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 Head to Head
5 October 2007 | IPTV
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Stretching Satellite
Inmarsat is pushing the boundaries of commercial satellite services and Michael Butler, President and COO, says that there's more to come in this exclusive interview

  Michael Butler
Satellite is increasing its market penetration and user awareness at what services it can offer is rising concordantly. Inmarsat has been at the forefront of this trend by delivering innovative solutions and products that focus on the benefits and user experience rather than the technology behind it. But with the vulnerability of cable networks having been highlighted by the recent spate of earthquake disruption in the Pacific, the reliability of satellite is becoming an equally valuable advantage and one that Michael Butler, President and COO of Inmarsat, is keen to highlight.

Inmarsat is moving ever deeper into the mobile communications sector, particularly with its mobile broadband service BGAN and its support for in-flight GSM calls. Does this reflect a growing recognition that satellite communications have a greater role to play in the broader sector?

Satellite communications are defined by whether they are accessed through mobile devices or through a fixed facility. Inmarsat has always been a mobile satellite services provider, meeting the mobile communications needs of people at sea, on land or in the air. Typically, our services are used when the terrestrial networks are unreliable or insecure, or in the many places around the world that are not covered by networks. News crews reporting from remote areas, for instance, or relief agencies working in a disaster zone, rely on satellite communications to provide their essential voice and data connectivity.

Our position within the broader sector is therefore one of extending the reach of terrestrial networks. Users demand ever-increasing levels of connectivity, and they now expect it in places that are beyond the reach of other networks. Our Broadband Global Area Network (BGAN) service can deliver unprecedented voice and data connectivity to virtually anywhere in the world: voice at cellphone quality and data speeds of up to half-a-megabit per second, accessible through laptop-sized devices. It offers a powerful combination of functionality and form, and is attracting attention from within the broader sector as a viable augmentation to ground-based mobile services.

Similarly, our capability to provide aeronautical connectivity is forming the basis of solutions that deliver in-flight connectivity to airlines. Once the airlines receive the necessary regulatory approval, the Inmarsat network can be used to deliver voice, SMS and emails to passengers at 30,000 feet. It is another example of where we are taking communications into new places and environments.

Inmarsat provides the technology that is behind some of the recent announcements from airlines, like Ryanair and Emirates, that they’re offering an inflight cellphone service. Was the technology designed from the ground up or was it based on existing products and knowledge?

We have been providing communications services to the aeronautical markets for many years, and our services are an essential part of the safety communications available to aircraft. That heritage has given us a strong presence in the government and corporate jet market, and our services are installed on most long-haul aircraft.

The solutions to deliver in-flight mobile telephony for passengers, which are currently awaiting regulatory approval, are based on both current Inmarsat aeronautical services, which are installed on many aircraft already, and also our forthcoming service, SwiftBroadband. They use picocell technology to connect the mobile telephones in a cabin to the Inmarsat service installed on the aircraft.

Inmarsat has said that it will launch a new handheld satellite phone in the third quarter of 2007. Why is Inmarsat now choosing to enter this established market, and why now?

It is an established and healthy sector: its current estimated market value is US$350 million in wholesale revenues, and that is predicted to grow to US$500 million by 2010. It feels good to arrive fourth or fifth into the market; it has given us the opportunity to observe the market closely, learn from the incumbents’ successes and failures, and speak to handheld customers about what they need from the service. Thanks to the strength and diversity of our channel partners, we are coming to market in a very powerful way, with immediate scale and a proven track record of customer service, innovation and technical excellence.

We are confident that we can capture a 10 per cent share of the handheld market by 2010. It is well understood that we are the only satellite voice services operator to have renewed its satellite fleet, and I believe we have the perfect service proposition to take on our rivals.

Our accelerated entry into the market, just ten months after announcing our intention, came from the opportunity to collaborate with ACeS, the leading Asian hand-held satellite services operator. We have a phased strategy to roll-out the service, which culminates with global coverage by the end of 2008. We have appointed Lockheed Martin and Ericsson as partners in the development of the service, and will be announcing a logistics and repair partner very shortly.

2007 is looking like a busy year for Inmarsat. In addition to the launch of your new handheld service, there is the launch of your aeronautical SwiftBroadband service. There is also a maritime version – FleetBroadband – in the works, isn’t there?

SwiftBroadband and FleetBroadband are both planned for launch by the end of 2007. You can think of these two new services as the aeronautical and maritime versions of BGAN, and they will offer increases in capability on the same scale as we have been able to offer our land-based users with BGAN.

 

Mobile broadband is a growing sector for Inmarsat. It’s just over a year since you debuted your BGAN service. How have they been received and where do they fit into the market?

Since its launch, BGAN has been Inmarsat’s fastest growing service over its first year of introduction, and with 2007 as the first full year contribution from the service running on the two Inmarsat-4 satellites, we are very excited by the prospects for the coming year. We have seen BGAN used more widely in our core markets and deeper penetration in new markets. The media, for example, are integrating BGAN within their standard mix of communications technology, and the service is now an established method for delivering both live and recorded video reports; international broadcasters such as the BBC, CNN, Kyodo News and Al Jazeera are all key users of BGAN.

The service is also used extensively by governments, aid agencies, oil and gas companies. It has been deployed in over 170 countries to date, and we now have 16 BGAN distribution partners who are helping to drive demand from new customers in new market segments.

What about the growth in wireless communications such as WiMAX? Does Inmarsat see these as competitive or complementary?

Terrestrial networks are complementary to Inmarsat. To date, roll-out of services like WiMAX have tended to focus on the larger urban and metropolitan areas, where the deployment can be readily justified by the costs and the accessible market in these densely populated areas. Or, when rural areas are covered, there needs to be a certain population of users. Their business model needs that in order to work. And that is where the market often fails in rural and remote areas, because deployments costs increase substantially and the accessible market is smaller.

Satellite communications, on the other hand, can comfortably cover entire continents, which makes them a natural complement to these other technologies, extending the reach of terrestrial networks to ensure that voice and broadband data is available to everyone around the world. Furthermore, satellite technology is available now; the investment has already been made, satellites are in orbit, and the capacity can be deployed on demand.


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