British satellite provider Inmarsat said its LightSquared spectrum sharing agreement boosted revenue in the third quarter as its core shipping business was hit by a shift to lower-revenue broadband terminals.
The company, which provides communications to ships, aircraft and the military, reported an 18.4 per cent rise in third-quarter earnings to $224.4 million in its global business on 22 per cent higher revenue of $245.2 million.
Chairman and Chief Executive Andrew Sukawaty said revenue from LightSquared in North America offset a slowdown in its maritime services revenues.
Inmarsat recognised $56.4 million of revenue in the quarter from its US partner LightSquared. The US company, owned by Harbinger Capital partners fund, is sharing Inmarsat’s spectrum to develop a mobile phone service using airwaves previously reserved for satellites.
Inmarsat’s shipping customers have been moving to broadband terminals, which initially generate lower revenue, faster than the company expected, resulting in the group abandoning its forecast for 2-4 per cent annual revenue growth for its core business in the summer.
“While third-quarter MSS (maritime services) results were in line with our expectations, as previously stated, we are unlikely to see consistent evidence of a return to MSS revenue growth until next year,” Sukawaty said.
The group would restate it longer-term MSS growth forecast, which previously stood at 5-7 per cent, at the end of the year, he said.
Total active customer terminals rose 12.5 percent year-on-year, the company said, and it launched a new hybrid service to compete with VSAT services at the top-end of its customer base. The hybrid offer, called Xpresslink, also offered an upgrade path to its next generation Global Xpress maritime Ka-band service, due to start operations in 2014, Sukawaty said.