Satellite Communications Provider Downlinks One-Stop Shopping

April 1999
By Mark H. Kagan

Growing variety of services meets the challenge of orbital networking.

The plethora of satellite communications options now available to ground-based users has induced one company to offer its customers a wide range of products and capabilities. This market-driven strategy addresses a growing trend in which satellite users face an expanding and confusing variety of services and providers.

A leading Canadian satellite carrier is pulling together, under one roof, an increasing number of options to simplify its customers’ choices and ensure that services fit their needs. The company roof under which these options can be found will not remain in Canada for long, however, as it is moving its headquarters to the Washington, D.C., area.  The firm shifted its corporate and business center to the United States after winning a major contract to supply Inmarsat communication services to the U.S. Navy and completing the 1998 acquisition of Bethesda, Maryland-based IDB Mobile, the second largest U.S. Inmarsat carrier.

Stratos (formerly Stratos Mobile Networks), Toronto, is a multinetwork satellite service provider that offers a diverse range of communication services to users in a variety of maritime and land-based industries and activities. According to the company’s president and chief executive officer, Derrick Rowe, the move reflects the reality that “we’re an American company. Most of the company’s assets are in the United States, including California, Colorado, Florida and New York, and many, if not most, of our key executives are either located in or are from the United States.” Furthermore, he adds, “Washington [D.C.] is the capital of the satellite business in the world, and it’s where our major clients are located.”

Users of Stratos products and services include offshore oil and gas projects, international and coastal shipping, fishing boats and cruise ships, yachts, mining operations, humanitarian aid organizations, journalists and United Nations peacekeeping operations. Stratos also provides services to Canadian military and government agencies such as the coast guard, fisheries enforcement and emergency measures.

Rowe stresses that instead of trying to sell the technology, Stratos provides multinetwork, end-to-end solutions that service the requirements of the client, “which is a very simple business concept, but no one else did it before us. We go in and listen to our clients’ requirements and recommend the best solution for them,” Rowe states. “We want to make things simple for our customers. We will pick the best service installation team, products and network, and deliver a unique package. We then give them one-point service with one system level of service, one customer care program, and one bill. Other companies promote their own technology, whereas Stratos promotes solutions that use whichever technology works,” Rowe asserts.

“We can provide simultaneous voice and data as required,” Rowe adds. “We can provide the hardware from all the vendors and all the services in one bill. If one service doesn’t meet the customer’s requirements, we can replace it with something that does, depending on the contract.

“If a customer needs mobility or asks for affordability, we give them a ‘fit affordability’ product, such as Iridium,” he explains. “If someone asks for high-speed data communications, we give them the best high-speed data product,” which Rowe believes is Inmarsat. He points out that while the Iridium mobile satellite telephone service is a capable and affordable asset for government and military operations, it could not provide the high-speed data solution that the U.S. Navy required for its network-centric operations.

Among the partners that Stratos uses are Nera, Oslo, Norway, which is a leading manufacturer of Inmarsat equipment, and Motorola, Schaumburg, Illinois, and ESL for Iridium equipment. Stratos partnered with TDS, a Norfolk, Virginia-based naval equipment installation and retrofit contractor, and with ICTI, a Gaithersburg, Maryland-based software development house, on its contract with the Navy. Stratos and ICTI developed a software protocol that allows Secure Telephone Unit-III and other secure telephones to operate with the Stratos Inmarsat system.

“We also feel that it’s our responsibility to remain aware of changes in technology that better meet our customers’ requirements and look for those opportunities and provide those options to them,” Rowe adds. “If we don’t do that, someone else will, and they won’t remain our customers for long.”

In addition to providing multinetwork satellite communications solutions, Stratos also pioneers servicing arrangements for its customers. “A moderately heavy user of mobile satellite communications can now come to us and state its requirements, and we will provide the equipment free with the service,” Rowe declares.

Rowe believes that the satellite communications industry is headed in this direction, much like the cellular telephone industry. “Most customers don’t really want a satellite terminal company; they just want a phone call or data company—the hardware is irrelevant,” he explains.

A North Atlantic Treaty Organization-based group has approached Stratos to do business that way, according to Rowe. “They told us that they want the service, but they don’t want to own the communicators.”

Stratos won its first significant business with the U.S. government when the Navy awarded the company a Phase I contract in August 1998 to furnish full-time, Inmarsat-B, 64-kilobit-per-second, high-speed data-lease-channel mode communication services to forward-deployed naval vessels in two battle groups. “It’s the first time that the Navy has really had wide area network connectivity on a full-time basis for their forward-deployed resources,” Rowe points out.

These services provide automated digital network system, data, voice and fax services in multiplexed encrypted circuits, which support the Chief of Naval Operations’ Information Technology for the 21st Century (IT-21) project. IT-21 allows for the rapid exchange of information between naval and joint forces. The ability to provide full-time data services aboard its vessels is also a critical part of the Navy’s network-centric warfare strategy.

The contract win by Stratos marked a break in the near monopoly of Comsat in the U.S. government business area. “It was a hotly contested contract between us and our archrival, Comsat, and it was an important contract for us to win,” Rowe says. “We offered a very competitive price and a very innovative way of approaching the problem and the application.” Stratos claims that this $7 to $10 million contract was the single largest Inmarsat lead contract awarded in the world to date.

The Phase II contract, valued at up to $132 million over five years—one year with four options—is up for bid this spring. It will sustain the functionality of the first contract, which is scheduled to end in the early summer, and it will be expanded to cover up to 70 ships in four battle groups. The contract also calls for the service to be provided through the second-generation EK-2 Inmarsat satellites to furnish greater capacity.

Rowe asserts that Stratos has been on schedule and on budget with all its Navy deliveries. Deliveries involve bringing the Stratos network up to speed to handle the Navy’s communications requirements and having the end-to-end system working when the USS Enterprise and USS Kitty Hawk battle groups are deployed. “Phase I is really a proof-of-concept contract which, according to our feedback from the Navy, has done extremely well. We’re very proud of what we accomplished, and I can only describe it as a major step forward for us,” Rowe states.

Stratos deployed a global network in just 60 days, and to meet the Navy’s operational requirements, this included four satellites and an earth-station network that covered the Atlantic, Pacific and Indian Oceans. Part of the groundstation infrastructure was installed in Quebec, and Stratos partnered with Korean Telecom, the Korean Inmarsat signatory, to install the Stratos high-speed channel unit at its earth station. “We didn’t use the U.S.-based facilities for this application,” Rowe notes. Stratos then connected the entire network with the back-office facilities, primarily through cable, and delivered it to the Navy’s point of interface.

According to Rowe, a key factor in the contract award was Stratos’ prior experience performing identical services for the Canadian oil and gas industry, particularly for Hibernia, one of the largest offshore oil-drilling platforms in the world, positioned off the east coast of Canada. “It was a $6 billion project. We built all the satellite command and control facilities for it, and we are now running it on a 24-hour-a-day, 10-year contract,” he explains.

“During the delicate tow-out and final positioning of the platform phases, we provided all the fixed-facility wide area network and data monitoring capabilities. We’re pleased that our client wrote letters of recommendation to the U.S. Navy, stating that we had met their budgetary requirements and schedules and that we had exceeded their operational requirements for the entire duration of the program,” Rowe says.

The company has expanded dramatically over the past three years through acquisitions and strategic partnerships. Approximately 75 to 80 percent of its business is in the commercial sector, while 20 to 25 percent is in the government/military sector, a balance that the company hopes to maintain. “We’re a company that is trying to grow through acquisitions,” Rowe says. “We’ve demonstrated it with four in 1998. We plan on doing complementary acquisitions to provide new and expanded satellite service capabilities, perhaps more in the fixed and higher-speed satellite solutions.”

The company acquired MarineSat Communications Network, Jupiter, Florida, in early 1998, which was the largest U.S. distributor of MarineSat products and services. Last December, Stratos signed a contract making Litton Marine Systems an official distributor of Stratos mobile satellite products and services.

Stratos has reseller agreements with Iridium North America and Iridium SudAmerica Corporation to provide satellite mobile telephone and paging services in the United States, the Caribbean and parts of South America. The company expects to announce additional agreements with Iridium gateway operators in the near future, which will enable Stratos to sell Iridium service in multiple gateway regions and make it possible to provide consolidated billing to users based in different territories.

In September, the company introduced Stratos Mail, which allows ships equipped with Inmarsat-A/B Telex or Inmarsat-C to communicate directly via satellite with Internet electronic mail subscribers around the world.

Last October, the company signed a four-year agreement with American Mobile Satellite Corporation, Reston, Virginia, which made Stratos a top distributor of American Mobile marine services. These services include voice, circuit-switched data transmission and facsimile capabilities to transportation, field service, maritime, two-way messaging and telemetry customers in North America, the Caribbean and hundreds of miles of coastal waters.

In November, Stratos acquired Nova-Net Communications, Englewood, Colorado, a provider of private very small aperture terminal (VSAT) data networks that specialize in supervisory control and data acquisition applications for data collection and monitoring of customers’ remote assets such as oil and gas pipelines. The acquisition marked the first step by Stratos into higher speed, fixed satellite communications solutions. The small size and independent energy source of VSAT terminals allows them to operate in remote locations where other communications options might not be available or cost effective.

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