Telstra merges mobile satellite business with KPN

Telstra will merge its global satellite business with Netherlands Telco Koninklijke KPN in order to strengthen their position in the global mobile satellite communications market.

The new company will combine KPN's Satcom business under the brand Station 12 and Telstra's mobile satellite business. The venture will deliver all Inmarsat services, including voice, fax and data services and also broadband Internet services via satellite, according to the companies.

The new venture will start out with a combined global market share of around 24 per cent in this market sector, the companies said in a statement.

Doug Campbell, group managing director of Telstra's wholesale and international business unit, said in the statement that the global satellite communications business is undergoing a period of consolidation, with mergers and acquisitions likely to result in a few key global alliances that will resell satellite capacity and content to end users.

KPN and Telstra will invest a combined $US200 million in existing assets to launch the venture, and expect revenues in 2000 to be about $250 million.

KPN will hold 65 per cent of the shares in the new company with Telstra holding the balance. The company will be headquartered in The Hague in The Netherlands and will begin operations early next year, the companies said in a statement.

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