A Conversation With Mobile Satellite Users Association President Ahmad Ghais
The Mobile Satellite Users Association is an industry organization representing the users of mobile satellite services. The group is hosting its first users conference in Crystal City, Va., just outside of Washington, D.C., Sept. 27-30. MSUA President Ahmad Ghais took some time away from the final preparations of the conference to talk with MOBILE SATELLITE NEWS Editor Gregory Twachtman about the state of the mobile satellite industry. Here is what he had to say:
MOBILE SATELLITE NEWS: How would you describe the current health of the mobile satellite industry?
Ahmad Ghais: Well there signs that this industry has its problems. That is the bad news. The good news is there are major sectors in the industry that are doing very well. That story is not coming out so well. We hope that part of the story, as well as discussion on the more troublesome parts, will come out of the conference.
MSN: What are some of the success stories that will be highlighted during the upcoming users conference?
Ghais: Of course, there is always the continuing success story of Inmarsat. But not just Inmarsat in London, but also the vendor station operators, service providers, the retailers. Many of them, not all, but many of them are doing quite well. That is one success story.
Another major success story that you never hear about is Qualcomm’s [QCOM] success with Omnitracs. It is providing service to the largest number of global users anywhere.
There are probably successes to come. As always, they are hard to predict, but ACeS is up there. They are presumably starting commercial service soon, as they have announced that the space-segment problem will not adversely impact the rolling out of service. Soon Thuraya will be launching. That will be an interesting prospect. Eutelsat has had an L-band system up for some time and its users are expanding now. Eutelsat is talking about using their system to provide higher-speed services. All of these are successes.
MSN: Is the Iridium disaster still affecting perceptions within the satellite industry?
Ghais: I think so, yes. It continues to and will reverberate for a long time to come. It was such a spectacular failure. The major impact, regrettably, is in the financial community, where evidentially it is more difficult to differentiate between different players in the market place. Of course, when the financial community encounters difficulties, that then ripples through the industry because the industry is still a young industry and is still in the investment rather than the expectation phase so it has high capital demands. You have to go to the financial community for resources. So, yes, I am afraid so. The Iridium debacle will continue to reverberate in the industry.
MSN: Is the Orbcomm bankruptcy filing going to add to the perception problem?
Ghais: I suspect Orbcomm will contribute to the adverse perception because perceptions are perceptions. They don’t have to be quantitative. Certainly Orbcomm’s losses pale in comparison to Iridium’s losses but it is all perceptions. People will say, “Yeah, yeah, here is another one going under.” ICO contributed even though its recovery has shown the company’s resilience. The jury is still out on Globalstar [GSTRF]. We have to see how Globalstar really does in the marketplace. Every month, they seem to be unable to meet the service activation forecasts they need to turn viable. So Globalstar may also contribute to the adverse image of the mobile satellite industry.
MSN: What is the MSUA doing beyond highlighting the success stories in this upcoming conference to help change perceptions within the industry?
Ghais: What the association can do is limited. What its members can do is perhaps wider. With the help of our members, we hope to get the story out that we recognize the problem and try to learn from them. But we also have to show the ongoing business and services.
During the conference, we are doing that during the opening morning (Sept. 28). Companies will be describing their services that are still humming away and why they are good for users and how much users can expect to pay for them. We have Stratos, Comsat, France Telecom, Globalstar and Ericsson.
MSN: Any thoughts on Globalstar’s new financing deal?
Ghais: I am always impressed with [Globalstar Chairman and CEO] Bernie Schwartz. He always manages to find some clever way out of a financial corner.
MSN: Will Globalstar succeed?
Ghais: That depends on the take-up in the market. You can finance all you want, but the problem with all these systems is the top line. The top line is revenue – finding the customers. All the other lines pale in comparison. I think that one thing that is working to Globalstar’s advantage is the introduction of Web access. Even if it is slow, it will still be able to pull down small messages.
MSN: Are the future services in the MSS market going to be more focused on data?
Ghais: There are a few developments that are more exciting that will improve the industry’s financial position. It is just going to be gradually increasing the data rates and offering data services. Of course, there is the prospect of Internet connection. It won’t be as fast as DSL, but then how many people have DSL? How many mobile people can receive DSL-like speeds?
In the mobile satellite industry, there is a tremendous opportunity in Internet connections to mobile, because its the potential mobile Internet user that desperately needs the satellite. The fixed user will probably be reached by some cable or other terrestrial service. Satellites have two competitive advantages: mobility and point-to-multipoint distribution.
Editor’s Note: For more information on the Mobile Satellite Users Association or the First International Mobile Satellite Users Conference and Exhibition, please visit the MSUA on the Web at http://www.msua.org, or contact Ahmad Ghais at 410/827-9268. Also, for those heading to the conference, look for Phillips Satellite & Space Group Senior Analyst Paul Dykewicz, who will be moderating the “Messaging & Asset Tracking” panel discussion on Sept. 28.