UK Edition
The US Navy has awarded British satellite operator Inmarsat a $578m (£478m) contract ahead of its takeover by an American rival.
Inmarsat said it had secured the multi-million pound deal to develop and maintain a satellite communications network for the US Navy Military Sealift Command.
The US Navy’s Sealift division provides logistics, transportation and cargo capacity to its armed forces. This includes operating tankers that refuel larger vessels, running ammunition ships, cargo carriers and crewing the US Navy’s Mercy ships, which are supertankers converted into floating hospitals. Other services include tugs, salvage ships and floating naval radar platforms.
Under the 10-year contract, Inmarsat will maintain satellite and ground communications technology for the Navy branch. It will also upgrade its current communications technology to Inmarsat’s more advanced “Xpress” network and L-band spectrum.
Susan Miller, chief executive of Inmarsat Government, said the company planned “significant enhancements” to its satellite communications coverage and resilience.
The deal provides a boost to Inmarsat’s sales after years of stagnant revenue growth. Revenues at Inmarsat fell 7.9pc in 2020, due to a collapse in flight traffic, recovering 6.3pc in 2021 to just over £1bn, according to its accounts.
The company provides satellite services to airlines, shipping, and military customers.
Inmarsat was listed on the London Stock Exchange for years before it was taken over by US private equity firms Warburg Pincus and Apax in 2019.
It is due to merge with US rival Viasat in a $7.3bn (£6bn) deal. The companies said the merger will lead to $190m in cost savings.
Due to Inmarsat’s sensitive military clients, the companies have agreed to undertakings with the UK government to keep core satellite operations in the UK, create a UK board and boost R&D spending in Britain. Viasat has announced plans to spend £300m in Britain over the next 10 to 15 years.
The deal still requires sign-off by regulators. The Competition and Markets Authority is currently investigating. Inmarsat and Viasat have both said they will “cooperate fully”.
Satellite companies are merging to better compete with fast-moving rivals such as Elon Musk’s Starlink.