INMARSAT Orders 3 Astrium Satellites

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INMARSAT Orders 3 Astrium Satellites

Inmarsat awarded a US$700 million contract to Astrium to build and deliver three satellites for Inmarsat I-4, its fourth generation broadband satellite network. A

launch provider has not been announced. Inmarsat plans for the US$1.4 billion network to become operational during 2004. The remaining US$700 million budgeted for Inmarsat I-4 will be used for satellite ground stations, distribution and billing and support systems. Funding for the Inmarsat I-4 investment will come from a combination of internal cash flow and debt. Equity financing is also being considered.

The Inmarsat I-4 network will deliver Internet and intranet content and solutions, video-on-demand, video conferencing, fax, e-mail, voice and LAN access at speeds up to 432kbit/s. The new satellite network will be interoperable with Inmarsat's current I-3 satellite network. Data communications over Inmarsat's satellite network has grown by an average of 50 per cent year-on-year since 1995, and Inmarsat expects that data traffic will utilize 70 per cent of its current network by 2003.

Inmarsat is a US$400 million revenue satellite consortium of 87 PTT Agencies (Post, Telephone and Telegraph) and private telecommunication companies. (COMSAT has represented the signatory interests of the United States.) The International Maritime Satellite Organization (INMARSAT) was established in 1979, and began providing satellite communication to maritime interests in 1982. The name of the organization was later changed to International Mobile Satellite Organization to reflect the expansion of mobile satellite services to a diverse set of ground and aviation applications, in addition to the marine users. In 1995 Inmarsat spun off ICO Global Communications in a first step towards privatization - an attempt which has struggled with bankruptcy; though ICO is expected to remerge soon under new ownership, management and with a new, redirected business plan. Inmarsat is on a schedule for privatization, which includes mechanisms to sustain the mobile communication interests of lesser-developed nations.

Astrium was formed at the beginning of 2000 with the merger of Matra Marconi Space and DaimlerChrysler Aerospace (DASA), Matra Marconi Space being the builder of the Eurostar line of satellite busses. The European Aeronautic, Defense and Space Company (EADS), will hold 75.5% of Astrium, with BAE Systems (which acquired Marconi Electronic Systems) holding the other 24.5%. Astrium has over 8,000 employees and annual revenues of EURO 2.25 billion. Astrium builds launch vehicles, earth observation systems and telecommunication satellites for commercial, civilian and military users.

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May 11, 2000