Inmarsat plans 'compelling' in-flight passenger broadband service in Europe

Satellite operator Inmarsat said it plans to launch Europe's first integrated satellite and air-to-ground network that will allow air passengers to surf the Internet on their laptops and smartphones during flights across the European Union.

The UK-based company said the capabilities will be offered alongside its Global Xpress aviation services. It added that British Airways was in advanced talks to roll out the service, which will use a new satellite expected to be delivered for launch at the end of 2016.

The company said it has ordered a new S-band satellite, to be called Europasat, and expects to complement the bird with a fully integrated air-to-ground network across the EU.

According to analysts from Jefferies, the proposed system is "compelling" and also finally resolves the question of what Inmarsat will do with 30 MHz of S-band spectrum that it has been holding since May 2009.

Inmarsat and Solaris Mobile were selected by the European Commission to provide mobile satellite services in Europe using harmonised S-band frequencies across the 27 member states. S-band is spectrum in the 2 GHz band and is adjacent to UMTS used by 3G operators.

In January, EchoStar said it acquired full ownership of Dublin-based mobile satellite services operator Solaris Mobile from former parents Eutelsat and SES and will take over Solaris Mobile's one S-band payload currently in orbit.

To reduce initial programme costs, Inmarsat said it and Hellas-Sat, a non-competing European satellite operator, have contracted with Thales Alenia Space for the construction of a satellite on a shared basis such that each partner will retain exclusive rights to a separate payload.

Inmarsat's costs for the manufacture, launch, insurance and operations of Europasat are expected to be about $200 million (€146 million), or half of what it would have cost to deploy an S-band satellite on a stand-alone basis. The majority of the expected cost will be incurred over a three-year period.

The total cost to Inmarsat of the further ground network development programme and service deployment is estimated at $200 million to $250 million and would be incurred over the next six years

"We won't dwell on the market opportunity given the potential for the in-flight broadband is now well established," commented Jefferies, citing the success of Gogo Inflight Internet in the U.S. This company also now faces competition from AT&T, which plans to launch in-flight LTE services in 2015.

Instead, the analyst company noted that Inmarsat's service would be in a very good competitive position in Europe: "No single mobile operator will be able to replicate Inmarsat's proposed ATG network in the S-band," the analysts said. "With an integrated ATG/satellite network it will now, in our view, be able to outperform all other infrastructure competition on the data throughput metric."

Inmarsat has also previously said that its GX programme to provide global inflight connectivity via a network of Ka-band satellites is proceeding on track, with the 50 Mbps GX service slated to arrive in 2015.

Jefferies noted that Inmarsat CEO Rupert Pearce said that the proposed system will be 50-times cheaper than GX on this metric.

"North America has seen rapid take-up of in-flight passenger connectivity services, with installation and usage both growing very quickly," said Pearce. The success of the Gogo air-to-ground network has already triggered the building of a second competing network by AT&T, one of the world's largest telecommunications operators. Independent research predicts that in-flight connectivity services will be a multi-billion dollar revenue sector by 2020."

For more:
- see this Inmarsat release

Related Articles:
EchoStar buys struggling MSS operator Solaris Mobile
AT&T looking to buy all of Sprint's 2.3 GHz WCS spectrum licenses, possibly for in-flight Wi-Fi
AT&T targets Gogo, others with plan to launch in-flight LTE by 2015
Inmarsat making headway on GX Ka-band inflight broadband service
O3B takes on Inmarsat in marine

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