Telenor readies bid as AeroMobile enters administration

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In-flight mobile phone connectivity service provider AeroMobile has been placed into administration as fresh funding is sought for the Arinc/Telenor partnership.

"To allow the business to grow to its full potential, there is a need to secure further funding. We will do all we can to secure a going concern sale for this business, and in the meanwhile, we will continue to trade as normal," says Malcolm Cohen, one of two administrators appointed over AeroMobile in the UK.

Furthermore, say the administrators, the approximate 60 staff at London Gatwick-headquartered AeroMobile will not be affected and "ongoing contracts will be fulfilled as planned".

Formed in 2003 as a joint venture between Arinc and Telenor, AeroMobile's ownership structure has evolved in recent years. Telenor now owns a total 99.88% of AeroMobile, while Arinc retains just .12%.

As administrators seek a buyer for AeroMobile, Telenor has made known its interest in placing a bid for the firm. "Telenor believes in the viability of the company after re-structuring and we have expressed our intent to put in a bid for the company and secure further funding, which means there is at least one investor committed to taking the company forward," says Telenor in a statement.

The Norway-based telecommunications firm also says it has guaranteed ongoing funding during the administration period and that AeroMobile will have money to pay its bills and salaries. The administration period is expected "to be at most a few weeks", says Telenor.

Arinc could not be immediately reached for comment.

It remains to be seen if other bidders will emerge for AeroMobile. Some industry observers believe Panasonic - which brands AeroMobile's hardware as eXPhone - could prove a possible contender, although a spokeswoman for the company says she is not aware of any Panasonic bid activities.

She says Panasonic was aware that AeroMobile was placed into administration and remains committed to working closely with AeroMobile. "We continue to make steady progress on our in-flight mobile phone connectivity solutions (eXPhone), which have been in the market for years. We are gaining market share and new customers due to the solutions' successful track record, and now have an unprecedented number of eXPhone systems onboard aircrafts," she says.

Adds the spokeswoman: "Panasonic continues to monitor the industry environment. At this time, we do not expect any disruptions to our operations as a result of AeroMobile's news."

AeroMobile is in the process of equipping Emirates' fleet with its in-flight mobile connectivity solution. Last week the company told ATI that Boeing is close to making the eXPhone solution line-fit offerable via Inmarsat aeronautical services.

Emirates in a statement says its agreement with AeroMobile is unaffected by the firm's administration.

"We, and our passengers, have been delighted with the development of the AeroMobile service, which is now operating on 65 of our aircraft," says Emirates, adding that it looks forward "to the continued roll out of AeroMobile across our fleet during 2010."