Racal Electronics Plc has formed a US joint venture company, Racal-Milgo SkyNetworks Inc, with Telecommunications Enterprises Inc, TEI, of Charlotte, North Carolina to offer satellite-based data communications services. Racal Data Communications Inc has 50.1% of the new company, TEI the balance; Racal has options to buy the rest of the joint venture in 1992 or 1994, with the consideration to be based on profits. Racal Data Communications claims to be the first data communications company to move into satellite-based networking, as well as being the only European company to attack the US-based industry, which is led by Hughes Corp, AT&T Co and GTE Corp. Racal says a turnover of $200m by the mid-1990s would represent success for the new company, which it says should be profitable in two years; Racal will loan SkyNetworks at least $4.25m. TEI, which has an annual turnover of around $2m, puts its entire satellite interests – virtually the whole company – into the new joint venture. Racal-Milgo SkyNetworks’ services will be based around a regional hub, a high capacity satellite ground station shared by customers within a 100-mile radius of the hub site; Racal wants to have at least five hubs in place within a year. Racal-Milgo SkyNetworks also has its first contract, a $4.3m agreement with American Express subsidiary First Data Resources & Cable Services Group, of Omaha, Nebraska, for a US-wide satellite network.
