Source: EURLEX
Language: en
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No C 304 / 6 EN Official Journal of the European Communities 15 . 11 . 95

Notice pursuant to Article 19 ( 3 ) of Council Regulation No 17 (') concerning a request for

negative clearance or an exemption pursuant to Article 85 ( 3 ) of the EC Treaty

( Case No IV / 35.296 — Inmarsat-P )

( 95 / C 304 / 06 )

( Text with EEA relevance )

I. INTRODUCTION Ocean, one over the Pacific Ocean and one over the
Indian Ocean . A third generation of satellites is currently

On 11 November 1994 the International Maritime being built and its expected to become operational in

On 11 November 1994 the International Maritime
Satellite Organization, which, in December 1994, 1996 .
changed its name to the International Mobile Satellite
Organization ( Inmarsat ), notified to the Commission the
creation of an affiliate, I-CO Global Communications The
Ltd ( ICO ), to finance, construct and operate the
Inmarsat-P world-wide mobile satellite-based telecom ­
munications system . ICO was actually incorporated as a and
UK company with limited liability on 16 December 1994
after an extraordinary meeting of the Inmarsat Assembly data
decided to go ahead with it . The Inmarsat assembly also fleet
decided that signatories of Inmarsat would be free to for
decide whether or not to invest in ICO . A large number
of signatories subsequently expressed an interest in doing offers
so, and, finally, 38 of them decided to invest during a 1991
meeting held on 17 to 20 January 1995 providing ICO text
with more than the financial support initially expected .
In June 1995, ICO was restructured ; it consists now of 3 790
three entities, a holding company and an operating
company registered in the Cayman Islands and a
management services company registered in the United
Kingdom .

The services offered by Inmarsat include direct-dial
telephone, telex, facsimile, electronic mail and data
connections for maritime applications, flight-deck voice
and data, automatic position and status reporting and
direct-dial passenger telephone for aircraft, two-way
data exchange, position reporting, electronic mail and
fleet management to land transport . Inmarsat is also used
for emergency communications at times of human
disaster and natural catastrophe . In addition, Inmarsat
offers several different mobile communication systems : in

1991 Inmarsat launched its Inmarsat-C low-data rate

text and data services and in 1993 its Inmarsat-M
portable satellite phone . By the end of 1993 there were
3 790 Inmarsat-C and 333 Inmarsat-M terminals in use .

Inmarsat had been developing the Inmarsat-P concept
for the last few years .

ICO and the Inmarsat-P system are at a early stage of
development . The first satellite of the system will only be
launched on 31 July 1999 and the full operability of the
system is foreseen for 31 December 2000 . In addition, no
radio frequencies have yet been allocated to Inmarsat-P
and some of the required technologies still remain under
development or have not yet been applied in systems
directly analogous to Inmarsat-P .

II . PARTIES

1 . Inmarsat is an international inter-governmental
organization which provides mobile satellite communi ­
cations world-wide . Established in 1979 to serve the
maritime community, Inmarsat has since envolved into
the major provider of mobile satellite communications
for commercial and distress and safety applications at
sea, in the air and on land .

Any country in the world is entitled to be an Inmarsat
member . At the third quarter of 1994, there were 75
member countries . Member countries designate a
national entity to be its signatory, usually the ( inter ­
national ) telecommunications operator or the satellite
service provider . Signatories have an investment share in
Inmarsat which is proportional to the use they make of
the system . This principle has been abandoned for the
setting-up of ICO .

Inmarsat has invested $ 150 million in ICO corre ­
sponding to a 10,7 % of the ordinary shares of the
company and entitling it to 15 % of the voting rights . In
addition, Inmarsat has received 700 000 B shares in
exchanges for its in-kind contribution ( 2 ). In-kind
contributions by Inmarsat to ICO have been paid

( 2 ) In-kind contributions refer to expenditures made by

Inmarsat ' space segment ' consists of four geostationary to Inmarsat compensations attributable to to the Inmarsat development for benefiting of Inmarsat-P from and its
second generation satellites located two over the Atlantic experience in the satellites communications market, for the

use of Inmarsat 's logo and trademarks and for the
compromise by Inmarsat not to procure a separate space
segment designed for the purpose of providing hand held
(') OJ No 13, 21 . 2 . 1962, p . 204 / 62 . services other than from ICO .

# 15.11.95 riNl Official Journal of the European Communities No C 304 / 7

for in shares in accordance with an independent
valuator . The B shares will be immediately convertible
into ordinary shares, provided that if Inmarsat does so
prior to 1 January 2002, it cannot exceed 15 % of the
voting rights for more than 90 days .

Investors in ICO will be granted rights and opportunities
to operate elements of the Inmarsat-P ground segment
and to act as wholesalers and / or retailers for the
distribution of the services to be provided through the

system .

3 . ICO

2 . 37 signatories ( or subsidiaries of signatories ) of
satellite(s Inmarsat, ) operators all of, them freely telecommunications decided to join ICO and and / or mediate ICO
have signed subscription agreements with ICO . None of over
them controls more than 6,7 % of the ordinary shares of ground
ICO . ICO 's shares are split the following way : 38,7 %
of the shares are in the hands of Asian signatories, services

12,2 % are in the hands of Arabic signatories, 9,4 % are
in the hands of Latin-American signatories, 6,7 % are in
the hands of the US signatory, 3,9 % are in the hands of
non-EU European signatories ( 3 ), 1,7 % are in the hands
of African signatories and 0,1 % belong to Australia .

ICO hasd been established for the provision of an Inter ­
mediate Circular Orbit space segment ( i.e. the satellites
over which the service will be provided ) and associated
ground infrastructure for the delivery of Inmarsat-P
hand-held and other ancillary telecommunications
services . ICO will then be offering what is called a
world-wide satellite-personal communications system
( S-PCS ) ( 6 ). ICO will mainly be a network provider .
However, it can require wholesalers to provide a
minimum set of services of a standard quality in order to
ensure global interconnectivity .

ICO is obliged to follows a number of principles
included in the memorandum of association :
EU companies account for 16,9 % of the ordinary
shares . Of the six companies so involved, five are
incumbent telecommunications operators : Telefonica de
Espana ( Spain, 2,2 % ), Telecom Finland ( Finland, ( i ) it shall serve all areas where there is a need for the
0,1 % ), OTE ( Greece, 3,9 % ), CPRM ( Portugal, 1,8 % ) services ;
and PTT Telecoms (") ( the Netherlands, 2,2% ); the
sixth is Detemobil, the mobile subsidiary of Deutsche
Telekom ( 6,7 % ). ( ii ) it shall act exclusively for peaceful purposes, and

( i ) it shall serve all areas where there is a need for the

services ;

( ii ) it shall act exclusively for peaceful purposes, and

( iii ) it shall not discriminate in service provision on the

basis of nationality, provided that geographic price
This repartition of the shares clearly differs from the differentiation should be permitted based on costs,
current structure of Inmarsat itself ; where 75 % of the competition or similar considerations .
shares are controlled by European and North-American
signatories .

This structure could be modified in the near future, as it

is foreseen that ICO 's board may issue additional equity
of up to US $ 600 million that will be offered to strategic
investors, including companies other than Inmarsat and
its signatories, i.e. the spacecraft suppliers and handset
manufacturers ( 5 ).

( 3 ) Swiss Telecom ( 2,2 % ), Cyprus Telecomms ( 0,1 % ),
Telemalta ( 0,1 % ), Polish Telecom ( 1,4 % ) and Morsvias ­
putnik of Russia ( 0,1 % ).
( 4 ) It is worth noting that three out of four members of

Unisource are involved, together accounting for $ 94
million, or 6,7 % of the shares .
( 5 ) As regards the former, ICO has finally chosen Hughes as

the manufacturer of the satellites . Hughes will also become a
strategic partner of ICO ; whereas ABB, Ericsson and Nokia
among the latter have maintained contacts with Inmarsat .

ICO will be managed by a Board of Directors ( BOD )
made of 13 members ( including the CEO ). Ten of its
members are elected by cumulative voting . The first
BOD has been elected for a two-year term . Thereafter

BOD members ( other than the CEO and the two
directors appointed by Inmarsat ) will serve for one-year
terms . After the initial meeting of shareholders held on
24 January 1995, three directors belonging to EU share ­
holders have been elected to the BOD . The BOD will

delegate certain executive authority to the management
team of the company, which will be led by the CEO, to
be elected by the BOD . The management will be
responsible for carrying out the directions of the

( 6 ) The LEO term / MEO ' S-PCS ' or ' Mobile system Satellite ' is synonymous Systems with ( MSS the )' commonly terms ' Big

seen in the press and used by ITU . S-PCS has been the term
used by the Commission in the ' Communication from the
Commission and proposal for a Council resolution on
satellite personal communications ', COM(93 ) 171, 27 April

1993 .

No C 304 / 8 EN Official Journal of the European Communities 15 . 11 . 95

BOD and for informing them of progress in the
company 's development and business .

Decisions by the BOD will be adopted by simple
majority, although some important matters will require a
two-thirds majority ( i.e. nomination and dismissal of the
chairman of the BOD and of the CEO ). In view of the
above, and given that the powers of the general assembly
do not seem to be very substantial, it would seem that
the company will be controlled by the BOD .

III . THE INMARSAT-P SYSTEM

1 . The network

The system will consist of the following elements : the
space segment, including satellites and tracking,
telemetry and control stations ( TT & C ) ( 7 ); several
network control stations ( NCS ) ( 8 ) directed by a network
control centre ( NCC ); the user handheld terminals ; the
P-net of interconnected satellite access nodes ( SAN );
and the gateways connected to the P-net .

A majour feature of the system is its integration of
mobile satellite communications capability with public
land mobile networks and public switched telephone
networks . So, the system will route calls from land
networks through SANs which will select a satellite
through which the call will be connected to a handheld
terminal ( and vice versa ).

The space segment will consist of a constellation of 10
satellites to be deployed in intermediate circular orbit
( 10 335 km above the Earth 's surface ). The satellites will
be arranged in two planes of five satellites each . The
system will also include two spare satellites in the same
orbit, bringing the total number of satellites to 12 . This
configuration has been designed to provide optimal
coverage of the entire surface of the Earth at all times,
so that more than one satellite will nearly always be
available at the same time to any user, which increases
the likelihood of successful and uninterrupted calls .

( 7 ) TT & C stations will track the movements of the satellites

and adjust their orbits to maintain the constellation . In
addition they will monitor the general conditions of the
satellites . There would be five TT & Cs .

( 8 ) The NCSs, acting through IT & Cs and SANs, will control

the transponder linkages between the feeder and service
antennas on the satellites .

The system will use a frequency in the range of 1,9 / 2,2
GHz ( 9 ) for user links ( that is links between the satellites
and the user terminals ).

The satellites will be linked to a ground backbone
network ( the P-net ) consisting of 12 interconnected
SANs located throughout the world . SANs will comprise
earth stations with multiple antennas for communicating
with satellites and associated switching equipment and
databases . They will be the primary interface with the
satellites for coordinating and routing traffic and main ­
taining certain subscriber data . SANs will be owned by
ICO but installed and operated by ' qualified
operators ' ( 10 ). The P-net will be managed by the NCC .
In order to provide global roaming, the P-net will
include a system for management of user mobility which
will be based upon existing digital cellular standards such
as GSM .

Gateways are switches which will serve as the link
between the SANs and the public terrestrial networks .
The most likely gateway implementation is an incre ­
mental hardware and software modification to existing
switches . They will be owned by third party operators
which will be responsible for the implementation and
maintenance of these facilities in conformity with ICO 's
technical and operational requirements . It is expected
that, in reality, most gateway owners will be wholesalers,
retailers and / or signatories of Inmarsat and / or ICO
shareholders . In this respect, the parties have stated that
the terms and conditions of the wholesaler and / or
retailer authorizations will not include any form of
provision binding them not to compete with competitors
of ICO or giving it preferred market access .
Furthermore, existing or planned EC regulation will be
applicable to the operation of gateways, in particular as
regards access .

The total system 's implementation costs are estimated at
nearly US $ 3 billion .

Finally, hand sets will be produced by major manu ­
facturers of equipment, benefitting from terrestrial

(') This frequency is different from those reserved by the
WARC-92 conference for user links in S-PCS systems
(1 610-1 626,5 / 2 483,5-2 500 MHz ) and allocated in the
United States by the Federal Communications Commission
( FCC ) of the US to five US-based S-PCS systems, including
Iridium, Globalstar and Odyssey, on 31 January 1995 .
( 10 ) ICO will select SAN operators on commercial grounds .

However, it will give consideration to favouring direct
investors in ICO with preferential rights to operate SANs .

15 . 11 . 95 | EN Official Journal of the European Communities No C 304 / 9

cellular technologies . Most hand sets will be capable of
dual-mode operation with both satellite and terrestrial
cellular ( including GSM systems ), so that they will be
able to select, either automatically or under user control,
satellite or terrestrial modes of operation .

On the other hand, the board is entitled to nominate
more than one wholesaler in one territory if necessary to
meet strategic requirements, if the original wholesaler
fails to achieve its performance requirements or if
required by applicable national laws or regulatory
authority .

In many cases, wholesalers will own and operate
2 . Distribution of the services gateways and possibly they will also be the SAN

operators .
The available information concerning the future
distribution of the ICO services is limited to the broad
principles contained mainly in the information
memorandum included in the notification and detailed As indicated above, where no wholesaler is authorized,
below . This is not supported by the relevant agreements Inmarsat itself will be entitled to act as a non-exclusive
that, according to the parties, have not been drafted yet . wholesaler .

The terms and conditions of the wholesalers auth ­
Although nothing prevents ICO from supplying services, orizations are to be developed by the management and
Board of ICO .
it is essentially to be considered as a network provider . It
will, nevertheless, prescribe a minimum set of services
and / or features to be offered in all territories in order to
ensure adopt guidelines global interconnectivity for retailers . According . In addition to, the ICO parties could, The number of wholesalers and their respective terri ­
such guidelines, if adopted, will not cover pricing or tories are not known yet .
other competitive conditions .

Wholesalers will arrange for all aspects of the provision
of the services within their territor(y)(ies ). They will
purchase Inmarsat-P services from ICO ( basically air

The actual telecommunication services will be provided time ) and resell it to retailers . They will be responsible
to end-users through a network of wholesalers and for arranging installation and operation of gateways, for
retailers, responsible over one or more national markets, links between the P-net and the gateways, for intercon ­
which will provide the services at their own risk and nection to the public networks and for establishing
according to terms agreed independently between them . satellite-cellular integration within their countries . In
Such retail agreements do not exist yet . addition, they, together with retailers, will be responsible

for the provision of value added and supplementary
services ( voice messaging, call waiting and forwarding
and so on ) on top of the mobile voice service the
Inmarsat-P system is designed for . In summary, they will
A. Wholesalers perform within their territories a role similar to that of a
cellular network operator .

Any investor which has invested at least $ 20 million in

ICO has an option to become a service wholesaler in its
nation . In case that it accepts to become wholesaler, it
shall agree to meet specific performance requirements to
be defined by ICO .

B. Retailers

Retailers will be responsible for marketing and retail sale
of the services and terminals and will have primary
contact with end-users within one country . They will
also be responsible for all aspects of account
Appointment of wholesalers for territories where no management and customer care including customer
investor has exercised its option or where there is no credit, billing, accounting and related administration .
investor will be awarded the biggest bid in an auction .
Each investor will receive a voucher for every $ 1 of
investment . Vouchers are the currency used in the
auction to obtain wholesaler rights over different terri ­ Retailers will be appointed by wholesalers consistent with
tories . At the discretion of ICO 's board, these territories guidelines provided by ICO . They will purchase services
can be awarded on a national or regional basis . only from authorized wholesalers .

No C 304 / 10 EN Official Journal of the European Communities 15 . 11 . 95

All Inmarsat signatories have the right to become of the actual total costs incurred by Inmarsat in fulfilling
non-exclusive retailers . Apart from that, the nomination the specific task ( Articles 1.17 and 4.1 respectively ).
of retailers will be at the discretion of wholesalers .

Also as part of the services contract both parties have

It is envisaged that retailers will be free to sub-contract
some or all of their services to resellers, distributors and

dealers .

Retailers will perform a role similar to that of an air-time
reseller in cellular terrestrial mobile services .

C. Tariff structure

ICO will set the structure and level of prices for services
provided to the national services wholesalers . The latter,
in turn, are expected to have discretion in the level and
structure of prices charged to retailers . Retailers for their
part will also have price discretion in charging
end-customers . In respect of any customer, ICO ( n ) will
bill wholesalers, which then will bill retailers, which in
their turn would finally bill resellers or end-customers .

agreed that ICO will buy a minimum level of services
from Inmarsat during the operational life of the
agreement ( Articles 4.3 and 4.4 ).

In addition to its involvement with ICO, Inmarsat will
continue to provide its existing geostationary orbit
( GEO ) satellite-based mobile satellite communications
and allied services, although it has agreed, subject to
certain conditions, not to procure a separate space
segment designated for the purpose of providing
handheld services other than through ICO ( point 2,
schedule 2 of the Inmarsat share subscription
agreement ).

In exchange for Inmarsat 's ownership of a 10,7 ° / o of the
ordinary shares of ICO, Inmarsat will have the right to
appoint two members of the ICO 's board of directors .
These directors are required to act in the ' best interest '

of [ ICOl .

End-customers will have to pay a connection fee, a
monthly fee and a tariff per voice minute traffic .
Also, as part of its investor benefits, Inmarsat will have
the right to act globally as an exclusive wholesaler for
maritime and aeronautical services provided to

It is that end-customers will in be non-hand-held terminals so long as Inmarsat maintains

It is expected that end-customers will, in principle, be
registered in one out of two categories : global
customers, usually highly mobile international business
travellers, will be charged higher tariffs, as their use of
the system is likely to entail more extensive use of the
system 's elements . National customers will be charged
lower tariffs, but they will only have access to the SANs
covering their home country . Customers will have the
option of changing from one category to the other as
desired and subject to commercial considerations .

3 . Relationships between Inmarsat and ICO will be
governed by a services contract and the subscription
agreement entered into by the two parties . Pursuant to
the services contract Inmarsat will provide ICO the
services that the latter needs to put in place and operate
the Inmarsat-P syswtem . The services contract will last
until 30 April 1998, although it can be renewed for a
further three year period . Pursuant to that agreement, all
contracts relating to equipment, facilities, services and
other common activities provided by Inmarsat to ICO
will be negotiated at arm 's length and paid on a fully
allocated costs basis plus a reasonable fee of 6,5 %

15 % of the voting rights in ICO and, in addition,
Inmarsat shall have the right to be appointed
non-exclusive wholesaler in any country or region where
no investor is interest in becoming wholesaler .

Finally, a consultation mechanism will be established
between Inmarsat and ICO in respect of the harmon ­
ization and evolution of their respective range of
services, and in respect of the use or sharing of each
other services or facilities ( point 4, schedule 2, Inmarsat 's
share subscription agreement ). According to the parties,
it aims at reinforcing the certainty that Inmarsat 's public
service duties will not be jeopardized by the launching of
Inmarsat-P . The precise form of this mechanism has not
been formulated yet .

IV . RELEVANT MARKET

1 . Product market

The term S-PCS is used to denote a network used to
( u ) SAN operators will bill ICO for their activity on the basis provide satellite personal communications services,

agreed in their operating contracts . usually on a worldwide basis . At least some of the

15 . 11 . 95 EN Official Journal of the European Communities No C 304 / 11

relevant technologies were developed in the framework
of R & D military programs in the US . AS-PCS system
encompasses a constellation of LEO ( low earth orbit ),
MEO ( medium earth orbit ) or GEO ( geostationary earth
orbit ) satellites ( 12 ), their control earth stations and a
number of gateway earth stations through which access
will be provided to terrestrial fixed or mobile networks .

Such a configuration will support full user mobility and
identification by a single number anywhere in the world,
using ' intelligent ' features, similar to those of digital
terrestrial cellular systems ( such as GSM ), that will be
located either in earth stations or in the satellites them ­
selves . Substantial efforts are being devoted by
equipment manufacturers to develop light hand-held
portable terminals capable of either satellite-only or of
dual coverage ( terrestrial when within cellular terrestrial
coverage, and satellite when outside it ). It is expected
that voice service will be the primary application for
these networks, but other significant segments will
involve low rate data transmission, positioning, tracking
and paging .

S-PCS represent the ability to maximize mobility of
users, by providing global seamless coverage, in
particular in remote areas where terrestrial services may
be uneconomic . ' Global seamless coverage ' means not
only that the user can move anywhere, but also that the
communications system can ' move ' to serve new fixed or
' stationary ' users : the system is never out of range .
S-PCS is expected to act as complement and / or
substitute for wireless terrestrial mobile technologies
( including GSM ( 13 ) and digital cordless telephony within
a fixed radius — DECT ). In this respect, it will be
offered by terrestrial cellular mobile network operators
( such as GSM in the European Union ) as an additional
feature priced at a premium rate . In addition, it is
expected to act as a complement and even a substitute
for the public switched fixed telephone network,
enhancing service coverage in remote areas of low popu ­
lation density and / or where the terrestrial infrastructure
is very poor . Another important use of S-PCS will be as
a substitute for cellular mobile telephony in areas where
the cellular network has failed to penetrate ( i.e. rural

parts of the developed world and both urban and rural
parts of lower income countries ).

In this respect, Commission studies ( 14 ) predict that the
greatest potential by far in the S-PCS market in terms of
numbers of subscribers will be for communities in less
developed regions of the world as a substitute for ' fixed
service ' where fixed networks have yet to be rolled out
or are very poor . Central and Eastern Europe represent
an important customer base in this context, which could
be accessed from gateways within the EU .

In any event, major users of S-PCS in the EU will be
international business travellers using their dual terminals
in the terrestrial mode where within a given network and
switching to satellite in areas outside terrestrial coverage
or with incompatible networks .

A feature of these S-PCS systems is that they pose a
number of unresolved regulatory issues in particular for
the EU :

— contrary to what the situation is in the US, where the

Federal Communications Commission ( FCC ) granted
frequencies to five S-PCS in January 1995, the EU
has not yet adopted a coordinated approach to the
licensing of these systems ( 15 ).

— S-PCS regulation requires solving a number of
additional questions ; first, the criteria ( technical and
above all financial ) to select S-PCS providers, and
second, the licensing ( on a national or supra-national
basis ) of gateway operators .

2 . Geographical market

As to the geographic market, notwithstanding the
particular commercial arrangements that could be
offered in the future to precise categories of potential
(,2 ) LEO satellites are located around 900 km over the Earth . customers, the Inmarsat-P system to be managed by ICO

Full coverage of the Earth 's surface would require a is aiming at a global coverage, and so the relevant

Full coverage of the Earth 's surface would require a
minimum of 48 LEO satellites .

MEO satellites are located around 10 000 km over the
Earth . Full coverage of the Earth 's surface would require a
minimum of 10 MEO satellites . The Intermediate Circular
Orbit ( ICO ) to be used by ICO belongs to this category .
GEO satellites are located at 36 000 km over the Earth . Full
coverage of the Earth 's surface would require only three
GEO satellites .

( 14 ) See ' Satellite Personal Communications and their conse ­
quences for European Telecommunications, Trade and
Industry '. Report to the European Commission ( DG XIII )
by KPMG Peat Marwick, March 1994 .
( 15 ) In addition, the International Telecommunications Union 's

( ITU ) 1995 World Radiocommunication Conference
( WRC-95 ) held in October 1995 focussed on frequency
issues relating to satellite communications .

( 13 ) It is expected that the price differential for dual-mode
( satellite and GSM ) versus single-mode ( GSM only ) will be
as low as 10 % .

No C 304 / 12 EN Official Journal of the European Communities 15 . 11 . 95

geographical market to be considered is worldwide in

scope .

3 . Competition in the future worldwide S-PCS market

A number of alternative projects are known to be trying
to offer hand-held telecommunication services through
satellite, some of them ( the so-called ' little LEOs ') have
a more limited product ( usually they will not provide
voice services ) and / or geographical coverage, others ( the
so-called ' big LEOs ') are aiming at the same relevant
market as ICO . Generally speaking, with the only major
exception of ICO itself, most planned S-PCS systems are
US-led initiatives . As of now, there is no prospect of a
European-led world-wide S-PCS system . However,
many European companies are substantially involved in
several of the announced S-PCSs . The most important
competitors of ICO ( 16 ) will be :

— Iridium

— Globalstar

Globalstar intends to put in place a S-PCS system
using 48 LEO satellites . The Globalstar consortium is
led and sponsored by the Loral Corporation, a
leading United States defence electronics and space
company . Partners / contractors include the European
aerospace companies Alcatel ( France ), Aeorospatiale
( F ), Alenia (I ), Deutsche Aerospace ( D ) and Tesam,
a joint venture created by Alcatel and France
Telecom . The total cost of the system is estimated at
US $ 2 billion .

Globalstar expects to be operational in the US
around 1999 to 2000 and globally, around five years
later . Globalstar will also be offering voice and data,
as well as tracking services .

—
Odyssey

The Odyssey S-PCS system is supported by the US
aerospace company TRW and the Canadian telecom ­
munications operator Teleglobe Inc . Odyssey will
consist of 12 MEO satellites and will be operational
by 1999 .

Motorola, a major US telecommunications equip ­ aerospace company TRW and the Canadian telecom ­
ment manufacturer, plays the leading role in the munications operator Teleglobe Inc . Odyssey will
Iridium consortium for a LEO S-PCS system . A consist of 12 MEO satellites and will be operational
number of European companies are participating by by 1999 .
way of partnership agreements and / or investment .
These include STET ( the Italian state holding
company, majority owner of Telecom Italia ) and
Vebacom ( subsidiary of the major German
conglomerate VEBA AG ). S-PCS systems offering global mobile communications
using hand-held terminals represent a market which is
expected to result in revenues of ECU 10 to 20 billion
during the next decade . Due to the scarcity of

Motorola Satellite Communications is in charge of frequencies, the very heavy financial implications
spacecraft construction but Iridium itelf will own and involved in launching and operating the large number of
operate the system once in place . Lockheed Corp. satellites needed for such systems, and the high level of
( USA ) is contracted to build 125 LEO satellites for market uncertainty, however, it appears to be unlikely
Iridium by the year 2003 . Other partners / investors that there will be more than a few major players, at least

at the world-wide level .

Motorola Satellite Communications is in charge of
spacecraft construction but Iridium itelf will own and
operate the system once in place . Lockheed Corp.
( USA ) is contracted to build 125 LEO satellites for
Iridium by the year 2003 . Other partners / investors
include Krunichev Enterprise ( Russia ) which will
launch the satellites with Proton rockets, Scientific
Atlanta Inc ( USA ) which will develop and manu ­
facture the hand-held units as well as the satellite
earth terminals, and Sprint, the third United States
long-distance telecommunication carrier . The total
cost of the system is estimated at US $ 3,8 billion .

V. THE NOTIFIED AGREEMENTS

At the time of the notification, only the memorandum
and articles of association of ICO had been drafted .
They were included in the notification together with the
information memorandum that was made available to

potential investors in ICO . Later on, as part of the reply
to a formal request for information, the parties submitted
on 6 March 1995 copies of ( i ) the standard share
subscription agreement signed by all investors ; ( ii ) the
( non-exclusive, irrevocable, non-transferable, worldwide )
intellectual property rights licence between Inmarsat and
ICO and ( iii ) the ( non-exclusive ) service mark licence
between Inmarsat and ICO, together with an addendum
to the information memorandum . Finally, on 26 April

Iridium plans to be operational with a limited number
of satellites by 1997 to 1998, and expects 1,5 million
subscribers by the year 2000 . It will offer voice,
paging and data services .

(") The Commission has commenced investigations at its own

initiative on Iridium and Globalstar ( see IP / 95 / 549 of 7
June 1995 ).

15.11.95 fENl Official Journal of the European Communities No C 304 / 13

1995, the parties submitted the services contract between
Inmarsat and ICO . With these agreements, information
regarding the implementation and operation of ICO is
now complete .

However, a number of agreements and relevant pieces of
information are still missing concerning the distribution
of ICO 's services once the system is operational . These
at least include the nomination of wholesalers and terri ­

tories granted to them, the terms and conditions of the
wholesaler authorizations, the guidelines to be adopted
by ICO for the appointment of retailers, the terms of the
retailer authorizations as agreed with wholesalers and
the agreements to be signed with cellular terrestrial
operators for the joint offering of terrestrial / satellite
services ( and terminals ) to customers . In their absence, it

is not yet possible to take a final position in respect of
the aspects of ICO affected by the missing information .

The Commission intends to take a favourable view
pursuant to Article 85 of the EC Treaty and Article 53 of
the EEA Agreement towards the creation of ICO and
the relationship between Inmarsat and ICO as described
in the present notice . Before doing so, it invites
interested third parties to send their observations within
one month of the publication of this notice to the
following address, quoting the reference ' IV / 35.296 —
Inmarsat-P ':

Commission of the European Union,
Directorate-General for Competition ( DG IV ),
Directorate C,
Rue de la Loi / Wetstraat 200,
B-1049 Brussels .

Recapitulation of current tenders, published in the Supplement to the Official Journal of the
European Communities, financed by the European Community under the European Devel ­

opment Fund ( EDF ) or the European Communities budget

( week : 7 to 11 November 1995 )

( 95 / C 304 / 07 )

Final date

for submission

of bids

Invitation to

tender No

Number and date

of ' S ' Journal Country Subject

4079 S 212, 7 . 11 . 1995 Niger NE-Niamey : vehicles, motorcycles 6 . 2 . 1996

4066 S 214, 9 . 11 . 1995 Zimbabwe ZW-Harare : vehicles and tractors 2 . 1 . 1996

4079 S 214, 9 . 11 . 1995 Niger NE-Niamey : vehicles, motorcycles

( additional information )

6 . 2 . 1996