Inmarsat Aviation overview. Leo Mondale Managing Director, Inmarsat

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Dominic Underwood
10 years ago
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1 Inmarsat Aviation overview Leo Mondale Managing Director, Inmarsat

2 Agenda Overview of Q1 financial performance Update on the Inmarsat-5/ Global Xpress programme The connected world Conclusion

3 Q1 financial performance A strong start to the year good momentum established

4 The group overview US$m Revenue % Operating costs (134.8) (158.6) 15.0% EBITDA % EBITDA excluding LightSquared % Depreciation and amortisation (67.6) (62.7) Share of profit of associates Impairment losses (1.1) 0.0 Operating profit % Net interest payable (8.2) (6.9) Profit before tax % Tax expense (27.3) (21.4) Profit for the period % Q1

7) Share of profit of associates 0.5 0.8 Impairment losses (1.1) 0.0 Operating profit 141.7 93.2 52.

5 Wholesale Business Unit analysis Revenues Growth Maritime $98.1M 9.2% Enterprise $24.3M 1.5% US Government $24.1M (24.1%) Global Government $22.9M (1.0%) Aviation $22.1M 38.7% TOTAL $191.5M 3.7%

6 Aviation Strong growth, Nose to Tail Active terminal base up 10%, ~17k terminals SwiftBroadband subscriber adds up 1.5k, up>40% SwiftBroadband 2013 revenue growth >70%, ARPU growth 17% Strong growth from business aviation and airline connectivity Cabin connectivity services provided on 2,150 aircraft Market leader in safety services and developing next generation technology GX well-positioned for airline focus on in-flight Wi-Fi Significant momentum and engagement for future services, Air China selected GX Aviation for 2015 GX global coverage, capacity and high quality service will challenge regional service model Fastest-growing sector for Inmarsat, poised to take-off

2,150 aircraft Market leader in safety services and developing next generation technology GX well-positioned for airline focus on in-flight Wi-Fi Significant momentum

7 Global Xpress On track to deliver against expectations

8 Global Xpress The entire programme is on-track and on-budget Excellent performance from Inmarsat-5F1 Now fully deployed and tested, end to end Customer trials commencing and going well CSI targeted for July High confidence in F2 and F3 launches by EOY 2014 Spare F4 under construction, to deliver mid-2016 Cisco performing well on Gateway Strong engagement on channel readiness preparations Excellent customer appetite for Global Xpress

confidence in F2 and F3 launches by EOY 2014 Spare F4 under construction, to deliver mid-2016 Cisco

9 The connected world

10 The connected world Technology is driving user demand 4G LTE Advanced projected capabilities for peak data rate are 1Gbit/s downlink and 500Mbits/s uplink Proliferation of mobile devices 1.75bn smart phone users in 2014 worldwide, in a market of 4.55bn mobile phone users (emarketer.com) BW hungry apps and critical services Consumers spend 127 minutes per day in mobile apps up 35% on last year, compared with 168 minutes watching TV per day The cloud computing business is growing at 36% CAGR to reach $19.5bn by 2016 demanding more capacity (forbes.com) Interactive behaviour and OTT Media consumption is moving from a one-way experience to peer-topeer and interaction (Flurry Analytics) End users want: high speed access to anything, from any device, anywhere, anytime

com) BW hungry apps and critical services Consumers spend 127 minutes per day in mobile apps up 35% on last year, compared with 168 minutes watching TV per day The cloud computing business is

11 User demand and technology is driving use And will continue to grow Global IP traffic is expected to more than double between 2012 and 2015 Global mobile data traffic will grow three times faster than fixed IP traffic

than double between 2012 and 2015 Global mobile data

12 The challenge to connectivity providers The end user wants.. From any device Anywhere High speed access More capacity, higher throughput and better quality service at a lower price, with a global presence Anytime

13 Connectivity for Aviation The Aviation industry is responding to the challenge Inmarsat has started to deploy Global Xpress, its global network for high-speed mobile services GX Aviation services to be available in 2015, following completion of global coverage and commercial availability of OBE equipment In-flight connectivity is the fastest growing segment in the IFEC market By 2020, IMS research forecasts that approximately 50% of the world s fleet will have been equipped with Wi-Fi connectivity Number of worldwide connected aircraft ATG in the US is setting market expectations Worldwide, there is growing high level of airline industry activity and interest around connectivity Active Inmarsat Aviation engagement with airlines in Europe and around the world 1 As of end of 2013; based on SEC filings, March 2014

research forecasts that approximately 50% of the world s fleet will have been equipped with Wi-Fi connectivity Number of worldwide connected aircraft ATG in the US is setting market expectations

14 The Inmarsat solution Integrated satellite and a complementary Air-to-ground Inmarsat s Aviation Complementary Ground Component (ACGC) is an ATG network of terrestrial towers that will provide unrivalled throughput to aircraft Utilises the S-band (2MHz spectrum). Europasat S-band satellite to be launched year end 2016 Integrated with Global Xpress and existing L-band options will give Pan-European capacity and coverage that cannot be matched with any other satellite solution (Gigabytes vs. Megabytes of capacity) Inmarsat will have at least an 18 to 36-month first-to-market advantage compared to any subsequent licensee for ATG services Global Xpress S-band ACGC L-band Unmatched capacity and price

Europasat S-band satellite to be launched year end 2016 Integrated with Global Xpress and existing L-band options will give Pan-European capacity and coverage that cannot be

15 Integrated portfolio to serve all CAT needs 100% Global coverage, optimized over Europe Satellite solutions: GX Global offering for long-haul fleets SwiftBroadband premium, established cockpit service L-band options ACGC: Perfect solution for short-haul, narrow body, RJs over Europe Integrated satellite + ACGC: Global coverage complemented by ACGC when over Europe to deliver least cost, highest capacity service

L-band options ACGC: Perfect solution for short-haul, narrow body, RJs over Europe Integrated satellite

16 GX Alphasat-L Europasat-S Satellite Radios Integrated network In-seat entertainment Passenger devises Wireless distribution/ WLAN access point Connectivity and IFE server ACGC radio Satellite transport network Under Aero CGC Evolved packet core Outside Aero CGC LTE data transport network ACGC ground station Inmarsat confidential Internet, PSTN, private networks

ACGC radio Satellite transport network Under Aero CGC Evolved packet core Outside Aero CGC

17 Aircraft connectivity Integrated multi-network options GX terminal CGC terminal S-band terminal L-band terminal On-board server SW Router w/ WAN switching logic WLAN controller Web server/local portal Content delivery and management GSM AND LTE RADIOS

server SW Router w/ WAN switching logic WLAN controller Web

18 ACGC technology ideal for Aviation Light and efficient 4G LTE network technology operating in the S-band Latest generation technology High performance, high efficiency Superior passenger experience due to high throughput and capacity Low operating cost Lightweight, low cost equipment No large radome High reliability, low maintenance ACGC Antenna

Superior passenger experience due to high throughput and capacity Low operating cost

19 Integrated product served from one platform Feature-rich Gateway The Gateway will be the one stop Satellite/ACGC/3GPP(GSM)/Internet Service Provider platform that: is designed to scale to tens of thousands of aircraft, with each aircraft carrying hundreds of end-users Will enable our partners to: Provide advanced internet, voice, messaging, video, audio and content delivery services to global users, groups and individuals Disseminate proprietary and 3 rd party content and applications to passengers via multiple billing, revenue share and delivery methods (IFE, W-IFE and POD devices) Access interconnection and billing capabilities for GSM/LTE and Wi-Fi roaming across customers Deliver services across many end-user access platforms from legacy IFE, new IFE, W-IFE and PODs (laptop, tablet and phone)

users, groups and individuals Disseminate proprietary and 3 rd party content and applications to passengers via multiple billing, revenue share and delivery methods (IFE, W-IFE and POD devices)

20 Summary Evolution of cabin connectivity in Europe Redefining cabin connectivity to meet growing demand from passengers for high speed connectivity anywhere, anytime Global Xpress remains leading global aviation connectivity solution ACGC low cost/high capacity solution over dense traffic routes in Europe S and L-band provide even more options ACGC will be a phased build based on customer demand and the license process Integrated terminal design process underway Launch target UK network as early as 2015 ACGC + Global Xpress will deliver an unmatched bundle of seamlessly integrated connectivity to the aircraft* *25Mbps per aircraft per beam (1000 aircraft)

even more options ACGC will be a phased build based on customer demand and the license process Integrated terminal design process underway Launch target UK network

The In-flight Connectivity Revolution. Data Consumption Lessons from the ground. AVIATION > Solutions > Connectivity

The In-flight Connectivity Revolution Data Consumption Lessons from the ground AVIATION > Solutions > Connectivity In-flight connectivity is fast becoming a catalyst for change in day-to-day airline operations.