World Satellite Business Week | Two O3b Satellites Taken Out of Service as a Precaution

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PARIS — Two of the four first-launch satellites of startup broadband service provider O3b Networks have been shut down to preserve their capacity in the event the other two fail, industry officials said.

The decision to switch off the two satellites will increase the likelihood that O3b, which now has eight satellites in orbit, will be able to maintain the necessary six spacecraft in operation while waiting for its next four satellites to launch in early 2015, officials said.

“This was a conscious decision to mitigate risk,” one industry official said. “The constellation works fine with six satellites. Because there is no way of saying when the problem on the first four will cause complete power loss, it’s prudent to take two of them out of service. They can be switched back on at any time.”

Based in Britain’s Channel Islands, with satellite fleet operator SES of Luxembourg its major shareholder and likely future owner, O3b operates a constellation of 700-kilogram satellites using an unusual equatorial orbit some 8,000 kilometers in altitude.

The low altitude allows the satellites to deliver Ka-band broadband to users with a much lower latency, or the time needed for a signal to travel between the satellites and their users.

The O3b satellites, designed to operate for 10 years, are built by Thales Alenia Space of France and Italy. The first batch, launched in July 2013, has a defective component — a combination centralized power supply and frequency generator unit — that is likely to cause them to cease functioning well before their scheduled 10-year service life.

O3b has filed insurance claims totaling some $318 million and is likely to receive all or most of the claim given the consensus among insurers that the defect is as serious as O3b has described.

O3b’s second four satellites, like the first launched on a Europeanized Russian Soyuz rocket, were placed into orbit July 10. These satellites’ launch was delayed to correct the power-component defect and industry officials said they are operating as designed.

O3b had a long-standing option with launch service provider Arianespace for a third Europeanized Soyuz launch, and this option was converted into a firm contract here Sept. 9 during the World Satellite Business Week conference organized by Euroconsult. The Europeanized Soyuz vehicle has been grounded following a late-August anomaly involving its Fregat upper stage, also used by Russian customers. A board of inquiry into the problem, which left two European navigation satellites in a useless orbit, is expected to deliver its conclusions by late September.

Arianespace Chief Executive Stephane Israel said the company has committed to launching the next four O3b satellites “as soon as possible” in 2015. The next launch of the European Soyuz is of two additional navigation satellites, tentatively scheduled for December. O3b has booked the flight after that, likely in the first three months of 2015.

Addressing the conference, O3b Chief Executive Steve Collar said the newly operational system is providing better-than-expected service to its initial customers, many in geographic regions of the world that are otherwise poorly served by broadband connections, even by satellite.

The O3b satellites’ orbit is designed to focus coverage on a large belt between 45 degrees north and 45 degrees south latitude. Its customers include telecommunications operators and, on the enterprise side, energy exploration and production companies and maritime fleets.

Collar said the early experience has led two of the company’s eight inaugural customers to double the size of their initial contracts. “Demand elasticity really does work,” Collar said, referring to customers that quickly increase the amount of bandwidth they want once they see what the satellites can do.

“Another lesson we have learned: Fiber is really not that great,” Collar said. “Fiber companies are often not that responsive to customers and in some cases we’re being chosen ahead of fiber. So to the question — Can satellites go up against fiber and win? — the answer is yes.”

Collar said he is optimistic that O3b’s shareholders, when presented with the choice of how to use the expected insurance windfall, will elect to reinvest in the business rather than pocket the cash.

The O3b network is designed to accommodate up to 120 satellites. The more satellites, the less movement is needed by users’ tracking antennas, which follow a given satellite and then shift to the following satellite as it passes overhead.

 

Follow Peter on Twitter: @pbdes


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