Market Insight

Alphasat for Inmarsat and ESA launched

July 28, 2013

Przemek Bozek Przemek Bozek Associate Director – Research and Analysis, Service Provider Technology
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Alphasat, a joint project between Inmarsat and the European Space Agency (ESA), was launched by Arianespace on 25 July 2013. It is considered as one of the heaviest payloads ever lifted off to space, and heaviest European, with its mass of around 6650 kg and two payloads on board. The main payload, owned by Inmarsat, will augment the company's voice and data offerings and the second, owned by ESA, expands its Advanced Research in Telecommunications Systems (ARTES) programme through adding its technology demonstration payloads. Alphasat is based on a new satellite platform, Alphabus, which was developed by two leading European space companies Astrium and Thales Alenia Space.

When Inmarsat signed the contract for its Alphasat space craft in November 2007, its satellite communication services revenue was worth almost $550m, with 57 per cent of it generated by maritime services, namely voice and data. At the end of 2007 maritime voice represented almost 50 per cent of maritime data revenue. The proportions have changed with higher demand for data services and lower for voice. By the end of 2012 maritime is still the leading source of Inmarsat's revenue and remained at over 55 per cent share but maritime voice services have dropped to only a quarter of maritime data services or, in other words, has fallen by 29 per cent from 2007 to 2012. It underlines the general trend of larger data usage and lesser demand for voice across users.
 
Inmarsat is clearly aware that soon there may not be enough bandwidth in L-band available to accommodate the extensive traffic generated by its users. L-band is considered as one of the best mediums for signal transmissions via satellite as it is less prone to interference than higher frequencies but, at the same time, its spectrum is very limited. Therefore, its coverage is more similar to the one of Ka-band, rather than the wide transponders layout offered in C- and Ku- bands. However, unlike L-band, Ka- band is known for its widespread availability and spectrum. Inmarsat, conscious of the limitations that may occur if it keeps offering own services only in L-band, has made a decision to complement its network with Ka-band satellites, and a constellation covering the whole world will be launched in 2014. Global Xpress, the current brand for Inmarsat's Ka-band fleet, will append corresponding services to its current offering, but will be aimed at more data driven customers.
 
Despite a new, powerful Ka-band constellation being at the brink of completion, Inmarsat needs Alphasat to retain its position as a leader of commercial L-band and grow its current L-band customers' list. Inmarsat currently operates its own fleet of nine active satellites, with the fourth series adding majority to their revenue. Within that, most of the revenue generated by the fourth series comes from its 4F2 satellite covering EMEA. Alphasat is not only complementing the EMEA region services due to its compatibility with the existing fleet, and relaxing the traffic managed by the 4F2 satellite, but it also adds up another 14 MHz of extended L-band spectrum to its spectrum capacity. Inmarsat is getting much needed flexibility and potential expansion on services including machine-to-machine (M2M) targeting utility and logistics, and their key product BGAN (Broadband Global Area Network) - global satellite telephony using portable terminals. Alphasat due to its innovative construction and technological advancement brings new power levels and next generation channelization and routing to improve the efficiency of transmissions and general performance.  
 
With Alphasat in place and the remaining nine satellites being operational, Inmarsat is already looking at a new generation of satellites to add to its fleet. Despite the pre-launch take up of their Ka-band capacity, the company still believes that offering services in L-band may still deliver around 50 per cent of revenue in the future. It is assumed that services where L-band is particularly strong like voice, M2M or small terminals will not demand enough data throughput to justify its movement to Ka-band.

Geography
Europe UK USA
Organization
ESA Inmarsat
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