MSV secures financing, adds interoperable talk
Mobile Satellite Ventures has secured financing to launch its next-generation satellites and possibly pursue a merger with Inmarsat as the company pursues its strategy of making satellite communications part of the day-to-day operations of first-response organizations.
In late July, MSV parent SkyTerra Communications announced that the Harbinger Capital Partners Funds hedge fund has agreed to provide $500 million in debt financing, while Harbinger affiliates have signed an agreement addressing the structure of a possible merger of SkyTerra and Inmarsat.
With the $500 million financing commitment, SkyTerra and MSV can fund SkyTerra’s business plan through the third quarter of 2010. MSV hopes to launch its MSV-1 satellite — a satellite so large that services can be provided to devices with cell-phone-sized form factors and antennas — in late 2009 and a similar MSV-2 satellite during the latter half of 2010, said Alexander Good, SkyTerra CEO and president.
The Harbinger financing announcement came less than three weeks after satellite builder Boeing agreed to defer $40 million in payments associated with the MSV-2 satellite. Together, these deals address a major concern regarding the ability of SkyTerra and MSV to fund its business plan, said Scott McLeod, SkyTerra CFO. “We appreciate that strong financial support of Harbinger, particularly in what are otherwise very challenging capital markets,” McLeod said.
Harbinger’s financing is not contingent on SkyTerra completing a deal for Inmarsat, and SkyTerra has the option of trying to secure better financing terms in the marketplace before the first $150 million tranche is exercised in January 2009.
When MSV launches its huge MSV-1 satellite in 2009 — expected to provide service in 2010 — the size of the satellite means the antennas in devices can be much smaller. During the APCO conference last month, MSV unveiled a prototype handset and PDA that boast similar form factors to those operating on cellular networks today.
“The cigar antenna of the typical satellite phone [today] will be gone,” said Tom Surface, spokesman for MSV.
Just as important, the costs associated with satellite devices can decrease, making satellite capability something that can be integrated into cellular or LMR handsets — an ideal feature for public-safety devices, such as those that would operate on the proposed 700 MHz nationwide broadband network, said Jim Corry, vice president of government solutions for MSV.
“For five bucks, you can put satellite capability into any device,” Corry said. “When we pull this off, I think we’re going to change a lot of the metrics.”
Meanwhile, Corry is leading an effort to establish a series of talk groups — some nationwide groups managed by federal agencies and some regional groups, typically managed by state or local agencies — that are designed to provide interoperability using MSV’s unique push-to-talk capability.
These talk groups are free to MSV customers and provide communications that are not subject to terrestrial problems, unless MSV’s land station in Ottawa is affected, Corry said. Eventually, MSV plans to blanket the U.S. with nine regional talk groups, he said.
MSV previously had announced four regional talk groups, and two more regional talk groups likely would be announced soon. While blanketing the U.S. with regional talk groups would be a milestone for the company, Corry said the diverse and cooperative nature of this rollout has wider implications.
“Take the word ‘satellite’ out of there, take ‘MSV’ out of there, and you can use this same model with LMR,” Corry said. “There are no technical issues to interoperability, just ego and control issues.”
Dick DeVore, chief of emergency management for the department of public safety and homeland security in Allegany County, Md. — the lead agency for the mid-Atlantic regional talk group — echoed this sentiment.
“I think the manner in which MSV has gone about creating interoperability can serve as a model for others,” DeVore said.
