[Satellite TODAY 08-18-10] Avanti signed contract for U.K.-based Computerlinks to become the first distributor of Avanti’s Business Internet Continuity (BIC) service, Avanti announced Aug. 16.
     Under the three-year contract, valued at 4.5 million British pounds ($7 million), Computerlinks will enable its more than 5,000 channel partners to provide the BIC service as a disaster recovery communications solution.
     “This contract brings an important new revenue stream to Avanti and our first major sale of our patented BIC product to a large and highly expert customer,” Avanti CEO David Williams said in a statement. “With the increasing importance of cloud computing in the enterprise market, simple, cost-effective and scalable business continuity solutions will be in demand across the world. Avanti’s patented BIC product has potential application for almost every connected business in the world and takes satellite broadband beyond core rural and enterprise markets."
     Avanti plans to place its Hylas-1 satellite in orbit before the end of the year, and the Hylas-2 and Hylas-3 satellites are scheduled to be launched within two to three years.
     Nick Bell, a satellite equity analyst at Jefferies International, is upbeat about Avanti’s growth prospects. “Demand for Ka-band capacity has the potential to grow very rapidly driven by applications such as broadband access, military and mobile backhaul. Avanti has first mover advantages in Europe, Africa and [the Middle East], and this has now been extended to the very rapidly developing Brazillian market with Hylas-3,” Bell said in an Aug. 12 research note.
     Bell believes there could be some interesting opportunities for Avanti in Latin America. “The Brazilian telecoms market is very dynamic and is attracting a lot of investment (recent deals include Telefonica increasing its stake in Vivo for 7.5 billion euros (($9.6 billion)), Portugal Telecom paying $4.8 billion for a stake in Oi, and Vivendi acquiring GVT on a 3 billion euros valuation). Low fixed-line penetration (21.6 percent totaling 41 million lines) combined with government aims to make broadband access ubiquitous means Ka-band satellite could play an important role given its cost advantage. In addition, capacity is likely to be sold for mobile backhaul and corporate VSAT usage. We expect the steerable beam, which is able to provide coverage anywhere visible on the Earth’s surface from 33.5 degree West, will attract interest from governments for military use.”
     Bell also said Inmarsat’s investment in a Ka-band network was a further validation of Avanti’s approach in Ka-band. “We view last week’s announcement from Inmarsat that it will investment $1.2 billion in three Ka-band satellites to provide global mobile services as a major endorsement of the technology. It also highlights the value of Avanti’s 14 [gigahertz] of licensed spectrum and its three geostationary orbital slots, both of which are finite resources. The three satellites should be operational by 2014, and given Inmarsat’s core maritime customer base, a lot of the capacity will be used to provide coverage over the main shipping lanes. It will not be competing with Avanti in providing capacity for broadband access to homes and [small and medium enterprises], although there may be some overlap in the military applications.”