Speaking on SATELLITE 2012’s MSUA-9 CEO panel, “The Best is Yet to Come: MSS CEOs Speak Out,” Inmarsat’s new CEO Rupert Pearce openly admitted that Inmarsat has particularly been impacted by several headwinds – maritime customers transitioning to new technologies and a gradual reduction in government spending in Afghanistan. “We’ve been relatively flat. We haven’t had the growth rate that we’ve seen from our competitor, Iridium. We enjoyed revenue growth in 2011, but this was largely created by our L-band spectrum contract with LightSquared,” said Pearce. “Unfortunately, LightSquared has been mired in a well-publicized and difficult regulatory issue with the U.S. Federal Communications Commission (FCC).”

   Pearce referred to LightSquared’s recent default on its spectrum payments under the deal as “an expected consequence. Conservatively, we’re not expecting more payments from LightSquared this year. If they can get through this regulatory issue, we may see some value in that offering, but that development is definitely uncertain at the moment.”

   The U.S. military withdrawal from the Afghanistan battle theatre was an especially significant blow to Inmarsat, the MSS industry’s traditional powerhouse, as military boots return to base and transition off of the mobile network. All of these headwinds, according to Pearce, have forced the company to look at innovation – not only in developing products and technology, but also in the way of doing business.

   “The restructure streamlines our decision-making process and focuses our activities on the primary markets we serve,” said Pearce. “By minimizing the overlap between the Inmarsat businesses, we can better target our investment into market development activities that benefit our entire distribution channel. When our channel partners are direct competitors, a dollar of revenue moved from one of our channel partners to another does not generate revenue. It does not generate growth.”

   Iridium Communications CEO Matt Desch lightheartedly welcomed Pearce to the “kind and nurturing MSS panel,” by evaluating Pearce’s reorganization plan with sardonic praise when panel moderator and MSUA President Tim Farrar asked if he disagreed with the plans of his long-time competitor. “Absolutely not,” Desch asserted. “I think it’s brilliant. It’s the best thing that has ever happened to Iridium.”

   Jokes aside, Desch, who won Via Satellite magazine’s 2011 Satellite Executive of the Year Award for his performance in the past year, stressed that 2011 was not an unusual year for Iridium in certain metrics. “We did grow revenues at 20 percent again, as well as our customer base by more than 20 percent, but for us, this year was really defined by innovation,” said Desch. “I think 2011 was the year that Iridium really had its innovation engines fired. We covered a lot of technological ground in the M2M sector, which is the fastest growing segment of our business. We also made a lot of progress in Iridium NEXT, but we didn’t talk about it much because we were still building around our current offering.”

   Pearce also is building, as Inmarsat is developing its upcoming Global Xpress Ka-band system, which aims to revolutionize the mobility services landscape for high-end data customers. But Pearce’s praise of Desch’s business plans with Iridium NEXT may have seemed strange to some session attendees that had grown used to the SATELLITE show’s traditional battleground between Desch and former Inmarsat CEO Andy Sukawaty.

   “Matt speaks passionately about technology and it’s a credit to Iridium,” said Pearce. “I couldn’t agree more with the idea of focusing on mobile devices that customers want to use – iPads, smartphones and so on. I hear a lot about the blurring between MSS and FSS industries, but I think there is a real difference between the two industries in that the top five MSS companies have five clearly defined and unique business models.”

   Desch enthusiastically agreed. “And each of those business plans, in their own right, have a real potential for success. They just come from different perspectives.”