Inmarsat to See New Sales from Global GX Launch – Satellite Today

I-5 F3 GX

I-5 F3 Rendered Image. Photo: Inmarsat

[Via Satellite 09-10-2015] With the successful launch of Inmarsat-5 F3 (I-5 F3), the third satellite in the Global Xpress (GX) constellation, Inmarsat is looking to trigger global service by the end of this year. After two Proton failures pushed back I-5 F3 back by almost a year, the operator is finally ready to expand business big time.

“The launch of Inmarsat-5 F3 is very significant as it completes our constellation of three satellites required for global coverage,” Inmarsat Chief Technical Officer Michele Franci told Via Satellite. “The Global Xpress constellation will offer a host of new opportunities for both our existing and new customers to significantly enhance their connectivity capabilities and to deploy bandwidth-hungry applications and solutions efficiently and effectively, even in the remotest and most inaccessible parts of the world. Global Xpress is, therefore, an important enabler for continued growth in global mobile broadband — it is the ‘Internet of Everywhere’.”

In the next few weeks, the Inmarsat operations team will focus on raising I-5 F3 to its final orbit, deploying its solar arrays and reflectors, and conducting payload testing. After that, the satellite will be ready to join the first two GX satellites — Inmarsat-5 F1 launched in December 2013 and Inmarsat-5 F2 launched in February.

The operator is looking to enter the satellite into commercial service by the end of 2015, and with global service expected by the year’s end, Inmarsat may see a jump in business due to the expanded service offerings.

“Increasing use of [Very Small Aperture Terminals] VSAT in the maritime and aeronautical sectors has been holding back Inmarsat’s L-band revenue growth. Now global GX coverage is available, Inmarsat can compete fully with VSAT providers, and this should enable Inmarsat to grow its revenues more quickly than in the last few years,” explained Tim Farrar, president of Telecom, Media and Finance (TMF) Associates, a consulting and research firm that focuses on the telecom and satellite sectors.

Franci believes the latest milestone will offer major growth opportunities. And while the operator has seen notable interest from government, stitching together the full GX footprint will be key to expanding in verticals such as aviation, which require global coverage before the service can be fully deployed.

“GX will be particularly important to boosting growth in maritime, aeronautical and the portable broadband (BGAN) markets. GX is also well suited for government users, but the question of budget availability makes the size of this incremental opportunity uncertain,” said Farrar.

According to Farrar, Inmarsat has laid out goals based on the accelerated growth GX will likely afford. The operator projects to grow satellite revenues at a pace of 8 to 12 percent per annum, something he believes it may find challenging. In the long term, Franci reiterated Inmarsat’s expectation of incremental revenues reaching a minimum of $500 million within five years of activating global services — by 2020 — through the new opportunities that the GX constellation will uncover. This is a scrutinized goal, however.

“This is an ambitious target, and its achievability depends on how Inmarsat counts these incremental revenues. Is it a wholesale satellite airtime target, or does it include retail sales and/or equipment? Inmarsat hasn’t fully clarified this issue and so it is hard to forecast exactly how well it will do,” said Farrar.

Despite debates surrounding profitability, the launch of GX will likely offer a significant impact to the market.

“We now have the prospect of intense head-to-head competition between Inmarsat and the major [Fixed Satellite Service] FSS operators, in particular Inmarsat and SES, who both have global Ku-band oceanic coverage and HTS plans,” said Farrar. “This will be a significant change for the industry and for Inmarsat itself, which has been largely unchallenged in much of the L-band market.”

The post Inmarsat to See New Sales from Global GX Launch appeared first on Via Satellite.

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