Inmarsat mobile satellite services 2013 revenues graph

World events put satcom business in the spotlight

Inmarsat’s role in the hunt for the lost Malaysian plane has placed it on the financial map, and two small British nanotechology firms use AIM listing to raise funds.

It’s an unfortunate fact that disasters are good for the satellite communications company Inmarsat. The disappearance of Malaysian flight MH370 put the UK technology group in the global media spotlight, thanks to the central role its engineers played in identifying the plane’s likely flight path (a feat that also made “ping” the favoured technical term of reporters).

Depictions of Inmarsat’s technological “first” (as the company itself described its achievement) not only filled TV screens all over the world, they also excited the investment markets, which in recent years had looked none too favourably upon the company.

The problem, in the eyes of the City, has been the high cost of investments in satellites, alongside the unpredictability of world events. Inmarsat, a key provider of satellite telecommunications for troops in Afghanistan, has suffered from the military withdrawal there. A downturn in the global shipping industry has also hit the company’s finances in the past.

However, it seems that it is not only the MH370 disaster that has woken investors up to Inmarsat’s technological potential. The company says it also expects to generate extra revenue this year from its $1.6bn GlobalXpress programme to put four new Inmarsat-5 broadband satellites into space. The first of these Boeing-built spacecraft was successfully launched last December, with two more expected to follow later in 2014 and the fourth in 2016.

Adding to the company’s 10 satellites already in orbit, the Inmarsat-5s will provide the world’s first global satellite broadband service, promising to offer “consistent high-performance download speeds of up to 50Mbps and 5Mbps over the uplink”.

Inmarsat needs more good fortune this year after seeing revenues fall slightly in 2013 to $1.25bn compared with 2012. Profits were also down a little to $639.8m. Chief executive Rupert Pearce, who recently unveiled the 2013 annual results, pointed out that its maritime business has enjoyed a recovery, adding 7,200 new subscribers in 2013. The company also saw growth in its aviation unit, which offers mobile data services to plane passengers.

The dip in revenue and profits was, according to Inmarsat, partly due to a financial hit that resulted from an as yet unsuccessful joint venture with the wireless telecoms group LightSquared. The US company was placed in bankruptcy protection in 2012 after its plans for a 4G wireless data network were blocked by the Federal Communications Commission (FCC) over concerns about possible interference with the GPS. LightSquared may yet persuade the FCC to back down, which would be good news for Inmarsat’s plans.

Meanwhile the British company can look forward to more good publicity this year, assuming two more Inmarsat-5 satellites are successfully launched from Kazhakstan. And the company can boast a 100 per cent record to date for successful launches.

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