PARIS — Israel’s Spacecom Ltd. has presold around 30 percent of the capacity on its Ku- and Ka-band satellite, Amos-3, a year before its launch, with sales to both new customers and those being transferred from the existing Amos-1 spacecraft, which will be retired in 2008.
Omri Arnon, Tel Aviv-based Spacecom’s vice president for business development, said television broadcasters in central and eastern Europe also have signed up for Amos-3, which like its Amos-1 and Amos-2 predecessors will have beams covering the eastern United States, the Middle East and eastern Europe.
Amos-3, under construction by Spacecom shareholder Israel Aircraft Industries (IAI), will be co-located with the two older satellites at 4 degrees west longitude. It will be launched by Sea Launch Co.’s Land Launch vehicle in late 2007 under current plans.
The satellite will have 24 Ku-band transponders and about 2.5 gigahertz of Ka-band capacity attached to both steerable and fixed beams.
Despite the obvious disadvantages of an Israeli satellite operator — its Arab neighbors are unlikely to lease Amos capacity for political reasons — Spacecom has carved out a business that in 2005 generated $35 million in revenue. Arnon said Amos-1 and Amos-2 are about 85 percent full. About 20 percent of its business comes from the Israeli government.
Spacecom’s backlog is $450 million — equivalent to more than 10 years’ annual sales, giving the company an unusually clear view of its future. Its two biggest customers are the YES and Boom satellite-television platforms in Israel. “Video and government use — these are the best places for us to build on demand,” Arnon said. “Some 80 percent of our business is based on video, and numerous governments are looking to connect schools via satellite. Hungary is an example.”
Arnon said revenues are likely to grow substantially in the coming years, one reason why Spacecom and IAI have begun designing the Amos-4 satellite, a much larger spacecraft to be located around 70 degrees east longitude and launched in 2010. The satellite has not been contracted yet, but Arnon said Spacecom and IAI have no doubt that it will proceed.
Arnon declined to disclose the company’s strategy beyond serving its current customer base but said Spacecom is out looking for external growth potential. Several satellite operators, particularly in Asia, have indicated their willingness to leave the business of owning their own satellites to concentrate on direct-to-home television services.
Spacecom could be a buyer of one of these companies, operating as a wholesaler of satellite transponder capacity, Arnon said. He conceded that Spacecom’s current size could be a handicap for some deals, but that the company’s ability to act quickly could work in its favor.
The company conducted a successful stock offering on the Tel Aviv Stock Exchange in March 2005 and about 15 percent of its shares are publicly traded. The remaining equity is evenly divided between IAI; Eurocom Holdings Ltd., owner of YES; communications group Mer Services; and General Satellite Services Co., a group of private investors including Spacecom’s founders.
