|IMAGINE YOU have been stranded on an uninhabited island like Tom Hanks in the movie Cast Away, what would you do to get help?
Chances are that you rack your brains to point of desperation and still end up stuck on the island.The above is a perfect example of when satellite communications takes center-stage.
In fact, satellite communications has fast become commonplace in our lives, assisting journalists, military personnel, mission critical aid workers and anybody who needs communications access to remote areas where terrestrial communications coverage is impossible.
Huge Market Potential
Unit sales of Mobile Satellite Services (MSS) terminals grew from 1,000 in 1980 to over 1 million in 2004. Demand has been projected to grow at a cumulative annual growth rate of 34.2% through 2010. (Source: Northern Sky Research)
It is little wonder then why Pytheas Conglomerate, an international investment management organization with investment portfolio of approximately US$1.7 billion, has decided to invest up to S$94.69 million cash in Addvalue Technologies, a local mainboard-listed company with a paltry balance sheet of only S$18.5 million in total assets as of 31 March 2008.
Despite its relatively small balance sheet, Addvalue is definitely not one to be taken lightly when it comes to satellite communications technology, the business forte of the company.
Being a key partner to many major players in the satellite communications industry, such as Inmarsat, Thuraya and SingTel, Addvalue is currently one of the only 3 authorized global developers-cum-suppliers, and the only one in Asia, of the portable Broadband Global Area Network (BGAN) satellite terminal.
Apart from extreme polar areas, BGAN is the world’s first mobile communications service to provide both voice and broadband data simultaneously on a global basis that is dependable and secure.
Touted as the future ‘GSM’ of satellite terminals, its superiority over the other satellite systems lies in its terminals, which are lightweight and can be easily set up by anyone.
BGAN is also the only portable satellite system on the market with better quality and speed for both voice and data services, as well as more attractive airtime rates.
In 2007, London-listed Inmarsat had the world’s largest market share for BGAN satellite services. (Source: TMF Associates)Addvalue, being one of Inmarsat’s 3 sole equipment partners, is primed to ride on an expected dominance of BGAN-related products and services in the market for satellite communications.
To top it off, the company is able to enjoy low competition due to niche market and high barriers of entry as the business environment for BGAN equipment providers is highly regulated, unlike that of handphones.
Beginning Of Something Big
In comparison to its two main rivals, Hughes and Thrane & Thrane, whose total assets stood at $1,648.2m (as of 31 March 08) and $427.6m (as of 30 April 08) respectively, the potential for Addvalue to grow is massive.
With the expected capital injections from Pytheas, Addvalue will be commercially and technologically ready to roll out more products in the upcoming nine months, according to Chairman and CEO Colin Chan in a recent press conference.
Furthermore, Addvalue will be able to capitalise on Pytheas’ wider global reach and strong presence in fast growing markets, in particular the Middle East, Central and Eastern Europe, South America and the African continents, thus enhancing the company’s position as a significant player in global satellite communications.
Originally published at www.sharesinvestment.com , this article is reproduced here as part of a collaboration with NextInsight.