Inmarsat ventures into satellite phone market

Dubai: Inmarsat, the global satellite telecommunications company, said yesterday it was entering the satellite phone communications field and would offer services in the Middle East.

The company, known more for its geostationary earth orbit satellite network that pinpoints the positions of ships worldwide, will take on local incumbent Thuraya Satellite Telecommunications. Analysts believe the sat-phone market is a $350 million business with 600,000 subscribers.

Inmarsat is targeting a niche market of clients in the fields of government, mineral extraction and aid organisations that require data-heavy telecommunications in the hinterlands, where cell phone penetration is low.

The company, listed on the London Stock Exchange, is partnering with Indonesian telecom ACeS. After an ACeS-owned satellite failed to operate, the company chose to partner with Inmarsat and its fleet of geostationary satellites. The new service will make use of three Inmarsat satellites the size of double-decker buses.

Chris McLaughlin, vice-president of investor relations at Inmarsat, said following a press conference that the Middle East is a "key user" of satellite phones.

Collectively Inmarsat and ACeS will launch services in early 2007 using an Ericsson handset and will price calls in the range of 25 cents to $1 per minute. The two hope they can escape the fate of earlier sat-phone carriers Iridium and MobileStar, which filed for bankruptcy.

"We were never party to the mad dash into satellite phones," said McLaughlin. With existing networks growing older, he said the time was ripe for a new entrant into the marketplace.