Inmarsat unveils satellite phone plan

Satellite communications provider Inmarsat has announced plans to offer its first global mobile satellite phone service. The firm has collaborated with ACeS, one of the world’s largest satellite phone operators, to offer low-cost hand-held and fixed voice services.

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By  Melissa Hancock Published  September 17, 2006

Satellite communications provider Inmarsat has announced plans to offer its first global mobile satellite phone service. The firm has collaborated with ACeS, one of the world’s largest satellite phone operators, to offer low-cost hand-held and fixed voice services. The services will initially be rolled out in the Asian market, with extended coverage - including the Middle East - expected in early 2007, through the combination of satellite resources. Inmarsat are assuming responsibility for satellite and network operations and wholesale provision of the existing ACeS service. They are also taking responsibility for ‘product and service development’, which will mean that new Inmarsat-branded products will be released onto the market. “This collaboration with ACeS accelerates our entry into the hand-held market. Leveraging our Inmarsat-4 satellites and network of distribution partners, we expect to roll out a global Inmarsat hand-held service within two years,” commented Michael Butler, COO for Inmarsat. Inmarsat plans to expand geographic coverage for the R190, the existing hand-held satellite phone, in early 2007 using the Inmarsat–4 satellite covering Asia. Inmarsat operates a constellation of 11 geostationary satellites but it is the advanced capability of its Inmarsat-4 satellites that extend the boundaries of 3G networks to areas with unreliable, insecure or non-existent telecoms infrastructures. In the first half of 2007, Inmarsat will launch a company-branded phone in the Middle East which will be refined over the R190. The Middle East is currently Inmarsat’s most valuable market. As Samer Halawi, Inmarsat’s Regional Director told Arabian Business: “A large portion of our overall traffic comes from this region. We make more money per square kilometre of coverage here than anywhere else in the world. We are very committed to the Middle East which is why it was the first region to receive our BGAN (Broadband Global Area Network) service launched in December 2005.” BGAN is the world’s first mobile communications service to offer broadband data speeds of up to 492kbps delivered to a range of portable devices. The company also plans to launch a third Inmarsat-4 satellite in late 2007 in order to achieve their goal of releasing an Inmarsat global hand-held phone within two years. Each satellite costs US$250m to make and US$130m to US$150m to launch. Inmarsat have said the reason they haven’t introduced the hand-held phone before is because they were concentrating on data provision and waiting to launch the third Inmarsat-4 satellite. Butler said that they need three satellites to provide complete coverage and to ensure a strong enough signal for the hand-held satellite phone. The third satellite will enable a hand-held satellite phone 36, 000 km away to pick up the signal. Butler also observed that the hand-held satellite phones would be more cost-effective than roaming on a cellular phone or using hotel phones when abroad. Aside from enabling globalisation of the hand-held service, Inmarsat is confident that launching the third satellite will also provide incremental opportunities for new broadband maritime and aeronautical services to be launched, as well as extending BGAN-based services to a global platform. The BGAN service currently delivers seamless broadband coverage across 85% of the earth’s land mass. In connection with the globalisation of the hand-held service, Inmarsat expects to incur capital expenditures of approximately US$40m to US$45m over two years. Inmarsat believes the global hand-held market is worth approximately US$350 m today in wholesale revenues, and is growing. Following the introduction of a global hand-held service, Inmarsat expects to target a market share of at least 10% by 2010. Butler observed: “Through our Inmarsat-4 satellite fleet, we will be the only provider today offering continuity of service on a global basis through the end of the next decade.”

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