Find us on Google+

Maritime satcom consolidation continues with SpeedCast purchase of Eutelsat’s WINS

Pierre-Jean Beylier
CEO, SpeedCast. Credit: SpaceNews/Kate Patterson.

PARIS – Satellite fleet operator Eutelsat on Aug. 8 said it had sold its 70 percent stake in maritime satellite communications provider WINS Ltd to SpeedCast International for 60 million euros ($66.9 million) in cash.

The deal is the latest in the long-expected consolidation of the maritime satellite communications market and comes just a week after Apax Partners-owned Marlink announced the acquisition of Telemar.

Apax said the enlarged company would have annual revenues of $450 million and a work force of more than 800 and would serve one-third of the global maritime vessel fleet including merchant vessels, cruise and ferry operators, yachting and fishing markets.

Apax purchased Marlink in June from Airbus Defence and Space, which had previously announced it would sell its commercial satellite services business but retain the military services piece.

“Leveraging our two well-established brands, Marlink and Telemar will create the world’s leading martime communications, digital solutions and servicing company,” Marlink Chief Executive Erik Ceuppens said in a statement announcing the transaction.

Paris-based Eutelsat announced in May that, faced with near-term market headwinds that forced it to revise downward its revenue and profit forecasts, it would streamline its portfolio to focus on generating cash.

In an Aug. 8 statement, Eutelsat said : “In a consolidating market, the transaction will enable WINS to benefit from the scale of a leading global network and satellite communications service provider. The sale of Eutelsat’s stake in WINS is consistent with its strategy of streamlining its asset portfolio in order to maximize free-cash-flow generation.”

SpeedCast: WINS gets us passenger fleets, and Germany

SpeedCast, which has been on an acquisitions spree for several years now, said it would finance the WINS purchase by raising at least 62.1 million Australian dollars ($47.2 million) in new equity. SpeedCast is traded on the Australian Stock Exchange.

SpeedCast Chief Executive Perre-Jean Beylier said WINS gives SpeedCast a foothold in the German market and strengthens SpeedCast’s position in the cruise market.

“Passenger-carrying vessels, particularly cruise vessels, are an attractive growth segment and a natural extension of SpeedCast’s existing maritime business,” Beylier said in a statement. “Coupled with our strong presence in Asia, where the cruise industry is expected to benefit from the emergence of a sizable middle class, and also our presence in Miami, the cruise industry’s world capital, this acquisition will facilitate our development.”

Beylier said the WINS addition advances SpeedCast closer to its goal of being one of the top three global providers of maritime services. He said Germany is “a key hub for merchant shipping in Europe and a market primed for accelerated VSAT adoption.”

More mergers/acquisitions expected in maritime

Expect more M&A, SpeedCast said:

“In addition to organic growth opportunities for SpeedCast, the M&A pipeline remains strong and is expected to present further opportunities amid an accelerating consolidation trend in our industry, and a market that remains fragmented.”

Maritime VSATs, small satellite terminals operating mainly in Ku-band with antennas pointed to many of the large fixed satellite service operators’ satellites, has been a fast-growing business in recent years, mirroring the growth in aeronautical broadband to commercial airline fleets.

The big Ku-band fleet operators, including Intelsat, SES and Sky Perfect JSat, have all positioned themselves to attract this market despite the drop in average transponder-lease prices.

Inmarsat of London, the biggest provider of mobile satellite links, has contracted with maritime fleet satellite service providers with the goal of transitioning them from their current Ku-band systems to Inmarsat’s Global Xpress, which is in Ka-band.

For all these satellite fleet operators, the question is what effect the maritime consolidation – which has include aeronautical broadband companies purchasing maritime service providers – will have on pricing in general. The introduction of high-throughput satellites with dozens, or hundreds, of small spot beams to provide the reuse of radio frequency is already putting pressure on transponder prices.

Inmarsat: We’ll be flexible on pricing, and beware the Intelsat effect

Inmarsat Chief Financial Officer Tony Bates acknowledged, in an Aug. 4 conference call with investors, that Inmarsat’s large-volume contracts with the likes of Marlink and SpeedCast would need to adjust to market conditions.

“[W]e clearly can’t do long-term deals … that are disconnected from the marketplace,” Bates said. “In practice our wholesale market pricing is something that is dynamic… a function of what’s going on out there.”

Bates referred to market studies showing that, in part due to lower prices, the maritime satellite communications market could double in size in the next five years, meaning the lower per-megabit cost of satellite bandwidth could be offset by a growing overall market demand.

“[O]ver the medium-term, what does that mean for pricing, wholesale or retail price? That actually is quite hard to call at this point in time. The general drift is perhaps downwards, but the question really is whether it’s downwards in low single-digit percentages or something more fundamental.”

Bates said much will depend on how each satellite fleet operator’s strategy.

“Remember, Intelsat is sitting behind some of this, and Intelsat therefore [is] providing some of this capacity. [Market pricing] may be impacted by Intelsat’s, shall we say, cash and pricing strategy. So you tell me how that’s going to play out over the next five years.”

SpaceNews.com

Source: Here you’ll find lots of information about International Space Station and the Space Shuttle. Also we have facts about the the planets, solar system, and planets in our solar system. Learn about new planets and outer space Space News

by
Maritime satcom consolidation continues with SpeedCast purchase of Eutelsat’s WINS

Posted in Space News and tagged by with no comments yet.

Leave a Reply

Your email address will not be published. Required fields are marked *