Chief executive of Inmarsat, Andrew Sukawaty has been waiting for an event that may never happen.
Harbinger Capital said in July of 2008 it was considering a bid for Inmarsat. Harbinger currently owns 28% in Inmarsat. Harbinger also owns SkyTerra and holds a stake in TerreStar which are two upcoming satellite communications systems. TerreStar has recently launched its own satellite that has successfully deployed.
Harbinger has recently announced it plans to build a costly next generation wireless network across the U.S., which shows they may not bid on Inmarsat.
A takeover bid is not welcomed by the Inmarsat management, which plans to launch its first hand held satellite phone in June.
Inmarsat was founded by the UN in 1979 to establish a satellite communications network over the oceans. Inmarsat went private in 1999.
Mr. Sukawaty has been successful in keeping the sales growth to an average of 20% over the last five years. Half of Inmarsat revenue is through the shipping industry. Inmarsat also provides broadband service to the military and aircraft.
The launch of a hand held satellite will open a new market for Inmarsat. They are targeting maritime, aero, and government customers. The satellite phone market is worth about $360m. Inmarsat’s goal is to take 10% of that in two years.
Inmarsat will be facing greater competition from Globalstar, which is launching a replacement constellation in September of 2010. Globalstar’s constellation will be low earth orbiting (LEO), which will be closer to the earth then Inmarsat geosynchronous satellites. This will give Globalstar and advantage of clearer and cheaper calls. Iridium plans to also replace their (LEO) constellation, but has not received financing for the project.
One important plus Inmarsat has is they own a potentially valuable spectrum. Even though Harbinger may never make a bid they will pay Inmarsat a $336m lump sum and $115m a year to rearrange spectrum between the two.
In Europe Inmarsat owns rare S-band spectrum over all twenty-seven European states. This S-bend is right next to 3G, which the mobile operators use. If the mobile operators start to run out of capacity as 3G usage grows they may look to Inmarsat for help.
Back to Satellite Phone News
Back to Satellite Phones