Satamatics Inc., operator of Inmarsat‘s D+ satellite-based micro telemetry service, last week said it eclipsed the 50,000 terminals-in-use milestone and is adding new terminals to its asset tracking and monitoring service at a rate of more than 3,000 new activations per month. And with the success it has been experiencing around , the company will continue to execute a business strategy to grow its business in the United States.

The company, in a prepared statement, attributed its growth and the sustained level of activations to the increasing worldwide need for national, corporate and personal security with its low-cost mobile terminals forming part of many anti-piracy and anti-hijacking solutions.

Expanding upon that, Satamatics President and COO Brian Hester told Satellite News via e-mail that the two markets that have been fueling growth throughout the past year “have been truck tracking and security monitoring and our Ocean Alter product used to satisfy the International Maritime Organization‘s regulations for ship security.

In fact, the trucking and maritime market account for nearly 85 percent of the markets Satamatics serves (60 percent in truck tracking and security and 25 percent in maritime),” Hester said. The company also has its products being used in the oil and gas industry (10 percent) and the remaining 5 percent being attributed being on ocean buoys, intermodal containers and other niche markets.

Revenues from serving these markets helped to build a profitable company that Hester said is not losing customers. “Churn is something we haven’t experienced,” Hester said. “The investment customers make in our technology typically is amortized throughout a five-year period. Churn is a problem in a wireless telephony service where end users are more sensitive to the service costs as opposed to hardware costs.”

New Opportunities

And while the company has already built a profitable business based on the markets it currently serves, Hester noted that there are growing opportunities for the company to capture in the coming years.

One market that Hester noted that is poised for “staggering growth” is the intermodal container market. The other emerging opportunity specifically highlighted by Hester is the truck and trailer tracking market in North America. But Hester said that the company is not currently pursuing that market do to availability of competing technologies.

In fact, competing in the North American market has presented its own challenge for Satamatics.

“Inmarsat D+ has been around since the early 1990s but never had the proper license from the Federal Communications Commission to operate in the United States,” Hester said. “We received our FCC license to operate in the second quarter of 2003, which was the first step to approaching the North American market. We are now on step two, which is establishing a strong, credible distribution network and putting as many applications around our core satellite modem and network technology.”

Hester continued, “Step three to this emerging market for Satamatics is introducing smaller, more power efficient and less expensive modems. The goal is to get a price point that makes a satellite modem competitive with a cell phone-based modem. We believe we will approach this in the next 36 months.”

But even if Satamatics can get the price down, competition from competing terrestrial wireless services will be fierce, particularly in certain geographic areas.

“Using a geostationary satellite [tracking solution] in an urban environment doesn’t make too much sense, so these terrestrial players certainly have the advantage in marketing a solution to the delivery and service fleets operating in a metropolitan area,” Hester said.

However, there is room to compete. “U.S.-based cell phone networks cover 95 percent of the population, [but this translates to] less than 70 percent of the continent. Oil and gas wells in West Texas are not covered by terrestrial wireless, neither is 10 miles off the coast of the United States.”

And even though satellite services offer certain advantages over terrestrial wireless, the overall future of the satellite asset tracking market in the United States is very much unwritten.

“We don’t see a rosey picture in the U.S. satellite-based mobile communications market,” Hester said. “The market will make or break a few of the existing entities and create a few others.” But at the end of the day, Hester is confident that Satamatics will be able to survive. There is plenty of market opportunity for Satamatics to build a very profitable business in the United States.”

–Gregory Twachtman

(Brian Hester, Satamatics, 1-877-728-6284)