[Satellite News 03-19-10] Leaders from the five largest MSS companies debated the form and function of the mobile industry and praised the U.S. Federal Communication Commission’s (FCC) recent broadband plan during Wednesday’s MSUA-7 panel, “New Solutions and New Opportunities: The MSS CEOs Speak Out.”
   It has been a busy year of developments for each component sector of the MSS industry, as illustrated by the responses given when moderator and industry analyst Tim Farrar asked panel executives to summarize their’ developments.
   Inmarsat CEO Andrew Sukawaty said his company sits comfortably in the position of a market leader. “This year, we launched a new satellite constellation and a new platform of mobile data services. We’re putting our third satellite into position and our services in maritime can now transfer up to half a megabit in speed. We closed the deal with Stratos, which we believe is the best distributor in the MSS market, in April, so we can’t complain,” he said.
   Globalstar Chairman Jay Monroe, who shocked the MSS industry last year with a major Coface funding announcement, said his company had three major areas of development. “About 120 days from now, we’ll be sending new satellites to Baikonur. Secondly, Globalstar is evolving into a consumer products company. That differentiates us from others on this panel. Finally, we are rolling out with a WiMax platform in order to become a rural broadband vendor in the near future,” said Monroe.
   Thuraya CTO Ali Saeed Al Mazrooei said his company focused on satisfying vertical markets in the Middle East and Asia. “Our competitors keep us busy and keep the pressure on us to innovate. For Thuraya, the year has not only been about coverage, it has been about customization. The customer vertical market has a specific requirement and we’ve spent the last year meeting these requirements,” he said.
   Iridium CEO Matt Desch, sitting on his fourth MSS panel, highlighted the economic environment. “This last year was particularly interesting. It was a tough year for business and a test for the MSS industry. For Iridium, the main development this year was going public last year. The move gave us a strong balance sheet at the end of the year and further developed our plans for Iridium Next,” he said.
  TerreStar Networks President and CEO Jeffrey Epstein said his company ended the year with its first satellite, TerreStar-1, in orbit and, most importantly, paid for. The satellite will power TerreStar’s dual-mode handset, equipped with an AT&T SIM card. “After a long testing period, we made our first dual-mode handset call in July from Las Vegas. It has been an excellent year,” Epstein said.
  SATELLITE 2010’s panel was two CEOs short of last year’s panel. Orbcomm CEO Marc Eisenberg and ICO CEO Michael Corkery were absent, which sparked debate on the status and size of the MSS market.
   “Is there enough room? To answer that, it is important to remember that satellite is a niche market. When you say ‘big market’ you mean ‘mass market’ and then you’re talking about providing indoor coverage, roaming and penetration. That requires overcoming physics, satellite manufacturers lowering their costs and taking less time to build satellites in order to keep up with the technology,” said Al Mazrooei.
   Monroe said there is plenty of room for competition. “Everybody’s business plan on this panel is different and [there is] room for everyone to make money. I think Globalstar is trying to do something fundamentally different from Iridium or Inmarsat. We went after our financing in a way that made sense in an environment where the credit markets ceased to function for almost two years. I think every one of these companies owes the ECAs a great deal of gratitude,” he said.
   Sukawaty referenced Globalstar’s funding — which competitors last year labeled a “bailout” but now praise as the only logical way to finance new satellites — as a litmus test for the industry. “I’m not attacking competitors here, but these issues are about proper business models and capitalizing on opportunity. I would like to thank Jay for breaking into that financing market, but we don’t want to have a subprime crisis in the satellite industry. Look at ICO; they are not here this year. Anyone who is looking to finance satellites should look at the way Globalstar financed their spacecraft. You would be foolish not to,” he said.
   The MSS leaders were then asked to comment on the FCC’s new broadband plan, which involves allocation of the ATC spectrum and prioritizes wired and wireless broadband access. “For the MSS industry, the FCC plan is a great development. We should all welcome it as great public policy. Apple iPhones and other Smartphones are driving up demand for spectrum, and there is not enough spectrum out there. Mobile operators at one time — and I was one of them — opposed ATC. The equation is simple for the operator, the more spectrum you give an operator, the more that they can work with,” said Sukawaty.
   Monroe agreed. “We think that anything the FCC does to improve broadband service to the public is a good thing. From our perspective, what the FCC does in the U.S., other international regulatory bodies will tend to follow and implement,” he said.
   Desch, while maintaining that the broadband plan was well-written in the way it repurposes spectrum and value for taxpayers, said he would not shift his opinion on ATC so suddenly. “I think the idea of ATC suddenly transforming back into a good thing again is a misnomer. We have to be careful. I think the plan, more than anything else, shows that ATC has failed as a business concept. It’s been entrenched in handheld devices and it didn’t work out because it is too messy. Nobody has been eating that dog food over the last eight years,” he said.   
   Desch’s dog food comment drew immediate criticism from Monroe and Epstein. “We like the dog food, and we’re eating it daily. ATC is a good business for us,” said Monroe.
   “I agree with Jay, and we think the ATC component market is valuable and saves lives, especially useful for emergency and military users. ATC creates a lot of value for Americans,” said Epstein.
   ATC licensing fees, which would emphasize bandwidth management in the FCC’s broadband plan, were hailed by Sukawaty as a way to level the playing field for satellite. “It puts more pressure on satellite’s competitors. License fees should be charged. That is what we’re seeing in Europe. I think it is fair and reasonable. However, anything beyond that would be excessive and would kill business,” he said.