[Satellite TODAY 03-07-13] Pricing and service package changes implemented by MSS operator Inmarsat in January and May 2012, along with increased take-up and usage of FleetBroadband terminals, helped the company grow its maritime data revenues and offset losses in maritime voice revenues, according to the company’s preliminary 2012 full-year results posted March 7.

   Inmarsat CEO Rupert Pearce said the company experienced a significant migration of end users from usage-based pricing plans to subscription-based plans with higher monthly fees and inclusive usage. “At the end of the year we estimate that nearly half of our FleetBroadband revenues now come from recurring customer subscriptions,” Pearce said in a statement. “We have also seen strong terminal activations and increasing average revenue per user (ARPU). During 2012, we added 7,980 FleetBroadband subscribers, of which 1,547 were added in the fourth quarter. Despite the overall revenue growth reported, customer migration to FleetBroadband from certain older services continues to be a constraint on our rate of revenue growth as the price of FleetBroadband services is typically substantially lower than the price of equivalent services on the terminals being replaced.”

   Inmarsat maritime voice revenues have been negatively impacted by the substitution effect of voice usage moving to email and Voice Over IP, along with product mix changes as its users transition from older services to its new, lower-priced FleetBroadband service.

   Excluding the impact of its investment in failed 4G LTE wholesale network provider LightSquared, the MSS operator turned in stronger than expected full-year 2012 results. Inmarsat’s total full-year revenue of $1.27 billion was up 6 percent from 2011, with wholesale maritime MSS revenues jumping 15 percent during the same period of time. Inmarsat MSS terminal activations were up 14 percent from the previous year, with strong service take-up in its FleetBroadband, XpressLink and IsatPhone Pro offerings.

   Pearce added that the operator also continues to maintain confidence in the potential of its soon-to-launch Global Xpress constellation.

   “We are making progress across a range of activities that strengthen our core franchise and bring us closer to addressing new markets with our Global Xpress services,” said Pearce. “Significant technical and commercial progress with our Global Xpress program means we expect to begin network deployment in 2013 as planned … We remain on track for a first satellite deployment before the end of the year and the completion of global coverage in 2014.  Our expectations as to total program capital costs remain unchanged at $1.2 billion. We also expect the launch of Alphasat, our latest L-band satellite, to occur in the third quarter of 2013.” 

   Inmarsat saw encouraging take-up of its XpressLink service – the hybrid L- and Ku-band maritime service that will transition customers to Global Xpress. “While 2012 was the first year of availability, XpressLink has gained rapid market acceptance and has allowed us to increase our share in the maritime VSAT market,” said Pearce. “At the end of the year we had an installed base of 1,186 ships using our VSAT services, including more than 330 ships using XpressLink.  Revenue generated by new XpressLink customers impacts revenue and margin reported at both the Inmarsat Global and Inmarsat Solutions reporting segments.” 

   Inmarsat also reported a decline in land mobile sector data revenues, but expected the drop due to the combination of troop withdrawals from Afghanistan and the comparative impact of significant event revenue in 2011. 

   “We estimate that Afghanistan and events in North Africa and Japan in 2011 contributed $30 million more revenue year-over-year, compared with 2012, of which approximately $4 million more revenue was in the fourth quarter 2011,” said Pearce. “Underlying growth in land data revenue, excluding Afghanistan and other events was positive and driven by growth in the number of BGAN subscribers.”   

   Take-up of the IsatPhone Pro service has remained strong for Inmarsat, which ended the year with more than 84,000 active subscribers and saw net additions of over 13,000 subscribers during the fourth quarter.