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Vizada Exec Looks Forward to Non-Telco Era

By | November 7, 2007

       [11-08-07 – Satellite News]   Vizada aims to use its improved product portfolio and distribution reach to become a greater force on the satellite communications landscape. Vizada now incorporates the former France Telecom Mobile Satellite Communications (FTMSC) and Telenor Satellite Services (TSS), which were previously owned by telcos.
          Vizada is a global satellite communications provider offering total communications solutions to customers including maritime fleets, emergency response teams, government and military units, news gathering organizations, natural resource exploration companies, enterprise businesses, airlines etc.
          Vizada’s main shareholder is private equity firm Apax Partners. Erik Ceuppens, the ex-CEO of FTMSC and now Vizada’s CEO for Mobile Satellite Services (MSS), Europe, MEA & Asia told Satellite News there was a big cultural change going on at the company. He commented, “The main difference, I think it applies to both the former FTMSC and the former TSS, is as part of France Telecom and part of Telenor, these activities were not really core business. The big is that Vizada is a core business of Apax Partners. This creates an incredible momentum and focus on the activities, which had not been the case previously.”


      Ceuppens believes the combination of the two companies under the one umbrella is a win/win for both the company itself and customers. He added, “Merging two out of the top three land earth station operators really creates a significant player. The most important element is that by combining TSS with FTMSC, we will be creating a company that will be able to offer the best product portfolio of satellite solutions in the market. It will be a full portfolio of Inmarsat services, handheld services, and also with TSS a very important VSAT element will be added to the portfolio. This portfolio will be complemented with value-added services and applications that the former TSS and FTMSC have been developing, which will give us the best of both worlds.”
          The company is targeting a number of markets as it looks to boost revenues and profits. Ceuppens outlines the target markets for the company. He said, “If you look at the different products, we clearly see growth opportunities today in the maritime market. We are well-positioned in this market. We also see opportunities on the handheld market, as well as in terms of broadband services. The combined company is in an excellent position to capture those opportunities going forward.”
          In terms of the maritime market, Ceuppens believes Vizada will really see the benefits of the synergies between the former FTMSC and TSS entities. He said, “These synergies (between FTMSC and TSS) will create a much stronger position on the maritime market. In terms of products, we will continue to focus on increasing Inmarsat Fleet penetration, which is really the growth driver today, in terms of revenues. We will be focusing on developing the prepaid crew calling opportunity, which today is already a contributor to revenues, but we believe is not fully tapped. So, there are still some opportunities there. There are also opportunities with broadband services in the maritime sector coming up with Inmarsat, and VSAT services, which will be part of the portfolio.”

      French MoD Deal

          The test for the company will now be doing deals under the Vizada name. It made a good start in this respect by announcing a deal with the French Ministry of Defense (MoD) recently. Vizada will provide its mobile satellite communications throughout the next three years (2008-2010) to the French MoD. Vizada provides Inmarsat, Iridium and Thuraya services for use on many different sites worldwide, including dedicated interconnection solutions to meet the MoD’s needs in terms of communications quality and security. Ceuppens said of the significance of this deal, “The French MoD deal is important for us. It clearly shows the confidence of the French MoD in Vizada after the FTMSC era. It is a three-year contract, in which Vizada will be the exclusive provider for all maritime and land mobile services. It also underlines the strength of Vizada in terms of customised BGAN services. It is not only about classic MSS services, but also about BGAN solutions that we will be providing to them.”
          In terms of the major challenges going forward, selling Broadband Global Area Network (BGAN) solutions will be key for the company. Ceuppens admitted, “I would say that this is really the first year of BGAN services, and in this first year, there has been an important contribution of BGAN revenues already. We are seeing the contribution of broadband in our results as well as the continuous performance of handheld services. In 2007, the handheld services are very strong. We can say that 2007 will show growth.”

      Inmarsat and Handheld Services

      Since Satellite News last spoke to Ceuppens, the MSS industry has seen a number of interesting developments including Inmarsat entering the handheld market, and Thuraya launching a new pricing plan, ‘ThurayaECO’for mobile services. Thuraya CEO Yousuf Al Sayed bullishly told Satellite News that the service would “break that myth once for all” that mobile satellite services were too expensive. Ceuppens believes Inmarsat’s latest move is an indication of the growing importance of handheld services. He commented, “I think it clearly underlines handheld services are becoming really an integral part of the MSS sector and product portfolio. We recognised this some time ago. We have been integrating these handheld services in our product portfolio over the last couple of years. I see this as a positive sign, and we will continue to bring these products to the market. We believe that for Inmarsat, it will be important for them to launch quickly their second generation of products in 2009.”

      Reality versus Perception

          Ceuppens agrees with Al Sayed that there has been a “perception issue” in terms of mobile satellite services being considered expensive. However, Ceuppens believes the reality is not necessarily the same as the perception. He commented, “If we don’t even consider ThurayaEco pricing today, but look at the price evolution over the last year, satellite communication services are not really that expensive anymore. It is really a perception thing. I think most satellite communications services (Thuraya, Iridium and Inmarsat) have become affordable. It has become a most effective communications tool, certainly for professional customers on a daily basis. For example, if you consider the classic Thuraya, Iridium and Inmarsat services, and you compare them to GSM roaming prices, you would see that in a lot of cases, satellite communication services are less expensive. But the reality is that we can say that mobile satellite services have become very competitive for professional users.”
          Overcoming that perception will be one of the keys for Vizada over the next year. Ceuppens said, “I would say the challenge is really to build the leader in satellite communication solutions by merging the former FTMSC and former TSS. All the elements are there. All the ingredients are there to achieve it, and now we will have to execute our plans to make it happen. The product portfolio and the extended distribution network will be a key element to bring that value to our customers.”

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