Inmarsat’s shares reached record highs at the end of December, not long after the British operator placed a US$600m order with Airbus Defence and Space for two new all-electric satellites. The British operator has also confirmed plans to launch its fourth Global Xpress satellite, initially ordered as a backup, later this year to provide the constellation with extra capacity.
Inmarsat’s (LON:ISAT) shares reached record highs at the end of December, not long after the British operator placed a US$600m order with Airbus Defence and Space for two new all-electric satellites.
This week Inmarsat also confirmed that its next generation Global Xpress constellation started providing global commercial services in December, after the third Inmarsat-5 satellite was orbited by ILS’s Proton on its August return to flight.
Plans to launch a fully global GX service had suffered a number of delays due to Proton launch failures in recent years.
Inmarsat has previously said it expects being able to offer worldwide coverage would “catalyse material growth in GX revenue through 2016”.
Investors appear upbeat on the operator’s prospects, with the company’s stock reaching its highest ever price of £11.53 on 30 December. In addition to more revenues for GX, a research note from Morgan Stanley published on 17 December was bullish on the prospects for earnings generated from Inmarsat’s in-flight broadband business, which it expected to add at least £1.90 to the stock.
The note set a target price of £14 for Inmarsat stock and also noted the extra GX capacity set to come online later in 2016. The fourth GX bird, Inmarsat-5 F4, is close to being completed by US manufacturer Boeing. Originally designed as a backup to the main three satellites, Inmarsat has announced its intention to use it to provide extra capacity for the constellation now that the other three birds have reached their orbits.
This week the company said that Inmarsat-5 F4 is “now likely to be launched in the second of half 2016 in order to provide additional GX network capacity”, without specifying what geography it would cover. The company previously said that different customers had expressed interest in F4 being placed over areas they serve.
Inmarsat has a slot booked in later this year on SpaceX’s Falcon Heavy that would be used to launch F4. The heavy-lift rocket is yet to take its maiden voyage.
Morgan Stanley estimated the extra capacity from F4 could net Inmarsat another US$100m in annual revenue from 2017.
All-electrics to replace I-4s
Inmarsat will also gain more capacity when the first two all-electric Airbus DS-made I-6 satellites come online.
Designed to replace the first two I-4s launched in 2005, Inmarsat said the two I-6s will be in orbit when the I-4s end their operational lives between 2021 and 2024, with I-6 F1 due to be delivered by 2020.
In addition to an L-band payload to replace the services provided by the I-4s, the first two sixth-generation birds will have a second payload providing Ka-band services to further increase GX capacity, making them Inmarsat’s first dual-payload spacecraft.
The space for a second payload on the I-6s, based on Airbus DS’s Eurostar E3000e variant, is made possible by the reduction in mass of electric propulsion technology compared with traditional chemical thrusters.
All-electrics take longer to reach their orbital slots, and Airbus DS said that in the case of I-6 F1 it would reach geostationary in four to six months, depending on the launcher used. Inmarsat has not selected a launch provider for the first I-6, saying it has a number of options regarding potential launch partners for the satellites.
Inmarsat declined to comment on how it would finance the US$600m cost of the two I-6s, and said it would provide more information on the new fleet in the coming months.
Rupert Pearce (pictured), Inmarsat’s CEO, said: “The new satellites will provide significantly greater L-band capacity and will be capable of supporting a new generation of more advanced services.”
“The Ka-band co-payload adds depth to the breadth of the unique capabilities of our Global Xpress constellation, which now spans the world.
“We are confident that demand for GX will deliver incremental revenue opportunities, more than justifying our further investment in extending the capabilities of our Ka-band services.”
François Auque, head of space systems at Airbus DS, said: “This mission for our next generation digitally processed payload represents a step change in capability and capacity.
“The spacecraft will complement and enhance the L-band services offered by the Airbus Defence and Space-built Inmarsat-4 and Alphasat satellites, and embark a Ka-band mission to augment Inmarsat’s globally available high-speed broadband service – Global Xpress.”
An Airbus DS spokesperson said it had seen increased demand for its all-electrics, with them accounting for six of the nine telecoms satellites the manufacturer had been contracted to build in the last 18 months.
“Operators now have the choice of going for all electric propulsion and therefore a potential reduced launch cost due to reduced mass, or the same mass, but using the weight saved by choosing electric to build in a second payload, giving increased capability and capacity,” the spokesperson added. “We of course offer both options to suit our customers.”
