RigNet, Inc. operates as a technology company that provides customized data and communications services.
Customers use the company’s private networks to manage information flows and execute mission-critical operations primarily in remote areas where conventional telecommunications infrastructure is either unreliable or unavailable. The company provides its clients what is often the sole means of communications for their remote operations. On top of and vertically integrated into these networks...
RigNet, Inc. operates as a technology company that provides customized data and communications services.
Customers use the company’s private networks to manage information flows and execute mission-critical operations primarily in remote areas where conventional telecommunications infrastructure is either unreliable or unavailable. The company provides its clients what is often the sole means of communications for their remote operations. On top of and vertically integrated into these networks it provides services ranging from fully-managed voice, data, and video to more advanced services, including cybersecurity threat detection and prevention; applications to improve crew welfare, safety or workforce productivity; and a real-time artificial intelligence (AI)-backed data analytics platform to enhance customer decision making and business performance.
The company delivers advanced software and communications infrastructure that allows its customers to realize the business benefits of digital transformation. With ultra-secure solutions spanning global Internet Protocol (IP) connectivity, bandwidth-optimized over-the-top applications, industrial IoT big data enablement, and machine learning analytics, the company supports the evolution of digital enablement, empowering businesses to respond to high priority issues, mitigate the risk of operational disruption, and maximize their overall financial performance.
The company’s primarily focuses on customers in the upstream exploration and production segment of the energy industry, including offshore drilling rigs and production facilities. In recent years, it has increased its service offerings across the energy value chain to provide solutions to midstream and downstream customers where systems integration and Internet-of-Things (IoT) solutions are key elements. In addition, the company has created channel partners around the world, creating opportunities to sell its security, IoT, and machine-learning solutions outside of its traditional energy-focused markets.
Segments
The company operates through Managed Communications Services (MCS); Applications and Internet-of-Things (Apps & IoT); and Systems Integration (SI) segments.
MCS segment
This segment provides remote communications, telephony, and technology services for offshore and onshore drilling rigs and production facilities, support vessels, and other remote sites. In addition, this segment sells communications equipment and associated installation and maintenance services. The company’s services are generally contracted with terms that typically range from one month to five years and are billed as monthly recurring or usage-based fees. The company provides remote communications and collaborative services to approximately 650 customers reaching over 1,100 remote sites located in approximately 50 countries on six continents.
Key aspects of the company’s services include a secure end-to-end global network to ensure network availability, enhanced network cybersecurity and higher quality of service control to optimize latency-sensitive business applications; a multi-tenant network designed to accommodate multiple customer groups residing at a site, including drilling contractors, exploration and production operators and oilfield service providers; a comprehensive bundle of network optimization value-added services, such as wide-area network acceleration, policy-based content filtering and firewall Wi-Fi hotspot access management, to maximize public-private sharing of assets for multiple tenants and customer groups at one site; proactive network monitoring and management through network operations centers that manage network availability and serve as in-bound call centers for troubleshooting, 24 hours per day, 365 days per year; and maintenance and support through geographically deployed engineering and service support teams, as well as warehoused spare equipment inventories.
Global MCS Site Counts
The company reports the number of sites serviced by MCS on a regular basis and defines sites based on four categories, which include offshore drilling rigs, offshore production sites, maritime, and other sites, which includes the U.S. and international onshore drilling and production sites, completion sites, man-camps, remote offices, and supply bases, as well as offshore-related supply bases, shore offices, tender rigs, and platform rigs. As of December 31, 2020, the company provided MCS to a total of 1,142 U.S. and non-U.S. sites. When the company provides services for multiple customers at one location, for example, to the drilling contractor, exploration and production operator, and other service companies, it counts this as one site.
The company procures bandwidth from independent commercial satellite-services operators and terrestrial wireless and landline providers to meet the needs of its customers for end-to-end IP-based communications. This allows the company to provide hybrid network solutions, which improve network up-time by using multiple and diverse sources of bandwidth. The company owns the network infrastructure and communications equipment it installs at remote sites, as well as equipment co-located in third-party teleport facilities and data centers, all of which it procures through various equipment providers.
Apps & IoT segment
This segment provides applications over-the-top of the network layer, including software as a service (SaaS) offerings, such as a real-time machine learning and AI data platform (Intelie Pipes and Intelie LIVE), Cyphre Encryption, Enhanced Cybersecurity Services (ECS), applications for safety and workforce productivity, such as weather monitoring primarily in the North Sea (MetOcean), and certain other value-added services, such as Advanced Video Intelligence (AVI). This segment also includes the private machine-to-machine IoT data networks, including Supervisory Control and Data Acquisition (SCADA) provided primarily for pipelines. It generates revenue through software licenses, subscription fees, equipment sales, customization and commissioning services, and recurring network and usage-based fees.
The company, through this segment, delivers a combination of turn-key network solutions, value-added services that simplify the management of multiple communications needs, and digital accelerators that collect, secure and analyze operational intelligence data. Its strategy in selling Apps & IoT services is to employ both direct and indirect sales channels, enabling it to target customers in industry verticals where it has not established a focused salesforce.
Apps & IoT services delivered over-the-top of the network layer include the Intelie LIVE and Intelie Planning platforms, which provide AI backed real-time predictive analytics and machine learning; SaaS applications to enhance remote operations efficiency, safety or crew welfare, including weather monitoring primarily in the North Sea (MetOcean) and AVI, including video analytics and a Video Management System; a range of ECS monitoring and protection services, including a security operations center, Cyphre encryption, AI-backed intrusion detection, conditional access, and security ratings; and machine-to-machine IoT networks, such as SCADA, broadband global access networks, and custom Long-Range Access.
Intelie soluções em Informática SA (Intelie), the company’s real-time machine learning platform, delivers value to the energy sector and has applications that improve performance and operational safety, enhance well control, and reduce non-productive time. Intelie has recently signed a contract to implement Intelie LIVE to support BP Plc’s Remote Collaboration Center and has also been used in oil production and pipeline monitoring use cases. The increased linkage between IoT solutions and Intelie allows the company to not only provide communications but also to be directly involved in driving valuable business outcomes for its customers.
The company’s IoT network supports over 10,000 different sites, predominantly in the U.S. A key element of its network, devices using the L-band satellite technology, remained stable at over 6,100 L-Band enabled IoT sites as of December 2020, consuming on average 66 gigabytes per month of IoT traffic.
SI segment
This segment provides design and implementation services for customer telecommunications systems. Solutions are delivered based on the customer’s specifications, adhering to international industry standards and best practices. Project services may include consulting, design, engineering, project management, procurement, testing, installation, commissioning, and maintenance. Additionally, this segment provides complete monitoring and maintenance for fire and gas detection systems and programmable logic controller/automation control systems. The company operates as a subcontractor on SI projects, working with other major engineering, procurement, and construction (EPC) companies to deliver the project scope to the end customer.
Strategy
The company’s strategy includes accelerate digital transformation for its customers by leveraging its core MCS business and introducing new, value-added service solutions. The key elements of the company’s strategy are to expand the scale and scope of its services within its primary industry vertical, energy; expand into adjacent industry verticals; and acquire new capabilities and/or scale its business through selective mergers, acquisitions, or in-house development.
Customers
The company’s core customer base includes off-shore and remote land oil and gas drilling contractors, exploration and production operators, and oilfield service companies. As part of its growth strategy, the company seeks to expand to other adjacent markets that share substantially similar technical requirements, such as global enterprise, midstream pipelines, maritime, engineering and construction, disaster recovery services, banking and government verticals.
In 2020, almost all of the company’s revenue was derived from customers with some connection to the oil and gas industry. These included its traditional customers in the Upstream segment (drilling contractors, large integrated and independent oil and gas operating companies, other oilfield service and maritime support companies, etc.), as well as customers in the Midstream segment (pipelines, LNG plants, etc.) and large EPC companies working across the industry value chain.
The company receives a significant portion of its revenue from Royal Dutch Shell Plc, Valaris Plc, Transocean Ltd, Exxon Mobil Corporation, BP Plc, Baker Hughes Company, Halliburton Company, Bechtel Corporation, and Seadrill Ltd.
Regulation
In the United States (U.S.), the company is subject to the regulatory authority of the Federal Communications Commission (FCC). Its U.S. services are provided on a private carrier basis, rather than a common carrier basis, and are therefore subject to lighter regulation under the U.S. Communications Act of 1934, as amended, and the regulations of the FCC.
The company is also subject to the Communications Assistance for Law Enforcement Act and associated FCC regulations that require telecommunications service providers to configure their networks to facilitate electronic surveillance by law enforcement authorities.
The company is also subject to various anti-corruption laws, including the Foreign Corrupt Practices Act that prohibit the offering or giving anything of value to government officials for the purpose of obtaining or retaining business or for gaining an unfair advantage.
Competition
The company’s primary global competitor in MCS is Speedcast International Ltd. Its competitors in Apps & IoT include IBM, Microsoft, Google, Kongsberg Gruppen, and other smaller pure-play providers, as well as large, established oilfield technology providers, such as Schlumberger and Haliburton. Additionally, in the SI space, the company competes primarily with ABB Ltd., Speedcast International Ltd., and other construction contractors.
History
RigNet, Inc. was founded in 2000. The company was incorporated in Delaware in 2004.
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