PARIS — Qatar’s new satellite fleet operator, Es’hailSat, selected Mitsubishi Electric Co. (Melco) of Japan to build the Es’hail 2 satellite after a competition in which, to the surprise of many, Melco bested its U.S. and European competitors with a price between 10 and 15 percent lower, Es’hailSat Chief Executive Ali Al-Kuwari said.
Al-Kuwari said the bidding competition, which was the first for Es’hailSat — its first satellite is co-owned with Eutelsat of Paris, which managed the procurement — opened his eyes to the rough-and-tumble aspects of the satellite industry, where spreading blatantly false rumors about competitors is a regular feature.
“This I did not appreciate so much,” Al-Kuwari said here Sept. 10 in an interview during the World Satellite Business Week conference organized by Euroconsult. “People were telling us that this or that went wrong with Turksat 4A and that we were making a mistake. I did not expect this.”
Melco, despite its long corporate heritage as a builder of Japanese government satellites, is still a relative newcomer to the global commercial telecommunications satellite market. Its biggest win to date has been the two-satellite contract for Turkish satellite fleet operator Turksat.
The first of these satellites, Turksat 4A, is in orbit and, by all accounts, working fine.
Given Qatar’s wealth, its status as host of the 2022 FIFA World Cup and its relationship with the Al Jazeera television news channel, establishing a relationship with Es’hailSat would appear to be a priority for satellite builders.
The company issued a request for information a year ago and received expressions of interest from multiple builders. But when it came time to submit detailed bids, several manufacturers decided not to compete.
These included Boeing Space and Intelligence Systems of El Segundo, California, which Al-Kuwari said was focused on selling all-electric spacecraft. Es’hailSat was not interested in an all-electric satellite for this procurement.
A Boeing official said the company considered that the size of the satellite being sought by Es’hailSat — 24 Ku-band transponders and 11 Ka-band transponders — was not an easy fit for the Boeing product line without electric propulsion.
Es’hailSat then downselected to three finalists: Space Systems/Loral (SSL) of Palo Alto, California; Thales Alenia Space of France and Italy; and Melco.
In what Al-Kuwari said was a surprise move, SSL and Thales Alenia Space joined forces to make a single final bid. Satellite builders often join forces for specific satellite bids, with one handling the payload and the other the satellite’s skeletal structure, or platform.
SSL has been the most successful commercial satellite builder in the past few years in terms of numbers of satellite wins. Thales Alenia Space, while less successful, is revamping its product line to raise its commercial profile and has booked several orders in the past year.
“Everybody is surprised we selected Melco. Why is that?” Al-Kuwari said. “They presented a very good technical bid, very close in ratings to the others. And their price was substantially lower — 10 or 15 percent lower — which was a surprise for us. It is possible that some manufacturers assume they’ll win when competing with Melco.”
Es’hail 2 is scheduled for launch into the 26 degrees east orbital slot in late 2016 aboard a vehicle that Es’hailSat has yet to select. A contract is expected in October.
The satellite’s Ku-band capacity is part of the 500 megahertz of capacity granted to Es’hailSat by fleet operator Arabsat of Riyadh, Saudi Arabia. The Ka-band capacity is for the Qatari military and will not be commercialized.
Es’hailSat’s capacity on Es’hail 1, Al-Kuwari said, is almost fully booked. The company has been selling capacity at introductory prices as it establishes itself in a highly competitive region, the Middle East, and up to now has limited itself to “a small, but acceptable profit margin. We’re not looking for profitability now.”
To accommodate demand, Es’hailSat has leased additional capacity on the Eutelsat share of the satellite through Eutelsat’s customer, Noorsat of Jordan. “Noorsat has leased eight transponders from Eutelsat and we have leased, from Noorsat, four of these. We have the intention of leasing the other four as well,” Al-Kuwari said.
Es’hail 3, which he said is likely to be needed once telecommunications requirements for the 2022 World Cup are finalized, likely will be ordered in 2016.