Inmarsat Signs New Distribution Deals; Buys Stratos

By Peter B de Selding

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PARIS — Mobile satellite services operator Inmarsat has signed new distribution agreements with "all of its major partners" and will begin operating under the new arrangements immediately, London-based Inmarsat announced April 15. The company has also completed its acquisition of Stratos Global Corp., one of its two major distributors, as expected.

Inmarsat had spent months negotiating tougher terms with its distribution partners. The purchase of Bethesda, Md.-based Stratos in December 2007 removed a potential hurdle to the new distribution arrangement insofar as Inmarsat's distributors were being asked, under the new contract terms, to give up payments they had been receiving from Inmarsat under the old regime.

The other major distributor, Vizada, had held out until the last minute before coming to terms. Stratos and Vizada together account for more than two-thirds of Inmarsat's annual revenue.

One of the key features of the new agreement is to reduce the amount of discounts that large distributors receive either year from Inmarsat once they have passed a fixed level of annual sales.

Inmarsat Chief Executive Andrew Sukawaty stressed in an April 15 statement that Inmarsat will give equal treatment to all its distributors and will not favor its new Stratos subsidiary. Stratos was purchased by Inmarsat, through a Canadian company, for $636 million including Stratos' debt.