Forbes.com (KVH mention)
Stay Connected From The High Seas
By Arik Hesseldahl
When discussion of satellite telephones comes up, it's difficult not to think of two great business disasters of recent years, Iridium and Globalstar.
Iridium, backed mainly by Motorola , flamed out financially and almost did so literally as well: a consortium of investors had to save its orbiting satellites from burning up in the atmosphere last December. Then a $72 million contract with the Pentagon pumped some life into the service's new owner, Iridium Satellite LLC.
ADVERTISEMENT
Then there's Iridium's unlucky rival Globalstar , still limping along with a stock price below $1 a share. In its most recent quarter the company reported a $145 million loss on sales of $2.3 million. But with only $98 million in cash and cash equivalents at the time it reported its earnings in August, it may find itself soon crashing to Earth.
But then there's Inmarsat. Founded more than 20 years ago as a cooperative organization run by 64 governments to provide satellite communications for ships, it's evolved into a United Kingdom-based private company that has flirted with going public. Since Sept. 11 it has been doing a brisk business with international TV news organizations, who are using its network to transmit video phone images from places as remote as Kabul and Khandahar.
If you're in the shipping business, or even just have a big boat from which you'd like to maintain a telephone link, chances are you'll be using a phone connected to the Inmarsat network, which has nine satellites circling the globe.
One company in the business of selling phones which work on Inmarsat is KHV Industries , a Rhode Island-based firm that also makes tactical navigation systems for military vehicles. It's not a profitable business; on Oct. 23 KVH reported a $1.6 million loss on sales of $7.9 million for the quarter. But its stock price has been up lately, from about $4 a share in early October, to more than $6 last week.
One week ago it announced a new phone aimed at marine users who need to stay connected when at sea. The Tracphone 252 is suitable for boats as small as 35 feet, supporting voice calls, fax, data and email capabilities. The system has interfaces for additional phones, a fax machine and a PC. Different types of incoming calls are routed to the appropriate device. It also supports secure usage and accountability with a smart-card system that can track who called which numbers.
That kind of connection does comes with a price. KVH sells the phone system for about $6,000. Plus there's the hefty Inmarsat service charges. But if you have to stay connected, it's probably worth it. |
