EchoStar Explains Why Jupiter-2 is Launching on Atlas instead of Ariane

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PARIS — EchoStar Corp. on Aug. 6 said its satellite consumer broadband subscriber base surpassed 1 million in the three months ending June 30, a milestone that likely would have occurred earlier if it had additional satellite capacity in orbit.

The pressure to launch more capacity to capture unmet demand in the most promising regions of the United States, where the company’s satellite beams are filled to capacity, was the chief reason EchoStar moved to launch its EchoStar 19/Jupiter-2 Ka-band satellite aboard an Atlas 5 rocket.

The launch, to occur in late 2016, replaces earlier EchoStar plans to use Europe’s Ariane 5 rocket for the satellite. Evry, France-based Arianespace has said it has no openings for large satellites like EchoStar 19/Jupiter-2 in the second half of 2016.

Given that the satellite will not be ready for a launch before July 2016, Englewood, Colorado-based EchoStar contracted with Lockheed Martin Commercial Launch Services for an Atlas 5, built by United Launch Alliance of Centennial, Colorado.

In an Aug. 6 conference call with investors, EchoStar Chief Executive Michael T. Dugan suggested that EchoStar 19/Jupiter-2’s final launch weight is likely to increase beyond original estimates, which could have made an Ariane 5 launch more difficult.

The Atlas 5 rocket typically launches one satellite at a time, which is sometimes an advantage when compared to the Ariane 5, whose business model relies on placing two satellites at a time into geostationary transfer orbit.

With the Atlas 5’s full power dedicated to a single satellite customer, the rocket is often able to offer geostationary-orbit customers a longer in-orbit satellite life because of a more-favorable drop-off point when the satellite separates from the rocket.

EchoStar had hinted earlier this year that the satellite’s construction schedule might make launcher selection problematic.

EchoStar has a multi-launch agreement in place with Arianespace, an agreement that remains unchanged following the decision to use Atlas 5 for EchoStar 19/Jupiter-2, Arianespace Chief Executive Stephane Israel said.

In an Aug. 6 interview, Israel said Arianepace had been fully engaged with EchoStar as the satellite’s construction schedule became clearer and was neither surprised nor troubled by the Atlas decision.

“We highly value EchoStar as a long-term customer, and we are happy they have found a way to get to orbit when they need to,” Israel said. “Our manifest for the second half of 2016 is full, especially for large satellites like this one. We were proactive with them in this transfer. It is a responsibility of launch-service providers to look for manifest optimization when it’s for the benefit of the customers.”

The Ariane 5 satellite pairing places the heavier satellite in the upper berth, with the lower berth reserved for the smaller of the two spacecraft. The Ariane 5’s performance limits can be tinkered with depending on the requirements of a given launch but generally speaking, a heavier-than-usual larger satellite means Arianespace must find a lighter smaller co-passenger.

EchoStar will be paying more for the Atlas 5 launch than for an Ariane 5, but the additional in-orbit life and above all the confirmed 2016 launch date more than made up for that, EchoStar officials said during the call.

Anders N. Johnson, president of EchoStar Satellite Services, said an Atlas 5 also affords savings on launch-insurance premiums. In recent years, as both Atlas and Ariane 5 have logged flawless records, insurance officials have said there is no difference between the premiums assigned to the two rockets.

Pradman P. Kaul, president of EchoStar’s Hughes Network Systems division, said the company’s consumer broadband business continues to add subscribers despite the fully booked beams by focusing on regions of the United States where there is less demand and tailoring services packages to them.

“We are not cutting back on sales and marketing,” Kaul said during the conference call.

As of June 30, Hughes’ consumer broadband service had 1,014,000 subscribers, up 15,000 from March 31. Once EchoStar 19/Jupiter-2 is in service, he said – about six moths after launch – the business will return to higher growth rates.

Kaul said the Atlas 5 launch means Hughes will be in service with its higher-speed satellite before competitor ViaSat Inc. of Carlsbad, California, deploys its ViaSat-2, which is set for tentatively set for launch in late 2016 aboard a SpaceX Falcon Heavy rocket.

Falcon Heavy has yet to fly and the June 28 failure of a Falcon 9 rocket has pushed the inaugural Falcon Heavy flight into 2016. ViaSat has said it will be on the second or third Falcon Heavy.

EchoStar officials said they had yet to settle on a detailed business plan for their S-band mobile satellite, called EchoStar 21, that is scheduled for launch in 2016. Johnson said the company is focusing on meeting the regulatory requirements of the European Commission and the 28 nations of the European Union, each of which must approve licenses.