Tag: Inmarsat

Viasat completes merger with Inmarsat

9:22 am

After two years dealing with regulatory delays, Viasat has finally completed its purchase of Inmarsat, producing a single company that has 8,000 employees and a fleet of nineteen operating satellites.

The key quote from the link however is this:

Their merger announcement sparked additional consolidation plans as operators look to bolster their defenses amid a growing competitive threat from Starlink in the satellite broadband market. Eutelsat announced plans to buy OneWeb in November 2022 and hopes to complete its merger this summer. SES and Intelsat confirmed March 29 they were in talks about merging, although they have not provided a meaningful update since then.

In other words, the older geosynchronous satellite companies are consolidating because of the competition posed by SpaceX’s Starlink system, which also suggests these companies have never competed very aggressively against each other to cut costs. Now that someone new (SpaceX) has arrived doing that, they find their only option is to merge. Apparently the corporate culture in each separate company finds cutting costs difficult. Merger appears to be their only avenue for doing so.

I wonder what will happen to these old satellite companies when (or if) Amazon finally begins launching and operating its own Kuiper constellation, in direct competition with SpaceX. Unless they finally begin to offer a competitive product at a competitive price, I expect after consolidation we will begin to see bankruptcies.

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UK regulators give okay on Viasat’s purchase of Inmarsat

9:46 am

After months of delay, the United Kingdom’s Competition and Markets Authority (CMA) regulators has finally admitted that Viasat’s purchase of Inmarsat would not reduce competition in the communication satellite industry, and has approved the purchase unconditionally.

The evidence analysed by the panel shows that, while Viasat and Inmarsat compete closely– specifically in the supply of satellite connectivity for wifi on flights – the deal does not substantially reduce competition for services provided on flights used by UK customers.

The evidence also shows that the satellite sector is expanding rapidly – a trend that is set to continue for the foreseeable future. This is due to increased demand for satellite connectivity, driven largely by the ever-growing use of the internet by business and consumers.

The CMA press release is a classic of bureaucracy blather. Essentially, it tries to make it sound like this agency did lots of difficult hard work to discover what is patently obvious, that without this merger these two companies will almost certainly not be able to compete with the emerging new satellite communications companies coming on line.

The best thing that the UK could do to encourage competition and new industries in the UK would be to defund this agency, now. Its existence accomplishes nothing other than to stand in the way.

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UK bureaucracy provisionally clears Viasat-Inmarsat merger

9:40 am

We’re here to help you! The United Kingdom’s Competition and Markets Authority (CMA) has now provisionally approved the merger deal between the two communications satellite companies Viasat and Inmarsat by admitting the obvious, that the deal will do nothing to reduce competition in the presently thriving communications satellite industry.

Over the past 4 months, an independent CMA panel has gathered and scrutinised a wide range of evidence in order to better understand the sector, as well as the potential impact of the deal. This included internal documents from Viasat and Inmarsat, as well as the companies’ competitors (including their plans for future expansion); evidence from airlines; the CMA’s own analysis of sector conditions – and how these could change.

…The CMA’s investigation into the Viasat/Inmarsat deal has provisionally found that, while the companies compete closely in the aviation sector – specifically in the supply of satellite connections for onboard wifi – the deal does not substantially reduce competition for services provided on flights used by UK customers.

Duh. In other words, these bureaucrats spent four months determining what is self-evident to every person who pays any attention to the business of space. Furthermore, both companies are badly threatened by the new players in this industry, like OneWeb and Starlink. This dithering by bureaucrats threatens their survival, as these older companies want to merge to give them the resources to better compete. Being forced to sit and wait only increases the chances that both will go bankrupt, thus reducing competition, the very thing this government agency is supposed to encourage and protect.

Not that the CMA has come to any real decision yet. As its press release notes so nobly, “Today’s findings are provisional, and the CMA will now consult on its findings and listen to any further views before reaching a final decision.”

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SpaceX launches an Inmarsat communications satellite

9:10 pm

SpaceX tonight used its Falcon 9 rocket to launch an Inmarsat communications satellite from Cape Canaveral, Florida.

This was SpaceX’s second launch today. The first stage successfully landed on a drone ship in the Atlantic, completing its third flight. Both fairings were also previously flown.

The 2023 launch race:

12 SpaceX
5 China
2 Russia
1 Rocket Lab
1 Japan
1 India

American private enterprise now leads China 13 to 5 in the national rankings, and the entire world combined 13 to 9. By itself SpaceX leads the world combined 12 to 9.

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UK regulators to investigate Viasat-Inmarsat merger

9:03 am

The United Kingdom’s Competition and Markets Authority (CMA) yesterday opened an investigation into the purchase of InMarsat by Viasat, announced in November ’21, to see it that merger would “result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

This investigation will clearly delay the merger. It also appears somewhat counter-productive, considering that Inmarsat has been having trouble making money in recent years due to the market’s shift from its big geosynchronous satellites to constellations of smallsats in low Earth orbit, such as SpaceX’s Starlink. Viasat meanwhile has been desperately trying to block Starlink because of that very competitive threat.

By merging, these two satellite companies might survive and compete with the new orbital constellations. Otherwise, they might both go out of business, thus reducing competition. It seems the CMA will be shooting itself in the foot if it blocks this merger.

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NASA awards contracts to six companies for its future orbital communications

9:56 am

Capitalism in space: NASA has awarded development contracts to six different companies to test the technology for providing the agency orbital communications for its manned missions, replacing the NASA-built TDRS satellite constellation.

In addition to SpaceX and Project Kuiper, the contractors include U.S.-based ventures representing Inmarsat, SES, Telesat and Viasat. Each venture will be required to complete technology development and in-space demonstrations by 2025 to prove that its system can deliver robust, reliable and cost-effective services — including the ability for new high-rate and high-capacity two-way links.

NASA would follow up by negotiating long-term contracts with multiple vendors to acquire services for near-Earth operations by 2030, while phasing out satellite communications systems owned and operated by the space agency.

Because NASA’s own station will likely be gone when these new in-space communications constellations become operational, their likely customers will not be NASA but the private space stations now under development. NASA is thus accepting responsibility for paying the cost for getting this communications need developed, for all the private companies. While the private space stations should eventually pay for using and building these constellations, it makes sense for NASA to get this started. No one company could likely afford or even be willing to pay the entire cost, and getting them all to work out an arrangement now would be difficult. NASA in turn can get it done now, and then later negotiate contracts with the private stations to pay for its construction and use.

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Japan’s H-2A rocket launches communications satellite

3:52 pm

Japan today successfully launched a commercial communications satellite using its Mitsubishi-built H-2A rocket.

This was Japan’s third and likely last launch in 2021. Since 2018 its numbers have been low, ranging from 2 to 4, so this total matches that pace. It is an embarrassment for Japan, however, when compared to China and SpaceX.

The leaders in the 2021 launch race remain unchanged:

48 China
31 SpaceX
22 Russia
6 Europe (Arianespace)
5 ULA
5 Rocket Lab

The U.S. and China remain tied at 48 in the national rankings. This was the 128th successful launch in 2021, making it the second most active year in the history of rocketry, exceeded only by 1975, when there were 132 successful launches, 98 of which were by the Soviet Union, with the bulk of these being short term low orbit spy satellites.

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Viasat to buy Inmarsat for $7.3 billion

9:35 am

Two long time traditional communication satellite companies today announced a merger, with the U.S.-based Viasat to buy the UK-based Inmarsat for $7.3 billion.

In a surprise move, California-based Viasat this morning announced a plan to acquire UK-based Inmarsat for a cost of some $7.3 billion — potentially creating a commercial satellite communications behemoth worth $4.1 billion in 2021 revenue, of which 40% is in government sales, including to the Defense Department.

While the acquisition will require approval from regulators, the combined company already is planning an expansion of its on-orbit assets, including two polar orbiting satellites that can bring capacity to the Arctic.

The bulk of business for both companies has in recent years been government military contracts, launching geosynchronous communications satellites. Both however have been under strong competitive pressure from the newer satellite constellations in lower orbit. Additionally, the push within the Space Force to shift from single large satellites to many redundant smallsats has put pressure on both companies.

This merger suggests a consolidation is occurring in these big old satellite companies as they struggle to adjust to a changing satellite market. Viasat for example was founded in 1986, while Inmarsat began in 1979, with both companies exclusively launching the traditional geosynchronous communications satellites. Both now are faced with new technologies in low Earth orbit, which has many advantages over high geosynchronous orbits. They need to adapt and change, or die.

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Inmarsat to launch new low orbit communications satellite constellation

10:23 am

Capitalism in space: Inmarsat announced yesterday that it plans to launch a 150 satellite constellation in low Earth orbit to supplement and improve its already orbiting communications satellites in high geosynchronous orbit.

The company is investing $100 million over the next five years to lay the groundwork for deploying 150-175 LEO spacecraft.

They aim to join satellites Inmarsat has in geostationary and highly elliptical orbits from 2026. Inmarsat, which currently operates 14 satellites, is also on track to add five new GEO and two HEO spacecraft to its network over the next five years.

Its incoming multi-orbit constellation, called Orchestra, seeks to improve latency, network speeds and resiliency for communications services across its core maritime, aviation, government and enterprise markets.

This new constellation is also an effort by Inmarsat to keep its communications product competitive against the newer constellations being launched by SpaceX (Starlink) and OneWeb.

For the space launch industry, this just means more launches, more demand for rockets, and more money to be made.

Note that Inmarsat’s approach here is the correct way to respond to competition. Rather than try to squelch your competitors using government regulation, as Viasat is attempting, Inmarsat is instead up its game, improving its product, and thus matching the challenge its competitors are offering it.

One last question: Will this new constellation, set to be operational by ’26, get there before Amazon’s long promised Kuiper constellation? Right now I’m willing to bet that it will, considering how slow Amazon has been in developing that system.

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Inmarsat bought out and delisted from stock exchange

9:07 am

Capitalism in space: The long established communications satellite company Inmarsat has been bought out by a consortium called Connect Bidco and delisted from stock exchange.

Nor is Inmarsat alone:

Inmarsat is the third satellite operator to delist from public markets this year, following Hong Kong-based AsiaSat and London-based Avanti in September.

Inmarsat reported a loss of $89.1 million on $1.06 billion in revenue for the first nine months of the year. The company claimed $36.1 million in profits on $327.3 million in revenue for the months of July, August and September — it’s last public quarter before the buyout.

This story and the quote above explain what is happening. Established satellite companies, that traditionally have built big geosynchronous satellites, are having increased trouble making money as the industry shifts to smaller satellite and constellations in low Earth orbit.

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SpaceX’s loses launch contract due to scheduling delays

9:11 am

Because of SpaceX’s decision to delay its next launch into early January, Inmarsat today decided to switch launch companies for a mid-2017 satellite, dropping SpaceX and signing a contract with Arianespace.

Inmarsat is not abandoning SpaceX, only switching to Arianespace for one satellite. Nonetheless, this decision, coming only one day after SpaceX confirmed the delay, explains to me why SpaceX has been saying for months it intended to resume launches before the end of 2017. Inmarsat had probably told the company that if they delayed into January, they would lose this launch. When SpaceX finally admitted they couldn’t meet the 2016 launch deadline, Inmarsat made the switch.

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SpaceX may lose a customer payload

9:25 am

Because of the launch delays at SpaceX, Inmarsat is considering finding another rocket company to launch its fourth Global Xpress satellite.

Inmarsat is worried that even after SpaceX resumes launches with the Falcon booster, it may not be able to make up lost time to assure its satellite is placed on orbit as scheduled. Alternatives the London-based company is considering include flying the spacecraft on the European Ariane 5 rocket, Lockheed Martin Corp.’s Atlas V, or the Russian Proton booster. Mr. Pearce said Inmarsat could stick with SpaceX if it can get an earlier launch slot.

This is all part of the competitive game. Inmarsat needs to get its satellite in orbit in order to better compete in the communications market, and the delays at SpaceX because of the September 1 launchpad explosion are not helping. This announcement puts pressure on SpaceX to move them to the front of the line or else lose the launch. It also increases their chances of finding an alternative should SpaceX not be able to do that.

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Another Falcon Heavy customer switches to different rocket

2:15 am

The competition heats up: Afraid of more delays in SpaceX’s Falcon Heavy rocket, Inmarsat has booked a Russian Proton rocket for a 2017 commercial satellite launch.

London-based Inmarsat is the second Falcon Heavy commercial customer to have sought a Plan B given the continued uncertainties in the launch schedule of Falcon Heavy, whose inaugural flight has been repeatedly delayed. Carlsbad, California-based ViaSat Inc. in February moved its ViaSat-2 consumer broadband satellite from the Falcon Heavy to Europe’s Ariane 5 rocket for an April 2017 launch, securing what may be launch-service provider Arianespace’s last 2017 slot for a heavy satellite.

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SpaceX’s Falcon Heavy rocket gets a customer

3:22 pm

The competition heats up: The commercial satellite company Inmarsat has booked SpaceX’s Falcon Heavy rocket for one firm launch and two additional options.

The firm contract is for the launch, scheduled perhaps aggressively for late 2016, of a satellite being built for both Inmarsat and Arabsat of Riyadh, Saudi Arabia. Arabsat will use the satellite for conventional telecommunications services for its wholly owned Hellas-Sat fleet operator of Greece. The Inmarsat payload uses S-band to provide mobile communications in Europe as part of a satellite-terrestrial broadband network, which is a new business line for Inmarsat.

Inmarsat’s launch contract is for a rocket that has not even yet been tested once, which tells us something about the faith they have in SpaceX. While I would be shocked if they didn’t have an option to pull out should there be significant delays or problems in launching Falcon Heavy, that they are willing to commit to it now is a convincing endorsement of SpaceX.

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With Proton rocket’s most recent launch failure, Inmarsat looks for alternatives.

3:15 pm

The competition heats up: With Proton rocket’s most recent launch failure, Inmarsat looks for alternatives.

The failure and its spectacular nature, all caught on video — oscillating trajectory on liftoff before tipping over, bursting into flames and then crashing — cast a harsh light on Inmarsat’s sole-source decision for the Global Xpress satellites. The company’s stock tumbled on the London Stock Exchange but has since recovered as details emerged about the relatively easily addressed causes of the rocket’s failure.

Inmarsat officials said at the time of the ILS contract award that they received an exceptionally low price in return for booking all three launches on Proton and that the vehicle’s record justified the choice not to include a second vehicle in the Global Xpress mix.

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This week’s launch failure of the Proton rocket leaves two satellite communications firms in a quandary.

5:05 pm

The competition heats up: This week’s launch failure of the Proton rocket leaves two satellite communications firms in a quandary.

Luxembourg-based SES joins London-based Inmarsat among the commercial customers awaiting Proton launches later this year, a prospect that almost certainly disappeared in the fireball that engulfed Proton shortly after liftoff from the Baikonur Cosmodrome in Kazakhstan. Inmarsat’s entire next-generation high-speed mobile communications product offer is booked on three Proton launches.

It appears that their only other launch options are Arianespace, which is booked up, and SpaceX, which is not yet ready to take on this much new business.

In other words, the launch industry has a need for more launchers from companies willing to compete for that business.

Update: Arianespace has said that if they get the orders quickly, they might be able to fit the launch’s into their 2014 launch manifest. That has the sound of a company that wants to make money, and is willing to do whatever it takes to capture the business.

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