Inmarsat plc may have raised the ante for mobile satellite services by launching land-based “broadband” voice and data service in the United States, close on the heels of launches in Europe and Asia.
The London-based MSS provider’s BGAN service, enabled by the launch of two next-generation satellites last year, initially is aimed at emergency workers and broadcast media, a segment it already serves. (BGAN stands for Broadband Global Area Network and its I-4 satellites are in geo-stationary orbit 22,000 miles above the Indian Ocean and North and South America.)
According to Inmarsat, the BGAN service provides data rates of 500 kilobits per second, enabling media customers to broadcast video in real time from remote areas, and helping aid workers who may need a similar service when responding to disasters. That’s the highest data rate in the MSS space, but far below wired broadband speeds.
The BGAN service will be accessible from five terminals made by Hughes Network Systems, Thrane & Thrane, Nera and Addvalue. Terminal costs vary from $1,500 to $3,500, according to John Warehand, public-relations manager for Inmarsat. Inmarsat wholesales the BGAN service, while in the U.S., Stratus, Telenor, MVS, British Telecom and France Telecom handle retail sales. Generally speaking, Warehand said, voice service costs less than $1 per minute and data costs range from $4 to $7 per megabyte, based on the type of terminal and speed of service selected.
“This positions us well against cellular roaming charges,” Warehand said.
Analysts note because Inmarsat’s BGAN service depends on terminals, which can be accessed by handsets, rather than the handheld phones offered by Globalstar Inc. and Iridium Satellite L.L.C., that competitive comparisons are difficult. “It’s an interesting marketplace,” said Andrea Maleter, technical director at Futron Corp., which focuses on the satellite industry. “There’s the regulatory side, the customer side, the technical side in terms of satellites as well as the different kinds of end-user equipment. Each one of those elements is a little different for each system and they all interact.”
According to the Satellite Industry Association, global MSS industry revenue reached nearly $2 billion in 2004. Figures for 2005 are expected to show 5- to 7-percent growth from 2004.
One big driver of the MSS space is the U.S. government, which according to Jose del Rosario, analyst with Northern Sky Research, prefers redundancy and is a likely customer for multiple MSS players. Globalstar noted last week that the Department of Defense has loosened rules for the DoD purchase of satellite communications gear for non-classified activities in the United States.
Whether the BGAN service takes off may depend on whether first responders really need data as well as voice, which typically is their primary need, Maleter said. Data use by first responders typically is secondary and responders can use lower data speeds. (Globalstar and Iridium both offer handheld devices with data rates of 9.6 kbps.)
“I think there’s plenty of market for all of them, at this stage, certainly,” Maleter said. “People now are piling into this space. ICO Communications has raised $650 million in private-equity funding and is building a satellite through a contract with Loral [Space and Communications] and has received spectrum from the [Federal Communications Commission]. [Mobile Satellite Ventures] is expanding their satellite constellation; they’ve been offering low-speed data only in North America. Globalstar has filed for permission to launch a geo-stationary orbit satellite over the U.S. for its next generation of services. Also, you have fixed satellite providers looking to go mobile. So how the market receives all these efforts is an open question.”
