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INMARSAT RESTRUCTURES FOR COMMERCIAL AGILITY

Proposed changes in the structure of Inmarsat will make the organization more “commercially agile,” according to Inmarsat Director General Warren Grace.

The International Mobile Satellite Organization is making moves to privatize its operation, in response to complaints from private satellite companies that Inmarsat is a protected, international monopoly.

Inmarsat was formed in the late 1970s by international agreement to provide communication for the worldwide maritime industry. All 79 nations involved have their own signatory satellite company that provides the earth stations and Inmarsat service. Comsat Corp. of Bethesda, Md., is the U.S. signatory, sanctioned by the U.S. government.

Inmarsat signatories are immune to anti-trust and other legal actions.

As the satellite industry has matured, private Low Earth Orbit carriers have launched service and an abundance of commercial applications have evolved.

Several years ago, Inmarsat renamed its Inmarsat-P operation ICO and spun it off to compete with the LEOs. But there’s a competitive catch, according to Peter Hadinger, director of telecom policy for TRW.

The signatories in each country have invested in Inmarsat and are considered its owners. Indirectly, then, they are owners of ICO.

“Inmarsat signatories are primarily the monopoly telephone companies, which are usually in a position to influence whether market access is provided to Big LEOs,” he said. “Which means they can have influence for gaining market access for ICO.”

Afraid they would be shut out of markets, TRW and four other LEO companies created an action group, the Alliance for Competitive International Satellite Service.

Inmarsat seeks to become a nationally-registered limited liability company, and will take these proposals before the organization in October: Provide a much more flexible investment structure for current investors and potential shareholders. Speed the decision-making process through a commercial fiduciary board. Eliminate perceived intergovernmental organization privileges not available to competing companies.

The LEO alliance would like to see Inmarsat go further: Inmarsat should sever all ties to ICO. Inmarsat’s assets should be put up for public offering. Inmarsat’s privileges and immunities should be eliminated.

Inmarsat would like to maintain a small intergovernmental organization that would oversee the company’s public service obligations, namely the Global Maritime Distress and Safety System.

The alliance suggests no one company be given GMDSS authority, but that guidelines be established for any LEO to meet that qualification.

“They should not use that GMDSS as a reason to have any remaining anything,” Hadinger said. “We don’t see it as unreasonable for the governments of the world to have satellite service provided by anyone that can do it.”

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