[Satellite News 11-28-08] JSAT Mobile CEO, Kei Shibuya, said the reasons behind his company’s strategic move to team up with Stratos Global to form a company targeting the MSS space was based around the company’s history in the FSS sector.
    “We did not have the sales and marketing expertise for MSS,” Shibuya told Satellite News. “We consider MSS a completely new market for us. We see it as a good market to expand the JSAT satellite business. We are aiming to expand the business. Inmarsat is a champion of the MSS business. The FSS business is very much a mature business in Japan. I think there will be little room for growth here in Japan. That is why we have tried to enter into the MSS field. This is very important for JSAT.”
    With little room for growth in its traditional FSS market, JSAT Mobile believes it can boost its revenues and profits through MSS services. The joint company brings Stratos’ portfolio of mobile satellite services including Inmarsat and Iridium services, to the Japanese market.
    JSAT’s plans in the mobile market were further boosted when it was announced earlier this month that Furuno Electric and Japan Radio have invested in JSAT Mobile. The two companies, leading marine electronics manufacturers, will each assume a 10 percent share in JSAT Mobile.
    Stratos president and CEO Jim Parm commented, “The addition of Furuno and JRC as shareholders is further proof that JSAT Mobile is dedicated to providing the Japanese market with the latest mobile satellite services and strong local support.”
    In terms of how much the market is worth and when JSAT Mobile will be profitable, Shibuya said, “The Japanese MSS market targeted by Inmarsat services is expected be worth Yen 18.8billion ($188 million) in 2013. JSAT Mobile will be profitable from 2010 onwards.”
    Shibuya said that leveraging Stratos’s experience will be key in making a success of what is a new market for JSAT. “We have specialized in FSS. We have strong experience here. We need to gather experience in MSS. We need very big help here, so that is why we have partnered with Stratos. Stratos is a number one distributor of Inmarsat services. We need their know-how. At the same time, to grow any satellite service, we need a telecoms licence from the telecoms authority in Japan. JSAT has a lot of experience in this field. We think we can very easily gain a license from the telecoms authority. It is a combination of acquiring the license and gaining the know-how,” he said.
    Gaining penetration within its target market of the government and maritime customers will be a priority for JSAT Mobile. According to Shibuya, “[JSAT’s] main markets are maritime and government. JSAT has very strong connections in terms of the Japanese government such as the Coast Guard, the national police agencies, as they use our Ku-band services. We have to set-up these sales forces. Another challenge is to penetrate the new ship owners market. We need very strong strategic partners here. We will start conversations with Japanese government offices in order to respond to their demand. JSAT has had long experience in the government sector. We already have links with the government sector,” noted Shibuya.
    However, Shibuya admits it will take time to get the business up and running, due to licensing issues. “Over the next 12 months, in the Japanese market, we need to gain the license to start the service. You can start the business overseas, but we are a Japanese company, so we need a licence to sell our services to the home market,” he said. “It will take about six months to gain the license. We expect to gain the license in either February or March next year. The next six months is a preparation period. Over the next few months, we want to establish a network of local distributors.”
    Shibuya also believes the company can expand outside of Japan also. “The first priority is the Japanese market. We are looking to work with Japanese companies. The Japanese market is not so big for these services, so we will pursue the international market as well, particularly Asia,” he said.
    A lack of competition in the MSS market in Japan, according to Shibuya, means the market is ripe for expansion. Shibuya said that until now, KDDI has dominated these services. “I don’t think the Japanese market has really reached its potential due to the fact KDDI has had a monopoly. I think there will be a lot of room to introduce these services in the Japanese market. I think mainly shipping companies will use these services,” he said, adding that he is optimistic about bringing BGAN services to Japan, which will be made available next year.
    JSAT aims to offer an attractive portfolio of services to Japanese business and government customers. “We want to be a one-stop shop service provider,” said Shibuya. “We can provide Inmarsat services, as well as provide Ku-band, as well as supply services based on X-band capacity to the military … Inmarsat is a giant in the field. Most ships use an Inmarsat service. Ku-band is a new service. That is why we need a base in the MSS field,” he said.
    Shibuya does not believe a possible acquisition of Inmarsat by the U.S. hedge fund company, Harbinger, will impact its business in Japan. “We have had a similar experience when working with Intelsat, who have had different owners. Our original partnership was with PanAmSat. Stratos will be acquired by Inmarsat next year when that deal closes,” he said.