Sirius, XM

XM Satellite Radio brought in revenues of $933 million in 2006, up 67 percent from 2005, XM Satellite Radio Holdings Inc. announced Feb. 26.

XM also added 1.7 million net new subscribers in 2006 to bring its total subscribers to 7.6 million. Subscription revenue grew 64 percent to $825.6 million in 2006, compared to $502.6 million in 2005, while advertising revenue grew 76 percent to $35.3 million in 2006. The gains were driven by subscriber growth and increases in average revenue per subscriber from price increases implemented in 2005.

Subscriber acquisition cost held steady at $64 for the second consecutive year, while cost per gross addition slipped from $109 in 2005 to $108 in 2006.

XM lost $718.9 million in 2006, compared to a loss of $666.7 million in 2005. The 2006 loss included a $76.6 million charge for investments in WorldSpace and Canadian Satellite Radio, and charges of $122.2 million for balance sheet restructuring.

Sirius Satellite Radio reported record revenue of $637.2 million in 2006, up from revenue of $242.2 million in 2005, the company announced Feb. 27.

For the first time, in the 2006 fourth quarter the satellite operator achieved positive free cash flow, though the company lost $1.1 billion for the year.

Sirius closed 2006 with a total subscriber base of 6 million, up 82 percent from the end of 2005. Average monthly revenue per subscriber was $11.01 in 2006, up from $10.34 in 2005, while subscriber acquisition cost per gross subscriber addition was $114 in 2006, down from $139 a year ago.

Sirius is forecasting its revenues to approach $1 billion in 2007, while projecting that it will close the year with more than 8 million subscribers.

XM and Sirius announced Feb. 19 their plans to combine under a deal valued at about $13 billion, but the transaction faces intense U.S. government scrutiny. The companies hope to complete the merger before the end of the year.

Inmarsat

Inmarsat posted a 2006 profit of $127.7 million, up 98 percent over 2005, the company announced Feb. 27.

Revenues were $500.1 million in 2006, compared to revenues of $491.1 million in 2005. Revenues from mobile satellite communication services were $491.8 million in 2006, up 4 percent from 2005. The gains were due to continued success in services such as Fleet and Swift 64, the launch of the Broadband Global Area Network (BGAN) service and a contribution from handheld services. The gains were offset by lower demand from the Middle East and competition from other technologies, Inmarsat said.

"We have delivered on our target of accelerated revenue growth while maintaining strong growth in operating cash flows," Andrew Sukawaty, Inmarsat’s chairman and CEO, said. "We are pleased that our revenue growth continues to be driven by strong performances across our business sectors and by the fast growing contribution from BGAN services."

Revenues from the maritime sector were $284.7 million in 2006, an improvement of nearly 7 percent compared to 2005. Land sector revenues were $11.1 million, a drop of nearly 5 percent from a year ago, due to a reduction in traffic in the Middle East and competition from VSAT. The aeronautical sector contributed $30.7 million in revenues, up 35 percent from 2005.

BGAN, which was launched in December 2005, contributed $9.5 million in revenues in 2006, though $7.4 million was recorded in the second half of the year. Inmarsat closed the year with more than 7,000 BGAN subscribers.

Sukawaty told a conerence call this week that while the third Inmarsat-4 satellite is fully complete and ready for launch it is unlikely to be launched this year and that a launch in 2008 "is the most likely outcome." However, Sukawaty said any delays in the launch will not materially impact the operator’s business as with its BGAN service as it already covers 98 percent of the world’s population with existing satellites.

The operator is hoping for a strong year for its BGAN services, the core to its growth strategy. While there was a slowdown in the sales of BGAN terminals in the fourth quarter, Sukawaty said that already in the first quarter this year, the operator was seeing a pick-up in BGAN terminal sales. He also confirmed that at this stage there were "no contemplated changes in pricing". Sukawaty said the operator had "been encouraged" by the early take-up of BGAN services.

However, Sukawaty admitted there was work to be done in terms of working with distributors and said consolidation of distributors had not bought about the changes the operator would like to see in terms of overall efficiency. Sukawaty said there would be changes in agreements with distributors as it looks to improve the customer experience. Inmarsat distributes its services among a global network of distributors. Sukawaty said that new agreements will allow Inmarsat to go direct to major customers, but that it will continue to sell the majority of services on a wholesale basis.

EchoStar

EchoStar Communications Corp. reported revenue of $9.8 billion in 2006, up from $8.5 billion in 2005, the company announced March 1.

Profits slipped from $1.5 billion in 2005 to $608 million in 2006. Earnings in 2006 benefited from $593 million in tax benefits and a $134 million gain related to the settlement of EchoStar-4 satellite insurance and related claims.

EchoStar’s Dish Network closed 2006 with about 13.1 million subscribers.

Ericsson, Tandberg Television

Ericsson has made an unsolicited offer to acquire Tandberg Television for 9.8 billion Norwegian kroner ($1.6 billion), Ericsson announced Feb. 26.

Ericsson has acquired 11.7 percent of the outstanding shares in Tandberg and has entered into agreements to acquire another 13 percent, Ericsson said. Tandberg would operate as a wholly owned subsidiary of Ericsson and strengthen Ericsson’s position in Internet protocol TV (IPTV) offerings.

"IPTV for cable and telecom operators is the biggest networked multimedia opportunity going forward," Carl-Henric Svanberg, president and CEO of Ericsson, said in a statement. "Ericsson and Tandberg Television is a strong combination with a unique ability to offer complete IPTV solutions. Tandberg’s leading TV technology and customer base, and our global presence and strong position in IP networks and IMS, will create a leading player in networked media solutions for telecom, cable and satellite operators as well as media companies." Tandberg’s board has reviewed the release issued by Ericsson and said it will review the offer and make a recommendation to its shareholders.

SkyPort, RAMTelecom

A newly-formed subsidiary of SkyPort International has signed a letter of intent to purchase RAMTelecom Inc. of Canada, SkyPort announced Feb. 28.

SkyPort has formed a Canadian subsidiary, SkyPort Global Communications (Canada) Inc. to facilitate the purchase. Under terms of the agreement, SkyPort Global will purchase the outstanding shares of RAMTelecom for $0.60 per share in cash.

The deal will increase SkyPort’s ability to serve customers throughout North America by adding facilities in Ottawa and Calgary to SkyPort’s existing network operations center at the Ellington Field Joint Reserve Base in Houston. In January, the companies formed a strategic alliance to serve the North American market.