[Satellite News 12-03-12] In late December, Pole Star, Absolute Software and Absolute Maritime Tracking Services completed a three-company merge into a London-based entity providing a combination of monitoring and security related services.

   The new entity will inherit a service portfolio of more than 35,000 vessels – approximately half the world’s international fleet – and operate long-range identification and tracking (LRIT) data centers for 40 maritime administrations. Pole Star, like many companies in the satellite maritime market, hopes that increased technology resources will enable the group to deliver its products more quickly to its customers.

   Near Earth Partner John Stone, who advised Absolute on the merger, spoke with Satellite News about how smaller maritime companies can position themselves to enhance their competitive potential in the larger market.

 

Stone: I think the most important thing for market watchers to pay attention to is increasing competition that satellite has and will face in the maritime market. Obviously, satellite still maintains its status as a communicative necessity for connectivity over the ocean. Despite this advantage, satellite providers have not been stagnant. They continue to enhance the reliability and performance of their offerings while keeping that edge over terrestrial. That said, the competition is not only growing between industries, but within the industries as well. Outside of ports on land, satellite’s biggest maritime competitor is satellite in terms of how quickly and efficiently they provide innovation to the market.

 

Stone: Near Earth represented and advised Absolute’s investors during the merge. We were aware of the potential synergies between the two entities. We approached Pole Star on Absolute’s behalf. From our point of view, the move made a lot of sense and would help create a competitive presence in the satellite-tracking realm. While we’re in touch with both management teams, as of right now, we’re not involved with any post-merger engagements.

 

 

Stone: Pole Star and Absolute were not very large companies, but combined, the entity officially becomes a medium-sized firm. Absolute had a significant presence in the VMS space, where they were providing fisheries with the ability to monitor a catch. This offering allowed their customers to ensure that they were compliant with regulations. They had this strong business while at the same time investing in some interesting new capabilities in LRIT. But, they were not nearly as big as Pole Star in the LRIT space.

   LRIT is a regulatory compliance measure. It requires installation of certain identification equipment on ships. As two separate smaller companies, Pole Star and Absolute were working to solve a lot of the same technological problems to be able to provide their basic level of service. The situation made some of those separate efforts a wasted expense. They go to the same trade shows. They have the same research and development teams. The merged entity, however, brings a significant number of ships under the same service umbrella and justifies the expense into developing new applications. Those costs can be spread out over a number of ships.

 

 

Stone: Once you have that LRIT equipment on the ship, you have a two-way telematic interface that you can use for a variety of applications. That’s why it’s important for a company to be able to invest in developing new applications – to build on what’s already there. I call them ‘overlay applications.’ An example is Pole Star’s Amver Safety Network. It is a search and rescue service that allows the sharing of information on the positions of several ships. Another example is the ability for that network to do geo-fencing, which is basically the ability to detect a ship that is in someplace that it shouldn’t be. The software can detect the ship and flag it to rescue authorities. This could prevent either piracy or further loss on a ship that already has experienced mechanical malfunction or a ship to sail further off course. The software alerts authorities of a ship’s presence even if it has not been able to call for help.