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August 6, 2014

Inmarsat’s new network delayed by Proton problems

Proton’s recent failure delays British satellite company’s new network launch.

By CBR Staff Writer

The global implementation of the new communications network of Britain’s Inmarsat faces a six-month delay as Proton, its Russian launch provider, strives to bounce back from failure.

According to chief executive Rupert Pierce, the news is not surprising considering the latest letdown in May, of a Proton rocket.

"The guesstimate at the moment, given what we know, is that we will have both birds up and be fully launched for a global service by the end of the first half of next year.

But despite that, having seen the resilience in our business, we are reasserting our medium-term guidance of MSS wholesale revenue growth of 8-12% over the 2014-16 period," he said in an interview.

Pearce also allayed concerns regarding Russia’s troubled politics with Ukraine saying that it would in no way impede the launch.

If not for the Proton delay, the British satellite company, provider of communications for aircraft, ships and remotely located users, had estimated that its new network’s remaining two satellites would be up and orbiting by 2014 end.

Pearce said that interested customers for the network include the US Government, which reflects the network’s high potential and the already orbiting satellite can satisfy this on a regional basis.

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"It signals the confidence we have in Global Xpress (GX) that our important customer, the U.S. government, will be buyers," he added.

Inmarsat shares went down 2.2% at 705.5 pence (09:39 GMT), which follows a two-month low score of 699.5 pence.

With the Proton delay, alert analysts at Jefferies evince caution as they enter the quarter saying that this deferral would set their forecast back by $30 million to $40 million for a full year’s revenue growth.

In the second quarter, for its main business, Inmarsat’s adjusted core earnings were $159.9 million, well near the $160.8 million average forecasted by analysts. Its revenue reflected a rise of 1.9%, amounting to $196.1 million.

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