Inmarsat rockets on successful launch of Global Xpress satellite

Shares in Inmarsat took off on Friday afternoon after the successful launch of a rocket carrying the third and final satellite of its $1.6bn Global Xpress superfast broadband programme.

The Russian Proton rocket was launched at 1244 BST on Friday 28 August from the Baikonur Cosmodrome in Kazakhstan, as scheduled, with a live video available for keen investors and satellite fans.

But a spokeswoman for the FTSE 100 company said it will not be able to determine whether or not the launch was a success until roughly 15 hours and 31 minutes following lift-off.

A press release will be available on Saturday morning and a regulatory news statement (RNS) will be published on Tuesday morning, after Monday's UK Bank Holiday.

This was the first time a Proton rocket had been used since May, when a rival satellite operator's launch ended with a crash.

Separation of the satellite in orbit is expected early on Saturday and Inmarsat will be able to confirm commercial operation when the satellite reaches its orbital position in two to three months’ time, analysts said.

The third satellite, Inmarsat-5 F3, will cover the Pacific Ocean region and will, together with the first and second sister satellites, I-5 F1 and I-5 F2, create the world’s first globally available, high-speed mobile broadband service delivered through a single provider.

Inmarsat said Global Xpress will deliver broadband speeds around 100 times faster than its fourth-generation service.

GX will deliver global Ka-band services with improved broadband speeds of up to 50Mbps and management has targeted an
additional $500m of annual revenues from GX by 2020.

Chief executive Rupert Pearce said: "The completion of the Global Xpress constellation will be a significant milestone for our organisation and is fundamental to the delivery of a new era in mobile satellite communications which will change the future for us all."

Nomura said that given the successful launch today, it expected further medium-term revenue guidance to be issued by management, potentially at the investor day in October but it remained neutral on the company due to its "stretched" valuation.

"After a difficult couple of weeks with launch failures and subsequent launch delays, we are buoyed by this successful launch coupled with the successful Ariane 5 launch last week," analysts wrote. "We think the fundamentals of the satellite sector remain visibility of cash flows, high barriers to entry, and an attractive combination of strong top-line growth and dividend support."

Nomura thinks Inmarsat’s valuation is too optimistic as high expectations for the GX opportunity are already baked in along with revenues assumptions for a "too fast" ramp-up from the company's plans for aeroplane passenger inflight connectivity.