PARIS — Satellite Earth imagery provider DigitalGlobe on Oct. 31 said its U.S. government business is showing almost no effects of the budget issues that have frozen or reduced spending in most federal agencies, and that its commercial business was growing as well.

Longmont, Colo.-based DigitalGlobe, which acquired competitor GeoEye in January and is now a near-monopoly provider of imagery to U.S. government agencies, also reiterated its call for a relaxation of regulations that limit the sharpness of images it can provide on the open market.

The current limit on ground sampling distance is 50 centimeters, a measure that corresponds to the size of the objects a satellite can detect from orbit. Sharper imagery, which DigitalGlobe satellites currently are able to provide, is limited to the U.S. government or customers specifically approved by U.S. authorities.

DigitalGlobe — and its competitors in France, whose government has adopted the same general policy — has formally requested that the company be able to compete with aerial-imagery providers worldwide by providing sub-50-centimeter imagery commercially.

“We believe resolution restrictions are outdated and unreasonably constrain the ability of U.S. industry to compete,” DigitalGlobe Chief Executive Jeffrey R. Tarr said in a conference call with investors. “[R]elieving those restrictions will create more opportunities for innovation and value creation for our government customers and our commercial customers.”

DigitalGlobe’s current revenue mix is about 60 percent U.S. government and 40 percent commercial, but the company has said both are growing at double-digital rates and that, over time, the mix should stabilize at around 50-50.

Tarr said the global aerial-imagery market is valued at about $800 million in annual revenue that is captured by some 200 companies in 90 nations.

The principal difference between a satellite imagery company and a provider of aerial images is that aircraft are restricted to national airspace unless they receive authorizations to overfly foreign territory. A satellite’s path is global, with no overflight permission needed.

DigitalGlobe’s total revenue for the three months ending Sept. 30 was $164.8 million. That figure includes just $31 million from the former GeoEye, whose revenue dropped by 65 percent during the period as its U.S. government business tailed off. 

The decision by the U.S. National Geospatial-Intelligence Agency (NGA) to reduce its spending by curtailing its contract with GeoEye — while continuing its business with DigitalGlobe — was the principal driver of the merger of the two companies.

Tarr said GeoEye’s Analytics business, which draws on eclectic sources of information, in addition to satellite data, to create predictive models for customers, has suffered somewhat given the U.S. government’s across-the-board budget cuts, known as sequestration. But it is still growing, he said.

Nevertheless, DigitalGlobe’s U.S. government revenue rose 53 percent, to $100.8 million, when GeoEye’s revenue is included, and up 23 percent excluding GeoEye.

The biggest driver of the government revenue increase was a piece of DigitalGlobe’s 10-year NGA contract, called EnhancedView, that covers value-added services beyond the basic provision of imagery that is the larger share of the contract.

DigitalGlobe Chief Financial Officer Yancey L. Spruill said the value-added services piece of the EnhancedView contract was up more than threefold compared with a year ago, to $37.6 million in the three months ending Sept. 30. The main component of this increase was an expanded contract for services called Enhanced Geoint Delivery. That growth rate would appear to be unsustainable within the EnhancedView contract, which is a series of one-year contracts that started in mid-2010 and run for 10 years. The value-added segment of this contract totals around $500 million.

Spruill said it is clear that “there is more demand for value-added services than there is available budget,” and that it will be up to the customer to determine how demand evolves over time.

DigitalGlobe remains on schedule to launch its WorldView 3 satellite in mid-2014. The GeoEye-2 satellite, also under construction and one of the assets that DigitalGlobe acquired with the GeoEye purchase, is also nearing completion.

DigitalGlobe said it is spending $10 million more than planned to make several modifications to GeoEye-2 before the satellite is placed into storage. It will be launched when the market requires it or when one of the other DigitalGlobe satellites is retired.

The company currently owns five in-orbit spacecraft and has integrated operations of the legacy GeoEye spacecraft with the others at a single control center in Longmont.

Tarr said the goal is to move customers to ordering images not by satellite so much as by sensor characteristic, allowing DigitalGlobe to plan orders based on a constellation of assets rather than on a per-satellite basis.

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Peter B. de Selding was the Paris Bureau Chief for SpaceNews.