EchoStar buys Jupiter-3 “ultra high density satellite” from SSL

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WASHINGTON — Satellite fleet operator EchoStar of Englewood, Colorado, revealed Aug. 9 it had signed a contract with Space Systems Loral for the long-awaited Jupiter-3/EchoStar-24 satellite meant to further propel the company’s broadband internet success in the Americas and compete head to head with ViaSat’s forthcoming ViaSat-3 system.

In a conference call with investors and in statements from EchoStar and SSL, the companies described Jupiter-3 as an “ultra high density satellite,” capable of beaming honed capacity to concentrated areas of interest for connectivity services.  

“After almost a year of hard work, we believe we have come up with an optimum design for an ultra high density satellite, and we’ve awarded a contract to SSL to build this satellite to be called EchoStar-24/Jupiter-3,” Pradman Kaul, president of Hughes Network Systems, said Aug 9. “This new satellite will provide a dramatic increase in capacity in our key markets in the Americas at a very competitive cost per bit.

“It will enable us to offer speeds of 100Mbps per second and higher to the subscriber. The coverage will be optimised to cover where we anticipate demand rather than uniform blanket coverage. All our traditional markets, including consumer, enterprise, aeronautical, cellular backhaul and community Wi-Fi will be served.”

When EchoStar first mentioned Jupiter-3 a year and a half ago in February 2016, the company expected to make an announcement “in the next few months.” Satellite operator ViaSat in Carlsbad, California had at the time just revealed ViaSat-3, a global system of three “high capacity” broadband satellites each advertising at least 1 terabit per second of capacity.

SSL parent company MDA Corp. alluded to the pending signature of a roughly $400 million contract for “our largest satellite to date,” in July, which SSL today announced was Jupiter-3.

In an Aug. 9 statement, SSL said the satellite “will feature an entirely new architecture based on a broad range of technology advances including the miniaturization of electronics, solid state amplifiers, and more efficient antenna designs.”

Jupiter-3 is expected to have a total throughput of 500Gbps and to launch in 2021; ViaSat expects to launch the first ViaSat-3, which will also cover the Americas, in 2020.  

Building Jupiter-2’s Business

EchoStar’s most recent Hughes satellite, the 220Gbps Jupiter-2/EchoStar-19, launched Dec. 18 on an Atlas 5 rocket and entered service in March, giving the company a few months lead over competitor ViaSat. An Ariane 5 launched the 300Gbps ViaSat-2 on June 1. Both EchoStar and ViaSat have been waiting on additional capacity since their existing Jupiter-1 and ViaSat-1 satellites have about as many residential broadband subscribers as they can take. ViaSat said Aug. 8 that ViaSat-2 should enter service during its fiscal fourth quarter 2018, which translates to the first three months of the calendar year 2018.

Kaul said the 120 spot beam Jupiter-2 satellite already hosts more than 200,000 of the company’s 1,085,000 subscribers. The company added 41,000 net subscribers for the three months ended June 30.

ViaSat reported a loss of 34,000 subscribers for the quarter ended June 30, which CEO Mark Dankberg told investors Aug. 8 was due in part to competition from “unlimited mobile LTE plans and the new Hughes Jupiter-2 plans.”

A transition by Dish from working with both EchoStar and ViaSat on a wholesale basis to a sales agent approach also negatively impacted subscriber numbers for both companies.

Kaul estimated that around 18 million households in the U.S. fall into EchoStar’s core market of unserved or underserved locations. He estimated only 10 percent of those households have been tapped into today, and that Hughes has 60 percent of that market.

Hughes is also targeting broadband markets in Canada through customer Xplornet, an internet service provider, in Mexico with media company customer StarGroup, and in Brazil through its Hughes Network Systems do Brasil division. Kaul said Jupiter-2 will start service in Colombia later this year, followed by other Latin American countries.

“We are confident that over the next four years that we are constructing Jupiter-3, that we will not only fill up Jupiter-2, but we will probably end up with many beams on Jupiter-2 being full and having to go into a managed mode like we had to do with Jupiter-1 for a while,” he said.

Hughes Network Systems do Brasil is also using capacity on Eutelsat’s 65 West A satellite, which launched in March 2016, for 15 years. Additionally, EchoStar purchased capacity over Brazil on Telesat’s Telstar-19 Vantage satellite, which is expected to launch in mid-2018 on a SpaceX Falcon 9 rocket.

Additional fleet updates

Michael Dugan, EchoStar’s president and CEO, said EchoStar has regained contact with EchoStar-3, a 20-year old satellite that malfunctioned during a recent maneuver, but still lacks control of the spacecraft.

“We’ve subsequently reestablished communication with the satellite, and are working with the manufacturer to restore sufficient command to move it into a retirement orbit,” he said.

The satellite, which was no longer generating revenue, is currently drifting along the geostationary arc where most telecommunications satellites reside.

EchoStar is sitting on $3.27 billion as of June 30 in cash, cash equivalents and marketable investment securities, most of which the company has not publicly detailed a plan for. Dugan said that the company anticipates around $500 million in capital expenditures for this year, and about the same next year.

Brazil is a potential area for further investment since EchoStar gained rights to Ku-, Ka-, and S-band frequencies there in 2012. In an Aug. 9 filing to the U.S. Securities and Exchange Commission, EchoStar said it met Brazil’s regulatory in-service obligations for Ku-band with EchoStar-23, a broadcast satellite launched in March 2017 by SpaceX, and is “exploring options for the Ka-band and S-band spectrums.”

“We have sought an extension of the S- and Ka-band milestones, which may or may not be granted, and, if granted, may be subject to additional conditions, penalties or other requirements,” the company wrote.

EchoStar has one more satellite, EchoStar-105/SES-11, launching this year on what Spaceflight Now reports will be a pre-flown Falcon 9 rocket. Ordered from European manufacturer Airbus Defence and Space, EchoStar intends to lease the Ku-band payload from SES for 10 years with an option to extend on an annual basis thereafter. The C-, Ku-, and Ka-band satellite is a replacement for SES’s 13-year old AMC-15.