| Inmarsat agrees $1bn VSAT satellite contract |
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 Inmarsat has made what may be the biggest technological revolution in its 30 year history after agreeing a landmark $1 billion order for three VSAT satellites, to be constructed by the Boeing Group.Inmarsat and Boeing have confirmed the deal for the three Ka-band spacecraft, which will be added to Inmarsat's current L-band mobile satellite services fleet. Financial details were not disclosed. The fixed-price contract, with options, calls for three 702HP commercial spacecraft with 89 Ka-band beams that will operate in geosynchronous orbit with flexible global coverage. Through a new network, Inmarsat says that the Ka-band service will be able to deliver speeds of up to 50 megabits per second (Mbps) to customers, via terminals from 20 to 60 cm in size. The new satellite series will be called Inmarsat-5. The Inmarsat-5 spacecraft will be compatible with the Ariane, Sea Launch, Proton and Atlas launch vehicles, with launch services to be procured by Inmarsat at a later date. The satellites will have a projected 15-year lifespan, with operations set to start in 2014. Inmarsat says that it already has envisioned a global service, called Global Xpress, to target what it has identified as a US$1.4 billion incremental market for VSAT services. The company says that it will target US$500 million of annual Ka-band revenues five years after the global service is launched. Inmarsat estimates the total cost of the I-5s and Global Xpress will be approximately US$1.2 billion over four and a half years, incorporating the fixed cost of the satellites, as well as the cost of additional ground network infrastructure, product development, launch services and insurance. "This is a new investment for growth,” said Inmarsat chairman and CEO, Andrew Sukawaty. “With the Global Xpress network, we will be the first operator to offer global broadband coverage, offering unparalleled speeds and bandwidth to customers in remote locations around the world.” "Global Xpress will be faster and less expensive than current Ku-band market offerings, it will be delivered to smaller and cheaper terminals and be the first offered on a seamless, global, end-to-end basis with high-quality of service. Picture 50 Mpbs services to a ship or aircraft, and 10 Mpbs to an antenna the size of an iPad (20cm).” "The Inmarsat-5s will also complement our existing global L-band services, allowing us to offer unique hybrid packages using both networks, giving users unprecedented levels of resilience and reliability in remote and harsh environments." Rick Medlock, Inmarsat's CFO, noted that the company expects the Inmarsat-5 programme to be largely funded from internally generated cash flows. “With significant available liquidity today, we see no immediate financing needs,” he said. “In connection with the Boeing contract, we are seeking Export Credit Agency financing support from the US Ex-Im Bank, which could provide an attractive source of long-term debt.” “Furthermore, as a result of our investment in Inmarsat-5, we will move to a more gradual replacement of our L-band network, resulting in a deferment of more than $500m of our previously planned replacement expenditure over the next 11 years." Craig Cooning, vice president and general manager of Boeing Space & Intelligence Systems, also expressed his company’s delight at being involved in such a landmark deal. "This contract represents a best-value solution that combines Boeing's unmatched commercial satellite heritage and Ka-band satellite communications experience to meet Inmarsat's satellite requirements," he said. "Boeing has produced more Ka-band satellite communications systems than any other manufacturer, and we are currently producing the Wideband Global SATCOM satellite series, which is the primary Ka-band system for the US government." "We are committed to a successful partnership with Inmarsat for this newest addition to their service fleet." Speculation that Inmarsat was about to invest in Ka-band technology, to supplement its current L-band services, has been rife for a number of months, with investment bank Merrill Lynch publicly advising investors to sell Inmarsat stock based on the belief that such an investment was imminent and would affect dividend payments. With the confirmation of this new Boeing deal now in place, and construction of the Ka-band satellites set to commence, the impact on the maritime communications market is sure to be very significant. 
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