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Norway. Marlink facilitates a first for Stena Line
Stena Line, one of the world’s largest ferry operators, has renewed and upgraded its contract with Marlink, the global provider of maritime satellite communications. As part of the renewed contract, Marlink will provide fully integrated satellite telephony access to 34 vessels and Internet access to 27 vessels. The system will position Stena Line as one of the first ferry operators to offer free WiFi Internet access for passengers.
Signing this important milestone contract with Niclas Ingeström, CIO, Stena Line IT services, Tore Morten Olsen, CEO, Marlink commented, “To provide free WiFi Internet access puts Stena in a strong competitive position. To achieve this they have purchased a significant upgrade of the system bandwidth, with access to 8 Mbps satellite closed user group capacity, which will give their passengers total contact throughout their voyage. We have worked with Stena for some years breaking new ground as we have developed unique services. They were our first customer to provide pay-per-use on our Internet@Sea Prepaid Surf service. We are delighted that we can continue to innovate with our partners and look forward to more exciting developments in the future.”
Marlink will upgrade the ship-to-shore network on the entire Stena Line fleet of fast ferries, traditional combi ferries, RoPax freight and passenger ferries and its pure cargo ships operating in Scandinavia and the North and Irish Seas. The fleet includes the world’s largest Superferry, Stena Hollandica, which sails between Hoek van Holland and Harwich. Marlink’s Sealink(TM) service will provide administration of LAN-LAN services between ships and land, TV reception in the Nordic region and company ship-to-shore networking with terrestrial back up and rerouting functionality at Marlink’s Eik Teleport. The service will offer 3rd party bandwidth access and IP management, SealinkT Prepaid Talk and Eik Internet access.
Stena Line carried over 15 million passengers in 2009 together with 3.3 million cars and 1.6 million freight units. The company has already commenced promotion of its latest market leading offering: Free WiFi Internet access and can now provide mobile coverage for the entire crossing between its busy Harwich (UK) to the Hook of Holland route. The new contract with Marlink is effective for the next 4 years.
Globalstar Takes Delivery of Three Additional Satellites From Thales Alenia Space as it Prepares for October Launch
Globalstar, Inc., a leading provider of mobile satellite voice and data services to businesses, government, and consumers, today announced it has taken delivery of three additional second-generation satellites from manufacturer Thales Alenia Space. The three new satellites are being shipped to the Baikonur Cosmodrome in Kazakhstan where they will join the three new satellites that were delivered in early August. All six new second-generation satellites will undergo preparations and testing for an October launch using the highly reliable Soyuz launch vehicle.
“Taking delivery of these three new satellites completes a milestone achievement for Globalstar as we can now proceed, on schedule, with preparations for next month’s inaugural second-generation satellite launch,” said Tony Navarra, President, Global Operations for Globalstar, Inc. “When our new constellation is fully deployed we will once again reliably provide the world’s finest quality mobile satellite voice and fastest mobile satellite handset data services to commercial and government customers in more than 120 countries. Combined with our affordable and award-winning suite of consumer retail SPOT products we will be uniquely positioned to offer the world’s most extensive lineup of high quality mobile satellite services to the broadest range of customers around the globe.”
A total of four launches carrying six satellites each will be conducted by launch services provider Arianespace using the Soyuz launch vehicle which has been used to successfully launch Globalstar satellites on eight previous occasions. The Company plans to integrate the 24 new second-generation satellites with the eight first-generation satellites that were launched in 2007, to form a 32 satellite constellation. The new constellation is expected to secure Globalstar’s space segment beyond 2025.
Once the six new Globalstar satellites are in operational orbit, the most immediate service improvement will benefit those customers who use the Company’s voice and Duplex data services. With each subsequent launch, these customers can expect a progressive return to the high reliability and service quality enjoyed before 2007.
Once fully deployed the advanced second-generation constellation and next-generation ground network are designed to provide Globalstar customers with enhanced services featuring increased data speeds of up to 256 kbps in a flexible Internet protocol multimedia subsystem (IMS) configuration. Products and services supported are expected to include: push-to-talk and multicasting, advanced messaging capabilities such as multimedia messaging or MMS, mobile video, geo-location services, multi-band and multi-mode handsets, and data devices with GPS integration. The second-generation satellites are also designed to support Globalstar’s current lineup of voice, Duplex and Simplex data products and services including the Company’s lineup of Spot retail consumer products.
Inmarsat’s profits are booming.
During an economic downturn most companies’ profits will take a beating whilst their managers have to batten down the metaphorical hatches to pull through what is a period of great uncertainty.
The few businesses which prosper during a recession are those whose characteristics are particularly well suited to hard times such as debt collectors, insolvency practitioners and discount retailers like Poundland.
So it is a bit of a surprise to find a high-technology business which has positively thrived during the recent global recession. In the last two years Inmarsat (LSE: ISAT), the provider of satellite telecommunications services, has managed to increase its turnover by 80% whilst its earnings per share have risen by two-thirds.
Recession. What recession?
Inmarsat’s performance is no fluke; the company is still growing strongly as its results for the first half of 2010 showed, with earnings per share increasing by over 40% compared to the same period in 2009.
If Inmarsat can produce this sort of performance during a recession, a big question is much better might the company’s performance be when the world economy starts to power ahead?
Naturally this means that Inmarsat’s shares aren’t cheap and this is reflected in a PE ratio of 31. But since Inmarsat’s sales, profits and dividend have doubled since it floated on the stockmarket in 2005, realistically you its shares wouldn’t be sitting in the bargain bin!
The business
Inmarsat owns and operates a network of eleven geostationary satellites through which its customers make satellite telephones calls and access the internet from almost anywhere on the surface of the Earth. Consequently its main customers are organisations which operate in what the company describes as “the remote environment market” such as the military, mining and oil companies, aid agencies and shipping (both commercial and recreational).
You can find more background information on Inmarsat in my article from last December.
In June Inmarsat started selling its first global handheld satellite telephone, the IsatPhone Pro, to good reviews. Intriguingly commentators on sailing websites have remarked that the IsatPhone Pro’s calling costs can sometimes be cheaper than those of some conventional mobile phone networks.
While the current range of satellite phones won’t replace most people’s mobile phones, if only because they won’t fit into your jeans or shirt pocket, it’s quite possible that they may directly compete with mobile phones one day.
Inmarsat’s satellite network represents a considerable barrier to entry for potential competitors as they would need to establish a similar network, or lease space on other satellites, which would take a lot of time to establish (and cost a lot). Consequently Inmarsat and its major competitors, Globalstar, Iridium and Thurya, have a big foothold in the market which makes it difficult for newcomers to dislodge them.
When comparing 2009 with 2008 you should bear in mind that Inmarsat’s 2008 after-tax earnings received a massive boost thanks to a deferred tax rebate which meant that the company ended up with a net tax receipt of $161.6 million. To get a clearer picture of the underlying business for 2009, it’s better to look at the adjusted diluted eps which increased from 39c from 32c
Inmarsat’s results for the first half of 2010 were released on 6 August and these were excellent, with sales up by 12% whilst diluted earnings per share rose by 41% and the interim dividend was increased by 10% to 14c.
Inmarsat’s shares performed well in the first half of 2010, rising from 700p in January to over 820p in July but they have fallen back with the rest of the market to the current price of about 670p, which is roughly where they stood last December.
The prospects
To keep its network up-to-date Inmarsat has to regularly launch new satellites to replace its older models. Its three earliest satellites, the Inmarsat-2 series, are expected to cease operating within the next two years, but Inmarsat is planning three more launches to complement its most recent satellite, Inmarsat-4 F3, which came into service in 2009.
A dilemma for investors is that Inmarsat’s shares have never been cheap. The historic P/E ratio (diluted eps) of 31 tells us that the stock market expects to see a substantial improvement in profits over the next few years (merely adequate results will not be enough for the market).
However the demand for satellite telecommunications should continue increase as the world becomes ever more interconnected, which means that Inmarsat’s profits are likely to grow substantially in the next few years. Consequently some investors are perfectly happy to pay up for what looks to be a very full share price and no doubt deters many others.
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