Inmarsat and ACeS collaborate on handheld voice

Inmarsat and ACeS International Limited have announced collaboration arrangements to offer low-cost handheld and fixed voice services to Asia, with plans to eventually extend coverage globally.

Under the arrangement, Inmarsat will assume responsibility for satellite and network operations, wholesale service provision, as well as product and service development. ACeS will focus on distribution of MSS products in the Asian land and maritime markets and will become a distributor of Inmarsat's BGAN services.

Inmarsat plans to expand geographic coverage for the hand-held service in early 2007 using the existing I-4 satellite covering Asia, and from there to global coverage within two years.

The move heralds Inmarsat's first push into the handheld satellite voice market pioneered by global companies like Iridium and Globalstar. Despite the disastrous launches of those services in the late 90s, handheld satellite voice is now an estimated $650 million annual business, thanks in part to the success of smaller regional players like ACeS and Thuraya.

'It's a market that's growing 30% a year, and in a few years Iridium and Globalstar will be coming to the end of their service life,' Inmarsat Chairman and CEO Andrew Sukawaty told AsiaSatellite News. 'With our I-4 satellites, we'll be able to offer handheld services globally until at least the end of the next decade.'

Sukawaty hopes to capture at least 10% of the handheld satellite telephony market by 2010. Inmarsat expects initial annual revenue arising from the collaboration to be in the range of $3 to 5 million, based on ACeS' current handheld customer base of 14,000 users.

Part of that plan will require ground equipment testing to ensure that the handheld service works on both the ACeS Garuda satellite and the I-4 simultaneously, says Sukawaty. 'We've already verified that the ACeS service works on the I-4.'

Sukawaty added that Inmarsat would be making minor modifications to the ACeS R190 hand-held satellite phone. 'We're just looking to update the voice codec to improve performance - not that there's anything wrong with its performance now,' he says. 'We'll also be making some minor modifications like increasing the antenna size slightly.

The ground and handset modifications will cost between $40 million and $45 million, according to Inmarsat.

The collaboration also gives ACeS a chance to seek new growth, which has been limited due to an anomaly in its Garuda satellite in 2000 that knocked out one of its two L-band antennas, impacting its call handling capacity.

'ACeS will leverage its strong regional presence to introduce Inmarsat BGAN services to its channels and renew focus on hand-held sales,' ACeS Chairman and CEO Adi Adiwoso said in a statement. 'With the continued support of strong national service providers, PSN in Indonesia, PLDT in the Philippines and ARS in Thailand, we have a bright future and a significant market opportunity.'