BGAN begins

Inmarsat has been moving commercial services to its new regional I-4 satellite since June 2005, and has now launched Broadband Global Area Network (BGAN) services in the Middle East, providing both simultaneous voice and data to a laptop sized terminal. CEO Andrew Sukawaty tells CommsMEA what made the company look to the Middle East market first.

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By  Tawanda Chihota Published  January 12, 2006

|~|Sukawaty200.jpg|~|Inmarsat CEO Andrew Sukawaty says 15,000 orders have already been placed for BGAN terminals.|~|“It was a pragmatic decision to come to launch in the Middle East first,” says Inmarsat's CEO Andrew Sukawaty. “We do more business per square kilometre in the Middle East than anywhere else in the world. So for our existing business, we can say there’s a good opportunity here.” Inmarsat's first I-4 satellite, which was launched in March, serves Asia, the Middle East, Africa and Europe. “But actual on-the-ground launches are happening first in the Middle East, because of the extensive network of regional distributors who are already selling our services,” explains Sukawaty, adding that with the addition of the second satellite covering the Americas launched in November 2005, BGAN will cover 98% of the world’s population. Both satellites have a lifespan of around 14 years. Commercial services began moving onto the first I-4 in June 2005, migrating existing services such as the regional BGAN, launched in 2002. The new BGAN ups the offerings from regional BGAN, a purely data service with speeds up to 144kbps, to simultaneous voice and data at up to half a megabit per second. Like previous BGAN offerings, Sukawaty believes demand will mainly constitute governmental, UN and aid organisations, but will also come from the oil and gas industry and media. “This is a government service first and foremost, serving highly critical applications where terrestrial services don't or can’t go.” Terminals from two manufacturers, Nera, and Thrane & Thrane, are available in the region now. Products from Hughes and Addvalue will be ready in March 2006, with official pricing for the four between US$1500 and US$3500. “Terminals have already arrived at distributors, and there have been 15,000 ordered for delivery for six months globally. This is a huge number,” says Sukawaty. Inmarsat’s 3Q results for to end-September 2005 showed just over 200,000 active terminals across its maritime, land and aeronautical businesses. “We sell purely wholesale, so you have to go to one of our distribution partners or service providers.” Inmarsat has a global network of 440 selling agents in 180 countries. “Agents activate the terminal, connect it to our system, bill the customer, and provide first-line customer service.” The company has given a guidance global tariff of US$1 per minute for landline phone calls and US$5-7 per MB of data, with distributor mark-up included. ||**|||~||~||~|Resellers have been anticipating BGAN’s arrival since the company made its first successful voice call over the service in May 2005. Stratos Global, the world’s largest provider of Inmarsat mobile satellite services announced in November that it was taking orders from distribution partners and customers. Stratos is currently in the process of buying another BGAN distributor, Xantic, a move that will hand the company a sizeable share of Inmarsat’s global market and give it access to Xantic’s business in the maritime and carrier sectors. Sukawaty admits that it is often the distributors who are responsible for pushing Inmarsat into new markets. “When they want to get into an area, we work hand in hand with them in getting a licence so that they can work through the regulator.” Samar Halawi, Inmarsat’s regional manager, explains that the relationship with the partners is two-way. “On the one hand they come to us with new requirements, on the other hand when we have new features on a product, we go out there and have specialised people who study how we can fit in to those different markets. Once we have a good proposition, we work with our partners and take it to that market.” Originally created 26 years ago by the UN to serve the maritime industry, Inmarsat launched a successful IPO in June 2005, raising US$669 million and placing a value on the company of US$2.4 billion. ||**||

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