Inmarsat has ordered a fleet of three advanced satellites from Boeing for about $1 billion to deliver faster broadband service to customers by the end of 2014, a person close to the deal told Reuters.
The major upgrade to Ka-Band satellites will let Inmarsat offer broadband to commercial and government clients at speeds up to 20 times faster and at less cost than its ageing L-Band fleet, which operates at the opposite end of the frequency spectrum.
Britain's Inmarsat will continue to operate its existing network of 11 L-Band satellites, which provide voice and data to shipping, aviation and land-based customers working in war zones and disaster areas.
Broadband has been the fastest growing part of Inmarsat's business in recent years, offsetting a decline in voice traffic.
Analysts at Credit Suisse said demand for Ka-Band capacity was set to grow substantially over the next 10 years from current low levels, and it was a positive move by Inmarsat to implement a Ka-Band strategy sooner rather than later.
The shares closed down 3 percent at 722.5 pence on Wednesday. Shares in Boeing, meanwhile, were 0.8 percent higher at 1626 GMT.
Boeing beat Thales Alenia Space of France to win the order. Thales shares shed 1.4 percent. (Editing by Paul Hoskins and Michael Shields)