Inmarsat, boxed in by attacks from all sides?

Ben Ellison

Ben Ellison

Panbo editor, publisher & chief bottlewasher from 4/2005 until 8/2018, and now pleased to have Ben Stein as a very able publisher, webmaster, and editing colleague. Please don't regard him as an "expert"; he's getting quite old and thinks that "fadiddling fumble-putz" is a more accurate description.

18 Responses

  1. John Dark says:

    Hi Ben,
    Great article – yes the pricing in the industry is very complex. The one takeaway regardless of which solution you choose is that some sort of satellite network manager is required to provide compression, firewall, and perhaps failover service. We’ve seen a lot of activity since launching our new range of routers and services for VSAT, FBB and OpenPort devices at http://www.redportglobal.com.
    By the way, in the narrowband space, we wrote a short blog post comparing data pricing between Iridium and IsatPhone here: http://web.globalmarinenet.com/blog/bid/111695/IsatPhone-or-Iridium-Cheaper-for-Gribs-at-Sea-with-Mac-iOS
    Hope you find it useful.

  2. M. Dacey says:

    And people ask me why I bought an ICOM M-802.
    A satphone would be great to take into the life raft (better have a GPS or an EPIRB/GPS as well, of course), and I would, favouring the belt-and-suspenders approach, appreciate a way to grab GRIB files when SSB propagation is sub-par.
    But most e-mails could wait, really. And if I’m already coastal, a lot of places still have “radio-telephone” capacities.
    So price is indeed a factor. A small cruising boat is qualitatively as well as quantitatively different from even a modest oceanic fishing boat or small cruise ship.
    So until they come up with a plan that is as flexible as cell phone rates (low-use customers pay low flat rates with low limits, and high fees for exceeding those limits), this is a bad business model.
    In land-based freight, you pay weight times distance. Distance is essentially obviated thanks to satellite, so “weight” (which is time multiplied by bits, by analogy) is the only fair way to go.
    If someone can explain to me how I am failing to appreciate the big picture, I will listen. But at the moment, to hell with satphones, unless I just have one to hit “911” for free. Nine-one-one is still free, right?

  3. Ben Ellison Ben Ellison says:

    Thanks, John. That blog entry is just the sort of hand’s on comparative analysis that some sailors are craving.
    But isn’t it true that some hardware and/or sat service providers are including compression and even firewall protection in their offerings. I’m thinking of the Iridium products that apparently now include GMN service, but there may be others. I bet a lot of boaters like the idea of getting everything they need in one package, and, besides, all the parts need to be factored into purchase decisions.
    Can you please explain what products have GMN compression built in, John. And anyone with knowledge of other compression and firewall products, please don’t hesitate to speak up. As mentioned in the earlier entry about RedPort routers ( http://goo.gl/skxY0 ), even broadband satellite connections need protection against unwanted data flow, maybe even more so.

  4. greg says:

    Ok, so I have an irridium phone that cost me about what an inmarsat phone runs. I buy a prepaid card for it with 75 minutes of calling time that lasts 2 years for ~$150. I can roll those minutes if I renew the card.
    Why would I even consider inmarsat? Why would anyone who only wants an emergency sat phone with minimal minutes?
    Iridium, btw, has far superior sat service and with no internal gps you can acquire a sat very quickly. With inmarsat, you can wait minutes for a connection.
    I’m failing to understand the motivation to raising prices.

  5. Richard C says:

    Hey Rupert,
    Your missing the point and also a pent-up market by implementing such a brazen price increase and by using complex product acronyms. I think your making your business way more complicated then it needs to be. There are thousands of sailors willing to buy sat phones if you would just offer a block of minutes that never expires and a simple phone. Just call it the “Princess” – Make it pink and I guarantee it will sell so fast it will make your head spin. My point is to encourage you to think along the lines of what this untouched market of boaters wants. Meet that need and you open a floodgate of business. With Afghanistan as your headwind we can be your tailwind.
    In the mean time, while I wait for one of the sat phone companies to figure this out, I have my Icom SSB radio and can communicate worldwide for free.

  6. Bob says:

    In reference to the iridium vs Isatphone grib downloads, I’m seeing 22K grib files download in well under 2 minutes using UUPlus on the Isatphone. I haven’t yet, but saildocs grib service advertises a subscription option that will send one file each day, eliminating the need to make a email request everyday.

  7. Christopher says:

    I joined the satcom fray in 1990 as a government program manager and was part of the problem until about 2005. Supply and demand aren’t really operative concepts in this industry. It started as a pure monopsony-monopoly partnership and has struggled with that heritage for well on a half century now.
    The capital costs in this industry are perhaps as high as the energy and pharma industries without the customer base. When Iridium and Teledesic, inter alia, came along we had some hope for breaking out of the government sponsored utility model but the Iridium and Teledesic models required several miracles to be economically viable without the infusion of government funds and the confusion that brings to pricing. Both depended on the internet bubble funded user and an order of magnitude drop in launch costs (both part of the universally embraced fiction of the time).
    Satcoms need war (or at least high tempo military ops) and/or a red hot international economy to fund the capital costs so marginal users can see pricing that makes economic sense given alternatives. It is no surprise people are doing systems mix and match to get their operating costs in under control.
    Should the satcom industry decide to price people out of this essentially inelastic market, it will be more of the same thinking that has made this an industry of perpetually unmet promise (albeit one with amazing successes). Holding a price gun to a customer’s head frequently results in a back-fire and this industry has beaucoup powder burns.

  8. Mike G says:

    We got the isatphone pro for use on the boat and at the cabin where there is no service, however if Inmarsat unilaterally decides that the $120.00 per month we pay for our modest 60 min/month services is just not enough and jacks up my bill, I will just exercise my upgrade to an iridium phone from my provider. It will hit me close to $600 with trade in but my contract will be up in June. I hate the bait and switch trend with telecoms nowadays. What a crock.
    Great work Ben, Panbo is one of my daily pleasures! Thanks!

  9. Ben Ellison Ben Ellison says:

    Another sign of big stakes and dynamic relationships in the satcom sector: Cobham (owner of Seatel, ACR, and many other brands) offered 425 million for Thrane & Thrane but were turned away. http://goo.gl/EBkEI

  10. Dave says:

    I suspect that Inmarsat have found themselves with part of their customer base that simply generates too low a average spend, yet ties up technical resources that deny bandwidth to higher paying users.
    What killed satcom was the near universal and fast adoption of worldwide GSM. They had a market plan in the 80s that did not foresee the rapid uptake of mobile phones often in countries that had poor fixed line infrastructure. It has never really recovered from that mis-calculation.

  11. Ben Ellison Ben Ellison says:

    Dave, how would using, say, 5 MB of data a month deny bandwidth to Inmarsat customers using much, much more? The tricky issue I tried to describe was how VSAT competitors are using low-price FleetBroadband plans to backup their systems in remote areas and heavy weather. And to some degree Inmarsat is still offering affordable low-volume plans to non-VSAT leisure and fishing vessels.
    And where the heck did you get the idea that satcoms is dead? Inmarsat, Iridium, and Globalstar are spending billions on new systems, and those are only the ones I’ve heard about.

  12. Jeff says:

    Can anyone clarify the present situation with respect to Inmarsat Fleet Broadband pricing?
    It seems that a price increase might be coming for FBB, but we are not sure.
    I have been told that it is likely that the ~50/month plan will be scrapped. If I understand correctly, this plan didn’t require paying for all 12 months of the year, as long as one was willing to pay a $50 fee to restart the service. Is this basically correct?
    I have also heard that the per MB pricing for data will probably increase dramatically. Is this what people are hearing?
    Is there any date by which all this will be settled?

  13. Ben Ellison Ben Ellison says:

    Jeff, I think your best bet is to download the FBB pricing from this Stratos page:
    http://www.stratosglobal.com/Support/Billing_Notices.aspx
    On page 3 you’ll see the special Fisheries and Leisure plans that I mentioned above. What I don’t know is how these plans will look when sold by Stratos service providers. But I think we’ll know soon as the effective date for those FBB rates seems to be April 1. Note that while an

  14. Dave says:

    Ben all the LEO systems are in effect almost commercially defunct. Iridium couldn’t survive without in effect a huge US subsidy. Global star is struggling to justify replacement birds. The only one thriving is Inmarsat and that originally got a huge leg up from governments and bring integrated into GMDSS. Several other leo system never even got off the ground. ( remember Teledesic) .
    Satcomms has proven a very difficult market in which to make money. Perhaps in the future with the interwebby being more and more important at sea, well see dedicated data based satcomms. I hope so

  15. Dave says:

    I see the first complaints over on CruiserForum. people isatphone prices plans going from 14.95 a month to 39.95 a month. (and he cancelled). http://goo.gl/Y8kv5
    Dave

  16. Ben Ellison Ben Ellison says:

    Let’s be careful about hearsay. The SatPhoneStore, for instance, is still offering remarkably inexpensive iSatphone Pro hardware and service, including $15/mo year-long contracts and prepaid cards good for two years (though still only usable 15 miles outside U.S. coast): http://goo.gl/bA6Eo
    Note that they are throwing in an interesting gadget called the SatStation miniBlu, which let’s you put the Inmarsat phone in a good reception spot on deck and run it via Bluetooth. http://goo.gl/nQbhd

  17. Ben Ellison Ben Ellison says:

    Good news for IsatPhonePro and other Inmarsat users: Today the company announced that pre-paid cards for voice calls will be available for use in U.S. waters starting on Sept. 1. The press release begins thusly:
    “LONDON – 21 August 2012 – Inmarsat (LSE:ISAT.L), the leading provider of global mobile satellite communications services, today announced that it now offers global pre-paid satellite services for both voice and data via the Inmarsat pre-pay platform with the introduction of support for voice calls originating in the US and its territories.
    Through an agreement with Freedom Wireless Holdings Inc., Inmarsat is now the first mobile satellite provider in the world licensed to offer pre-paid voice services from the US. Pre-pay voice will be available from 1st September 2012 for all existing Inmarsat land and maritime services including IsatPhone Pro, BGAN, FleetBroadband and FleetPhone.”
    There’s nothing I can find about card pricing and date ranges yet.

  18. Anonymous says:

    Is Freedom Wireless Holdings Inc. a real company? The parent company has three employees and a market cap of $156,000?
    http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=TMTP

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