PARIS — Satellite fleet operator Eutelsat on July 31 promised investors that it would reduce its spending on new satellites and launch vehicles in the next three years by ratcheting up pressure on suppliers.

In a conference call, Eutelsat officials said capital investment for each of the coming three years would be capped at 500 million euros ($675 million) against 600 million euros on average previously.

The Paris-based company, which is the world’s third-largest fixed satellite services operator when measured by revenue, specifically said it would adopt all-electric satellites as a way of cutting per-transponder launch costs and would use Space Exploration Technologies Corp. to spur competition with Europe’s Arianespace launch service provider in pursuit of lower costs.

Evry, France-based Arianespace, for which Eutelsat has been the biggest commercial customer over the years, has already promised to reduce the cost of launching the smaller satellites that fit in the lower position of its heavy-lift Ariane 5 rocket, which typically launches two commercial satellites at a time.

Lighter satellites have not been what Eutelsat has been buying in recent years, but the advent of electric-propulsion satellites has changed things. These satellites weigh hundreds of kilograms less than satellites with chemical propulsion systems, with no loss of power or payload capability, and open up SpaceX’s Falcon 9 rocket and the Ariane 5 vehicle’s lower position to satellites that otherwise would be too heavy.

Eutelsat announced July 31 that it had ordered its first all-electric satellite outside of the two being built by Boeing that Eutelsat inherited via its purchase of Satmex of Mexico.

Airbus Defence and Space, which recently won an all-electric-satellite order from Eutelsat rival SES of Luxembourg, will build the Eutelsat 172B spacecraft for Asia-Pacific coverage, with a launch planned aboard an Ariane 5 in the first half of 2017.

The satellite’s high-throughput capacity using 11 Ku-band spot beams — 1.8 gigabits of throughput — has already been purchased by Panasonic Avionics for that company’s satellite-based global aeronautical broadband service.

In addition to the high-throughput spot beams, 172B will carry 36 regular Ku-band transponders and 14 C-band transponders for commercial and government use. Eutelsat hopes the satellite will appeal to the U.S. Defense Department, which is a regular Eutelsat customer and has complained of a lack of suitable commercial satellite capacity over Asia.

Located at 172 degrees east, Eutelsat 172B will provide 13 kilowatts of power to its payload at the end of its 15-year service life. With conventional propellant, a satellite of this capability would weigh more than 6,000 kilograms at launch, according to Eutelsat. Using plasma-electric propulsion, it will weigh 3,500 kilograms and easily fit in the Ariane 5’s lower berth.

Eutelsat Chief Executive Michel de Rosen said during the conference call that Eutelsat will be squeezing its suppliers to lower the cost of getting a transponder into service. He mentioned Hawthorne, California-based SpaceX more than once, suggesting that Eutelsat would be playing SpaceX off of Arianespace for its coming satellite launch orders.

Eutelsat in the past has promoted itself as a loyal customer for Europe’s rocket and satellite sector, portraying its buying practices as responding to a near-patriotic duty as much as a cost-benefit analysis.

De Rosen said Eutelsat has been active among European satellite operators in pushing European industry and governments to boost their competitiveness.

Eutelsat’s decision to cap its capital spending at 500 million euros in the next three years will not be offset by other types expenditures on satellite leases or corporate acquisitions, de Rosen said. “Don’t think we are hiding capex in joint ventures or anywhere else,” he said, adding that the company is determined to bring down its post-Satmex-acquisition debt to retain an investment-grade rating.

But he also said Eutelsat has not abandoned its goal of purchasing control of Spanish satellite fleet operator Hispasat. An earlier Eutelsat effort was rebuffed by the Spanish government, which preferred Spain’s Abertis company, a provider of roadway and other infrastructure.


Eutelsat retains a 34 percent equity stake in Hispasat, and de Rosen said the company will retain that investment against the day when Abertis decides to sell Hispasat to concentrate on its core infrastructure business.

Eutelsat and Hispasat, whose fleets were once complementary, now compete directly in the Latin American market.

Eutelsat also said its Ka-Sat Ka-band consumer broadband satellite, after a slow start, increased its subscriber count by 24 percent, to 154,000, in the six months ending June 30.

While Eutelsat is providing Ku-band high-throughput capacity in Asia, its Ka-Sat footprint in Europe, combined with the coverage of current and future satellites owned by Eutelsat’s broadband-terminal provider ViaSat Inc. of Carlsbad, California, will be used to provide aeronautical broadband in the North Atlantic corridor.

Eutelsat said its 115 West B satellite, formerly named Satmex 7, is scheduled for launch on a SpaceX rocket in the first quarter of 2015 — a date that has not changed even though SpaceX has fallen behind in its 2014 launch schedule.

Eutelsat 9B, to be launched into the company’s highly successful 7/8 degrees west orbital slot covering the Middle East and Africa, has slipped by three months, to the second quarter of 2015, because of the Russian Proton rocket’s delays following a May failure.

Peter B. de Selding was the Paris bureau chief for SpaceNews.