 5.

Inmarsat describes Global Xpress-5, or GX-5, as a “very high throughput satellite” more than 36 times as powerful as one of the already-launched Boeing-built GX satellites.

Thales Alenia Space is building the 4,000 kilogram GX-5 satellite on an upgraded Spacebus 4000 B2 platform with a payload of 72 Ka-band beams and a design life of 16 years. The satellite will cover the Middle East, Europe and India.

Rupert Pearce, CEO of Inmarsat, said in August that GX-5 would offer “beyond-ViaSat-3-like economics.” ViaSat says each ViaSat-3 satellite will have a terabit of total capacity.

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