MSS Operators Preparing For 2008

[12-27-07 – Satellite News] The Mobile Satellite Services (MSS) market spent most of 2007 focusing on the future, as many companies continued to work on their next-generation satellites and business plans.
    Both Iridium Satellite LLC and Globalstar Inc. moved forward with plans for their second-generation satellite constellations. Iridium, based in Bethesda, Md., unveiled plans in February to spend more than $2 billion to build and deploy a second-generation satellite constellation dubbed Iridium Next. Plans call for the 66-satellite system to be rolled out incrementally, with a portion of the cost funded through cash flow, which is about $60 million per year, and the remainder from capital markets and strategic partners.
    But problems with Globastar’s current satellites helped tip the balance of power in the rivalry toward Iridium, which reported reporting record growth and revenue and earnings for the year.
“We had a banner year,” Iridium Chairman and CEO Matt Desch told Satellite News. “We had record growth in revenue and earnings. We’ve grown our subscriber base at 30 percent a year. We’ve emerged from the MSS field to be the undisputed number two player, and we can see a clear path to challenge for number one.”
    North American traffic surged for the company in the third quarter of 2007, with nearly double the traffic in Canada, and usage up by 77 percent in the U.S.
    Globalstar hit a rough patch with the company’s announcement early in 2007 of S-band antenna problems on its satellites that could cause a loss of service to some customers. Globalstar has launched eight satellites to augment their 40-satellite constellation, providing satellite voice and data service through the launch of the second-generation constellation, which begins in 2009. Jay Monroe, Globalstar’s CEO and chairman, said that despite their problems, they expect to recover after the launch of the second-generation satellites.     
    “The people who have retained our products will stay with us,” he said. “The whole nature of communications in the world has changed in the last 20 years, we have all become data junkies and everyone wants to be connected wherever they are.” This bodes well for all the MSS companies, he said.
Globalstar will begin taking deliveries of the new generation satellites in the summer of 2009, with launches beginning shortly thereafter.
Other MSS players are counting on a mix of satellites and ancillary terrestrial component (ATC) technology to power their business in the future.
    Mobile Satellite Ventures (MSV) raised $150 million that President John Mattingly said will cover the company through the end of 2008 as it works to complete its second-generation satellites. MSV is banking heavily on ATC service, which will allow operators to provide service in urban areas and inside buildings which satellite signals are too weak to penetrate. The company is developing two satellites to be built by Boeing and designed to provide wireless broadband coverage of North and Central America. The first satellite will be launched in the second half of 2009 by International Launch Services.  
    Mattingly said that MSV had a good year. “We met or exceeded all our milestones,” he said. “Our satellites are on or ahead of schedule. We’re pleased with our progress in every respect, and the industry just going to get more interesting in 2008.”