Epic stuff – James Collett on Intelsat, Inmarsat and what really matters in maritime
To leafy Chiswick in West London and the offices of Intelsat for a wide-ranging conversation with James Collett, late of Inmarsat and now Director of Mobility Services at Intelsat, charged with building its rival’s maritime business on promising foundations.
In a quiet period ahead of its planned IPO, we were obliged to steer clear of forward looking statements and much as in conversations with Inmarsat, there was no firm detail on costs of the system and its throughput. But that didn’t prevent us from discussing the merits of Global Xpress as well as EPICNG, Intelsat’s HTS programme that offers GX its most concerted competition.
It became clear as we talk that Intelsat’s ambitions are to move beyond the high end segments and attack the mainstream maritime market too. Also that Intelsat sees its DP and ISP relationships as key to success in the maritime market. Also clear was that Collett personally has little time for the back and forth that seems to obsess some satcom commentators.
Indeed, his understanding of Inmarsat’s business as well his plans for Intelsat speaks volumes for what will be an interesting couple of years for satellite operators with a strong, scalable offer and a firm grasp on the realities of the market.
Maritime Insight: Let’s talk about Intelsat and I guess Intelsat EpicNG is the thing that is of interest as an HTS solution. Do you see it as a competitor to Global Xpress?
James Collett “I think it’s fair to say that our customers will build solutions that are competitive to Global Xpress by leveraging Epic. However it’s not in itself a competitive response to Global Xpress – it’s an evolution of our technology, the embracing of High Throughput Satellite by Intelsat, and is really a route for us to grow with our customers in the regions we serve today. We worked closely with our customers to develop this platform.
“There are obviously a lot of similarities because we are in the same sectors as Inmarsat. We see the same drivers, we see the same opportunities, we have access to the same space technology as they do, and we are also continually in an investment phase in terms of replenishing our fleet.”
You are certainly both on the same trend in terms of putting up High Throughput Satellite (HTS) services?
“Yes, HTS is what everyone is talking about but we’ve come at it in very different ways. In L-band, and typically for Inmarsat, it’s been about looking into the future, and creating an offering that you think is going to have wide appeal. The FSS operator’s approach is more around what demand do I see from my customers today, where are my customers heading, and how can I continue to grow with them?
“The deals that we’ve announced on EPIC – MTN for cruise and Harris CapRock for oil and gas – are both based on meeting the customer’s growing future requirements with the Epic network. Outside of maritime and offshore, we have announced Panasonic Avionics as a leading aviation service provider for whom Epic technology will allow them to reach the next level with their customers.
“Having those customers leading from the front really solidified our case for going ahead with this technology. Subsequently it’s become a question of how do we make the capability enabled by Epic more accessible in the marketplace, and how do we drive that capability to the maritime users who we think will benefit most from those new services.”
So you’re in a similar position to the old Inmarsat model if I can call it that, in that your partners act as DPs or ISPs, adding value to your signal?
“We feel we have always benefited from the richness and the diversity that the distributors of the Intelsat service provide to maritime users. Intelsat has traditionally been seen as a fixed satellite services operator where the value-add has been around teleports and our IntelsatOne terrestrial network and the value-added services that those distributors offer. Our model for Epic allows those integrators and distributors to carry on in that mode of working.
“We feel that it’s not our skill and our competence to define the specific services that a maritime end user should be buying. Similarly we won’t define the price points at which they should be sold. We’ve clearly got distributors that are far more expert in that, whether it’s Astrium Services, MTN, Harris CapRock, Globe Wireless or KVH, who are all experts in that domain, and whose business is absolutely built on differentiation.
“That’s the interesting bit for me and where the Inmarsat and the Intelsat paths are very divergent. There have been observations that with Global Xpress, the latitude and opportunity for a distributor is being squeezed since you’ve got retail prices being set by the wholesaler. You’ve also got a flattening of the distribution channel in that players who previously were second tier are now effectively direct to Inmarsat.
“On top of all that you’ve now got value-added solutions being provided by the satellite operator, so I think some people in the value chain will be asking ‘what’s left for me?’ If a distributor has a choice between selling one service which makes them a fixed margin, with another that gives them more flexibility over the contribution it makes, then there’s no surprise which one they will push.”
Intelsat has agreements in the very high end segments where there is big demand from energy and offshore cruiseships – but can you scale it down in effect, for mainstream merchant shipping?
“Those are customers and segments that we are very strong in today, and ones in which we see further growth. At the same time we’re not ignoring the market opportunity that exists in commercial shipping, because that is largely a new market for Ku-band VSAT. There’s obviously been some well publicised incursions into that, such as the Maersk, Ericsson/Globecomm deal.
“We do see more opportunity coming in that area. So I don’t think there is this natural segmentation in the market which will keep us apart, I think just as Inmarsat is keen to make it clear that they’re coming after the VSAT market, then Ku-band VSAT has been after the Inmarsat market for a long time.”