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Inmarsat Plc partners with Airbus to deliver ground-breaking transformation of GX network

Inmarsat Plc (LON:ISAT), the world leader in global mobile satellite communications, announces that Airbus Defence & Space (Airbus) has been selected as its satellite manufacturing partner as part of a ground-breaking development of its Global Xpress (GX) network. The partnership will provide a step-change in GX’s capabilities, capacity and agility for the benefit of existing and future Inmarsat customers, partners and investors.

Inmarsat’s GX network was first designed in 2010 and began global services in 2015. This created the world’s first and only seamless global mobile broadband network. Inmarsat has since grown GX revenues strongly and established leading positions in the emerging global Maritime, Aviation and Government mobile satellite broadband markets, with GX revenues increasing by 85% to $250.9m in 2018. GX is the most successful network for global mobility.

Today’s announcement marks the beginning of the next phase of GX’s evolution, enhancing global mobile broadband coverage with a transformation in network capacity and service capability. This transformation, together with the unparalleled agility of the next-generation satellites, will ensure GX remains at the forefront of innovation for the benefit of customers and partners.

This contract with Airbus is for the manufacture of three next-generation GX satellites (GX7, 8 & 9), with the first scheduled to launch in H1 2023. The level of capital expenditure under this programme is in line with that provided for in our long term planning. As such, there is no change to our overall capex guidance on the back of today’s announcement.

Transformed model delivering directly into customer demand

This new satellite programme will transform Inmarsat’s global network, providing unprecedented agility in space segment deployment, as well as an enhanced ability to adopt and integrate future technology innovation and disruption to the GX product line.

This network development encompasses a major enhancement to the GX ground network, which will deliver full integration of each generation of GX satellites to form a highly-secure, inter-operable, ultra-high performance network. Future GX satellites offering new capabilities can easily be added to this dynamic framework whenever and wherever demand dictates. The network will also be able to benefit from future technology innovation.

The network will be tailored automatically to the exceptionally fluid nature of customer demand in diverse global mobile broadband markets. This will maximise the efficient deployment of diverse capabilities and enable them to be mobilised instantaneously.

As such, Inmarsat will continue to offer the highest quality, best-value mobile broadband services and solutions to customers and partners globally.

Future-proofing customer investment and supporting Inmarsat’s growth and capex profile

The new GX technology will be compatible with existing terminals, allowing Inmarsat customers to benefit seamlessly from this and future service enhancements. Through regular upgrades by Inmarsat to the GX network capabilities and features, customers will be able to take advantage of future technology innovation.

Having established leading positions in the emerging global Maritime, Aviation and Government mobile satellite broadband markets, Inmarsat is on track to achieve its objective of delivering annual GX revenues at a run rate of $500m by the end of 2020. Today’s announcement reaffirms Inmarsat’s confidence to sustain this growth beyond 2020, whilst simultaneously driving a sustained and meaningful moderation in its infrastructure capex.

A clear advantage of the Airbus production line approach is the accelerated satellite deployment capability. This capability, together with Inmarsat’s well-established GX customer base, will ensure that new capacity can be quickly and accurately matched to demand, leading to a better outcome for customers and a lower risk infrastructure investment programme.

Rupert Pearce, Chief Executive Officer, Inmarsat said: “On its launch in 2010, Global Xpress revolutionised satellite telecommunications and, even in 2019, GX remains the world’s only truly seamless global mobile broadband network. As such, I am delighted today to announce the next steps in GX’s development, in partnership with Airbus, which will ensure that our customers continue to benefit from GX’s ground-breaking technology and capabilities for many years to come.

“Worldwide demand for mobile broadband connectivity has grown exponentially in recent years and we expect this trend to continue. This next phase in the evolution of our GX network provides a dynamic and powerful answer to the challenges created by this growth in demand, building on the strong foundations we have already established.

“Significantly, our new approach in collaboration with Airbus and other technology partners will provide us with much greater velocity and agility with which to respond to future competitive challenges and to adopt new technologies on a highly dynamic, rolling basis.

“We are delighted to be partnering with Airbus who have more than risen to the significant strategic and technological challenges we set them. This announcement signals the start of a new long-term strategic partnership.

“GX has rapidly become a very significant and sustained revenue growth contributor for Inmarsat. More importantly, it embodies our strategic, long-term approach to network augmentation as we continue to meet and exceed customer requirements.

“In our fortieth year, we move forward with a radical new model which builds on our existing GX investments to deliver a step-change in future GX services and in our ability to help our diverse customer base capitalise on the opportunities afforded by a digital society.”

Airbus’ Head of Space Systems, Nicolas Chamussy said: “We are launching the Onesat product line for our customer Inmarsat, following the successes of the Airbus-built Inmarsat-4 spacecraft, Alphasat and the Inmarsat-6 satellites, currently under construction. This latest contract continues the long standing innovation relationship between Airbus and Inmarsat. Onesat is a truly disruptive product, both from a manufacturing and operational point of view, which allows Airbus to offer our customer a market enabling solution with reduced cost and time to orbit.”