Royal Dutch Telecom News

KPN (Royal Dutch Telecom) and Telstra have agreed to form a joint venture company by merging their respective mobile satellite communications businesses. The new company, which will trade as Station 12 - is positioned to be a major player in the global satcom industry. Contributing an approximate combined figure of $145 million in net tangible assets to launch the venture, with KPN holding 65 percent of equity shares and Telstra holding the remainder, the new company has projected an initial annual revenue around $250 million.

The competitive satellite communications market has taken an additional step toward consolidation, with Station 12 — an independent operating business owned 65 percent by KPN (Royal Dutch Telecom) and 35 percent by Telstra — leading the way having the intention of cornering the market. Station 12 recently outlined its strategy to double its size in the next three years, both through organic growth and acquisitions. Station 12 already claims to have 24 percent of the competitive Inmarsat maritime and mobile satellite communications sector, with current annual sales of $215 million. This is expected to rise to $500 million by 2003. The company is the largest customer and shareholder in Inmarsat, the leading provider of wholesale satellite airtime.