Inmarsat’s acquisition of a 19 percent stake in SkyWave Mobile Communications in April was a “small investment” for the company in its efforts to expand Inmarsat’s presence in the satellite low data rate (SLDR) market, said Inmarsat COO Perry Melton.
    Inmarsat, realizing that the SLDR services sector is unfamiliar territory for the mobile satellite services provider, is preparing for a change of pace in a move that could bring a lot of attention to the machine-to-machine market, Melton said.

Via Satellite: What motivated Inmarsat to make this investment in SkyWave?

Melton: In terms of the LDR market and the applicability of satellite, we are keen to promote an increased takeup and wider market penetration of these capabilities. This minority investment in SkyWave is about fuelling some consolidation and driving the development of Inmarsat’s services to a next generation capability. This strengthens our position in providing more capable services, not only now but in the future. point. We have just finished repositioning our Inmarsat-4 satellites, which will provide services past 2023. We see a long-term view from companies that are investing in SLDR or other services. They want a network that will be around for a long time.

Via Satellite: If Inmarsat is so confident, why has it taken only a 19 percent stake and not acquired the company?

Melton: We don’t necessarily need to have total control. Our desire is to facilitate or enable the next step change in the market, which their acquisition of the GlobalWave assets will provide. This provides scale. This is a consolidation of two relatively large players within the SLDR market. It provides a platform to take an existing customer base and invest in next generation capabilities. It also delivers the economies of scale — smaller, cheaper hardware — that allows them to grow the marketplace.

Via Satellite: Does Inmarsat plan to augment SkyWave’s SLDR services?

Melton: What customers need is some consolidation at the service provision level, where you can get the end-to-end solution delivered in a more efficient way and get access to a wider customer base. This investment will facilitate that consolidation. We are backing an organization that can champion those capabilities and drive this next generation of growth.

Via Satellite: Does the current economic situation make Inmarsat more cautious in this market?

Melton: There may be certain market segments that are weaker, but there are others that are quite strong. If you look at the increased interest in security and tracking, whether it is containers crossing the oceans or by land across the United States, certain requirements are increasing. We are seeing growth. Even Iridium is reporting growth. Their SLDR market is showing growth even though it may not be a high revenue market for them. There are some market segments that are quite resilient because there are certain drivers.