MSS CEOs Differ on Direction of Industry
Mobile satellite service operators have widely disparate views on the evolution of the MSS industry, CEOs said on a panel at the Satellite 2011 conference in Washington on Wednesday. Each of the companies pointed to different visions they said would drive growth in the industry.
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Globalstar CEO Jay Monroe said he’s hoping for a mass-market business where subscribers are counted in the millions rather than thousands, something that’s been elusive in the sector. A drop in pricing will help bring about that development, he said. “People want to be connected today” and if “we can drive down price” they can afford to be connected over MSS, he said. For instance, an MSS product that will allow consumers to keep track of their children that is also sold at a Wal-Mart would help mass adoption, he said. A $500 MSS device, which is on the low-end of current devices, is still expensive to have a real appeal, said Monroe. He doesn’t expect Open Range, which had used Globalstar spectrum to sell terrestrial wireless services, to continue to have a relationship with Globalstar. Open Range recently said it would begin using LightSquared’s spectrum.
Inmarsat CEO Andy Sukawaty said he has somewhat more tempered hopes for customer volume. While “we all hope the pie grows,” he’s a little “less bullish” on how big that pie will get, he said. Bandwidth-intensive applications and needs will continue to grow, and Inmarsat will be ready to provide service for its customers, he said. Sukawaty pointed the company’s coming Ka-band Inmarsat-5 constellation as a way to take advantage of that trend. He voiced some skepticism over Iridium’s business plans, saying the reliance on a low-earth orbit constellation adds difficulty on getting a return on capital.
"I always appreciate the free financial advice,” said Iridium CEO Matt Desch, in response to Sukawaty. Desch said he continues to believe in Iridium’s business model and ability to add unique value. Iridium expects to see continued growth in the machine-to-machine market, he said.
Desch was dismissive of LightSquared’s continued role as an MSS player, wondering why the company wasn’t represented on the panel and why it had a big role in the CTIA conference next week. LightSquared’s movements have become a “major distraction” away from true MSS providers, rather than a real competitive threat, and its efforts have nothing to do with MSS spectrum, said Desch.
Sukawaty, whose company will receive millions of dollars from LightSquared to allow it to use Inmarsat spectrum, was largely supportive of the venture. “LightSquared has traction at [the] moment” and “if it develops it will benefit all of us,” he said. LightSquared has been “bold enough to sink money in and to implement the concept,” he said. Although interference with GPS receivers seems to continue to be an issue, it’s a “manageable” one, he said. Monroe said he believes the LightSquared/GPS interference concerns will be figured out.