All systems go for satellite group
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Your support makes all the difference.INMARSAT, the non-profit London-based organisation providing satellite communications to ships, planes, and long-distance lorries, will announce final plans to prepare it for privatisation after its council meeting on 10 March, according to directors and staff.
"Our working group met last week to go over our restructuring plans," said Warren Grace, Inmarsat director-general. "It agreed to recommend the appointment of an investment bank to do due diligence." If all goes according to plan, Mr Grace continued, the organisation, set up by international treaty in 1979, will have transformed itself into a player in the competitive satellite-based communications industry by the turn of the year.
"We are not talking about what we will be doing in the future, like some of the others," Mr Grace said. "We currently have 100,000 users of our mobile terminals, which are the size of laptops."
Geoffrey King, the British Telecom executive who chairs the organisation's ruling council, says the privatised Inmarsat will sell the capacity to move large volumes of data between mobile terminals. He argues this will set it apart from satellite companies like ICO and Irridium specialising in mobile phones, as well as Microsoft's $10bn (pounds 6bn) broadband venture, Teledesic LLC, which plans to launch 288 satellites in low earth orbit to move data between fixed terminals.
Mr Grace admits the timetable for privatisation has slipped. Originally, the company was to begin restructuring early this year. He further admits there have been differences between members.
Thomas Collins, who as general manager of Washington-based Comsat also sits on Inmarsat's ruling council, dismisses claims that the organisation must privatise now or lose its chance in the fast-evolving satellite industry. "We will privatise," he says. "But we have to do it right."
In addition to appointing an investment bank adviser at its 10 March meeting, Inmarsat's council is expected to recommend to the organisation's governing assembly - composed of diplomats from 81 nations - that they schedule a meeting this year to approve privatisation.
As a private company, Inmarsat will lose its tax-exempt status. But it will be allowed to raise fresh capital from its members as well as outside investors. "We expect there will be an initial public offering of shares within two years of privatisation," said BT's Mr King.
No public value has been set on the company. But N M Rothschild has supplied estimates to the group privately. The group's 1997 revenues were $378m.
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