[Via Satellite 02-28-2014] Inmarsat<\/b>\u2019s decision to delegate its energy broadband business to RigNet<\/b> may be an opportunity for Global Xpress (GX) to grab a foothold in the oil and gas sector. The $25 million cash acquisition gives RigNet almost all of Inmarsat\u2019s energy broadband assets save for those in Russia, and made RigNet a Value Added Reseller (VAR) of GX capacity for the first five years after the network becomes operational. The transaction and accompanying deal may prove to be a real benefit for Inmarsat going forward in a market that has not been its strong suit.<\/p>\n
\u201cThey weren\u2019t emphasizing the energy sector that much originally,\u201d said Tim Farrar, president of TMF Associates<\/b>. \u201c[Inmarsat] focused Global Xpress on maritime, aeronautical and government business, and energy has been a bit of a second tier market for them. By selling these assets and teaming up with a player who had a lot more clout than the existing Stratos business, that will hopefully help them have a good route to market for GX.\u201d<\/p>\n
RigNet\u2019s bigger presence in the energy market bolsters the company\u2019s ability to sign contracts and win over customers in this vertical. RigNet has had more success over the past few years than Inmarsat\u2019s Stratos business, selling services from Intelsat<\/b> and SES<\/b>, which have been strong competitors for Inmarsat in this region.<\/p>\n
\u201cThe assets we acquired are highly complimentary to our business model,\u201d said Brad Alexander, vice president of corporate development at RigNet. \u201cThat business model is serving the remote communications needs of the global energy market. RigNet is the more natural owner of these assets.\u201d<\/p>\n
However, challenges still loom over GX, as its Ka-band services may prove to be a hard sell in traditionally Ku-band waters.<\/p>\n
\u201cIt is still unclear what the end customers actually want in terms of how easy it\u2019s going to be to persuade them to move to Ka-band \u2026 I think that there is some nervousness as to whether Ka-band will be more reliable,\u201d said Farrar.<\/p>\n
RigNet is banking on a combination of Ka-band and L-band to meet customer needs. According to Alexander, the expectation of increased bandwidth and the continued digitization of oilfields are driving the demand for high throughput satellite services like GX.<\/p>\n
\u201cIt is a complimentary solution,\u201d Alexander explained, \u201cwhere BGAN, GSPS and FleetBroadband solutions meet a variety of needs that the GX solution does not meet, and where GX meets a variety of needs that the L-band solutions do not meet. Where they are complimentary you have either a redundant backup solution or data-appropriate solutions for the needs of our customers.\u201d<\/p>\n
The size of RigNet\u2019s commitment to Global Xpress remains undisclosed. Alexander declined to comment on the amount, only describing it as \u201csignificant\u201d and something the company is \u201cpleased\u201d to have at its disposal. RigNet sees HTS as part of a major transition in oil and gas communications, and is committed to playing a role with Inmarsat. Still, whether Ka-band is the best way to charge forward is yet to be seen. It will take some convincing for the industry to adopt a new frequency that it can be confident will hold up in remote locations.<\/p>\n
\u201cA lot of the places that oil and gas operates, particular offshore, are relatively damp climates,\u201d said Farrar. \u201c[And] if you demonstrate that they are equally reliable, can you provide enough capacity? Because remember that GX spreads its capacity pretty evenly over the Earth. It doesn\u2019t have large amounts in particular locations, unless they point some of the additional spot beams at a particular location.\u201d<\/p>\n
Among other concerns, GX also needs to prove that it is the most cost effective option. If Ku-band users make the switch to Ka, this could open up doors for other competitors and, if they are cheaper, it would turn GX into a lost cause in this vertical. Having a veteran company like RigNet as a VAR certainly helps, but in the end, it\u2019s going to come down to reliability \u2014 both real and perceived \u2014 and price.<\/p>\n
\u201cIt\u2019s supposed to be cheaper than traditional Ku, but it\u2019s not going to be as cheap as say, ViaSat<\/b> and Ka-Sat regional systems, or as cheap as O3b<\/b>,\u201d said Farrar. \u201cSo even if they\u2019ve got over the hurdle of using Ka, the next question is if they want to use GX as opposed to other Ka-band systems.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
[Via Satellite 02-28-2014] Inmarsat\u2019s decision to delegate its energy broadband business to RigNet may be an opportunity for Global Xpress (GX) to grab a foothold in the oil and gas sector. The $25 million cash acquisition gives RigNet almost all of Inmarsat\u2019s energy broadband assets save for those in Russia, and made RigNet a Value […]<\/p>\n","protected":false},"author":1,"featured_media":78324,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-78322","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/78322"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=78322"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/78322\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/78324"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=78322"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=78322"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=78322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}