Spectrum - Culture, Media and Sport Committee Contents


Written evidence submitted by Inmarsat Group Limited

1.  For over three decades, Inmarsat has been the leading provider of mobile satellite communications services around the globe. From its headquarters in London, Inmarsat has contributed significantly to the national economy and provided an ever-growing set of services, including advanced plans for mobile broadband for use at sea, on land and in the air. The life-blood of all these services is access to radio spectrum for sophisticated satellites that cost many hundred millions of pounds to build, launch and operate. For this reason, Inmarsat welcomes the opportunity to provide written evidence to the Committee as part of its inquiry into spectrum.

2.  This submission concerns the following four points:

—  Spectrum is critical to the satellite communications industry.

—  The satellite communications industry is important to the UK economy—when identifying broadband spectrum, the UK also should take into account this and other industries.

—  Satellite communications should be an integral component of the UK broadband plan.

—  Satellite operators provide other critical services in addition to mobile broadband.

INTRODUCING INMARSAT

3.  We are the leading provider of global mobile satellite communications services ("MSS"). We provide data and voice connectivity to end-users for use at sea, on land and in the air.

4.  Inmarsat's mission started as an Inter-Governmental Organization providing MSS to maritime users, which include companies engaged in merchant shipping, passenger transport, fishing, energy and leisure, as well as government and maritime patrol organisations (such as navies and coast guards). Inmarsat subsequently has expanded its service portfolio and provides MSS as well to the land mobile and aeronautical sectors, with users such as government entities, media users, aid agencies, the oil and gas industries, and commercial airlines.

5.  Today, as a privatised entity, Inmarsat is in the forefront of developing sophisticated new technology for satellite services. We currently operate three generations of satellites, starting with three Inmarsat-2 satellites launched in the early 1990s, five Inmarsat-3 satellites launched between 1996 and 1998, and three Inmarsat-4 satellites launched in March and November 2005 and August 2008. Each of our Inmarsat-4 satellites is up to 60 times more powerful, and has up to 16 times more communications capacity than an Inmarsat-3 satellite, and the Inmarsat-4 satellites are expected to extend the commercial life of our satellite fleet beyond 2020.

6.  Inmarsat is one of the two operators selected through EU procedures to provide MSS across Europe, using two GHz frequencies. The selection of Inmarsat's EuropaSat system is part of EU policy to facilitate the introduction of innovative pan-European satellite communications services. In adopting the selection procedure, the European Parliament and the Council recognised that this type of new MSS system is an innovative alternative platform, which should contribute to enhanced competition and efficient investment. They explicitly referred to MSS improving coverage of rural areas and anticipated that new MSS applications will emerge in the coming years.

SPECTRUM IS CRITICAL TO THE SATELLITE COMMUNICATIONS INDUSTRY

7.  Use of radio spectrum is the "life blood" of satellite communications because highly expensive and sophisticated satellites must be designed for operation in the harsh space environment to operate over a lengthy lifespan using spectrum coordinated through a complex international process. Inmarsat uses spectrum below three GHz (the so-called "sweet spot") and will continue to do so in the long term future.

8.  For example, in November 2007, Inmarsat entered into a contract with Astrium for the construction of a new satellite called Alphasat to be deployed over the European and Middle East region. The Alphasat satellite will provide our services across the complete 41 megahertz of MSS spectrum available over this region. Alphasat's advanced digital processor capability and optimised antenna coverage will allow up to 50% more capacity for our services. The total cost of the Alphasat programme, including manufacture and launch of the satellite, is expected to be in the region of £215 million.[14]

9.  Inmarsat already is planning ahead for its next generation of satellites (the "Inmarsat-5" constellation). For instance, in 2013 we expect to commence offering our "Global Xpress" service, in downlink frequencies between 18 and 22 GHz and uplink frequencies between 27 and 31 GHz. These frequencies are often referred to as the "Ka-band". Inmarsat plans to offer connectivity at speeds of up to 50 Mbps to small antennas via our Inmarsat-5 satellites using the Ka-band.

10.  These kinds of investment and technology development can only be made if there is suitable assurance that spectrum will be available during the lifetime of the satellite. Satellite registrations to obtain international recognition through the International Telecommunication Union have a lead time of up to seven years before the satellite is placed into service. Today's sophisticated communications satellites have lifespans up to fifteen years or longer. Once launched, satellites cannot be "retuned" or modified to operate using other spectrum assignments. A threat to the availability of the appropriate spectrum means that substantial investments simply cannot be made. Regulatory certainty is an important element for high upfront business planning in the satellite sector.

11.  Satellite operators must also assess the availability of spectrum across the entire "footprint" of the satellite. Moreover, unlike terrestrial mobile phone operators who can choose from a variety of spectrum allocations within any single country, satellite operators must rely on a fairly narrow set of internationally coordinated spectrum bands. If a single country within the footprint decides to make spectrum available in ways inconsistent with its neighbours, it can either create unacceptable interference for satellite operations or impede the economic viability of the business case for the satellite services, or both. A failure by one regulatory authority to take into account the unique benefits of satellites services can thus deny those services to users across Europe.

THE SATELLITE COMMUNICATIONS INDUSTRY IS IMPORTANT TO THE UK ECONOMY

12.  When identifying broadband spectrum, the UK also should take into account this and other industries. These activities are a large component of the UK Space industry, which itself makes significant contributions to the national economy. Policymakers have already recognised this contribution:

—  In March this year, the Parliamentary Space Committee welcomed UK Chancellor George Osborne's budgetary support for the Space industry in "The Plan for Growth". The latter recognises the Space industry as "an expanding industry", and highlights the UK Space sector's growth average of 10% per year over the last decade. A quarter of these revenues come from the satellite telecommunications sector.

—  In the foreword to the UK Space Innovation and Growth Strategy (the "IGS") in February 2010, the Minister for Science and Innovation, stated that "the UK Space sector is a genuine success story. We're responsible for world-class science in our laboratories and on international missions. We manufacture many of the satellites surrounding the Earth, and are experts in software design and systems integration. The sector contributes £5.6 billion to the economy and supports 68,000 jobs."

13.  Inmarsat is an important part of this Space industry that contributes significantly to the UK economy. Our 11 in-orbit satellites are licensed under the UK Outer Space Act. The majority of our 500+ employees work in London. During 2010, revenues from Inmarsat Global were £465.4 million, an increase of £42.2 million, or 10.0%, compared with 2009 (translated at 7 June 2011 exchange rate).

14.  These positions highlight that there are numerous UK policy and legislative initiatives related to spectrum that should be considered as part of spectrum policy. These different societal policies must be assessed together with broadband planning to ensure the right mix of spectrum uses is fostered.

SATELLITE COMMUNICATIONS SHOULD BE AN INTEGRAL COMPONENT OF THE UK BROADBAND PLAN

15.  A central part of this inquiry is to assess how best to provide mobile broadband services, in particular for rural areas where normal networks have not been rolled out. Policymakers recognise that satellite communications must be an integral part of planning for broadband networks:

—  In December 2010, the Government released "Britain's Superfast Broadband Future," laying out strategy for ensuring the UK's broadband networks. The summary acknowledges that "a mix of technologies—fixed, wireless and satellite—will be needed to deliver superfast broadband throughout the UK." It notes that satellite "will need to be a part of any solution aiming at universal coverage".

—  Most recently, on 31 May 2011, European Commission Vice President and Digital Agenda Commissioner Neelie Kroes said that satellites will play a role in achieving EU digital agenda goals. She noted that satellite communications "can provide a great contribution to deliver the important goal of basic broadband for all". She also raised an important notion that "supporting a range of fixed and mobile solutions promotes competition among technologies, allowing them to develop their comparative advantages and ensuring that in future we can select from the best possible range of options".

—  This same thinking is well-developed in the United States. As recently as January this year, the Federal Communications Commission (FCC) recognised that the network of the U.S. satellite MSS licensee LightSquared "will be able to provide mobile broadband communications in areas where it is difficult or impossible to provide coverage by terrestrial base stations …, as well as at times when coverage may be unavailable from terrestrial-based networks (such as during natural disasters)".

SATELLITE OPERATORS PROVIDE OTHER CRITICAL SERVICES IN ADDITION TO MOBILE BROADBAND

16.  The focus of this inquiry on mobile broadband should not obscure that many other services rely on spectrum in the same portion of the radio frequency spectrum that mobile terrestrial operators seek. Among the recommendations of the IGS that we noted above is that the Government should take full account of the wider value of Space-enabled services when engaged in activities relating to radio frequency spectrum allocation. The spectrum most in demand below three GHz has been a prime focus for mobile terrestrial operators, but it also is used by many other users and regulated safety services. A sophisticated approach to "co-habitation" amongst the different services is required to maximise welfare for all users.

17.  As we have noted above, Inmarsat provides a wide range of services in addition to mobile broad band using its satellite fleet in frequency bands below three GHz:

—  In the maritime area, Inmarsat supports position reporting as a key component of fishery management and ocean resource conservation. We also provide safety services for distress purposes, some of which are required by the International Maritime Organization for cargo ships over a certain size and for all passenger vessels.

—  Military and government agencies constitute the largest end-users of our services in the land mobile sector and demand reliable, high quality services. Inmarsat provides important links to support relief missions in response to natural disasters.

—  Aeronautical users rely on Inmarsat satellite communications services for Air Traffic Control safety services, while aircraft crew and air traffic controllers use our services for data and voice communication between the flight deck and ground-based control facilities.

18.  These are but a few of the examples of services that Inmarsat provides using spectrum in the traditional bands below three GHz. As part of our mission to innovate with new technology approaches, however, we also are working to expand operations in higher spectrum bands, such as the Ka-band service described above. Although part of the band is shared with fixed links, any future oriented policy for this band should also consider the use by satellite communications. Some mobile terrestrial operators seek to use these same frequencies for backhaul purposes (ie carrying traffic from masts back to network control centres for further onward transmission, and not between customer handsets directly). This approach needs to be addressed reasonably to ensure continued growth of the satellite sector while balancing needs of terrestrial operations.

IN SUMMARY

19.  It is timely and important for the Committee to review UK policy towards the use of radio spectrum. It must consistently be kept in mind that many different industry sectors rely on spectrum, some as the major input into their services, and those industries in turn contribute very substantially to the national economy. The provision of broadband service is a compelling goal, especially to rural areas where the contribution of satellite networks can be substantial. The satellite industry also contributes to wider goals, providing services that cannot be obtained through any other networks and as a real, competitive alternative. International aspects of this industry must also be taken into account, because of the complex international regulatory structures and the export opportunities that UK satellites offer. We welcome a careful balancing of these different needs for spectrum as part of the UK broadband plan.

June 2011


14   This amount is taken from Inmarsat Group Limited's 2010 Annual Financial Information Disclosure Report, with sums originally expressed in US$ converted to GBP at the prevailing exchange rate on 7 June 2011. Back


 
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Prepared 3 November 2011