[Satellite TODAY Insider 11-03-11] The revenue Inmarsat generated from the updated cooperation agreement it solidified with LightSquared in June 2011 drove strong headline growth in the 2011 third quarter and helped the MSS operator offset a slowdown in its MSS revenues, according to Inmarsat CEO Andrew Sukawaty.

   In a Nov. 2 conference call, accompanied by Inmarsat’s latest financial results, Sukawaty said that while the company’s third quarter MSS results were inline with his expectations, it is unlikely to see consistent evidence of a return to MSS revenue growth until next year. “In the meantime, we are making progress with key new product developments and with our Global Xpress program and these are important building blocks to future value and new growth,” Sukawaty said during the call.

   During the fiscal quarter that ended Sept. 30, Inmarsat increased its total revenues 17.9 percent at $364.1 million compared with the same period last year. The MSS operator’s global revenues jumped 21.9 percent to $245.2 million, with its total active customer terminals also increasing 12.5 percent. The company’s total global MSS revenues, however, declined slightly from its 2010 third quarter mark of $185.1 million to $180.7 million, offset by a modest increase in solutions revenue from $186 million to  $197.4 million. “Growth in our Inmarsat Solutions division was primarily driven by recognition of new revenues following the acquisition of Ship Equip earlier in the year and by growth in our Segovia business,” Sukawaty said.

   Inmarsat launched its XpressLink hybrid maritime and IsatData Pro M2M service during the quarter. The operator’s key growth driver in LightSquared stemmed from an agreement to accelerate the schedule for LightSquared to begin using Inmarsat’s L-band block frequencies. LightSquared, which has been trying to deal with potential GPS signal interference issues, said its own research determined that the lower 10MHz block of the spectrum would not create interference risks as it is located farther away from the GPS frequencies. Sukawaty said the deal was responsible for $56.4 million in revenue and $3.5 million in operating costs.

   Inmarsat’s maritime results, however, continued to be impacted by customer migration to the operator’s FleetBroadband service, where Sukawaty said pricing is typically lower than the older services being replaced. “In addition, voice to email substitution, lower voice pricing and competition from alternative providers, have contributed to lower maritime revenues year-over-year,” he said.

   In a Nov. 2 research note, Investec Analyst Morten Singleton said Inmarsat’s overall performance numbers in both revenue and profitability were slightly ahead of his firm’s consensus. “[Inmarsat] is out there retaining market share in the maritime business in readiness for the new services which should help reinvigorate some strong revenue growth for the maritime sector," he said.

   At the end of the quarter, Inmarsat stands with net borrowings of about $1.16 billion made up of cash and cash equivalents of $310.8 million and total borrowings of $1.47 billion.