PARIS — Startup satellite operator NewSat of Australia announced Dec. 9 it has selected Europe’s Arianespace consortium to launch NewSat’s Jabiru-1 Ka-band broadband satellite, to be built by Lockheed Martin, in late 2014 for coverage over the Middle East and South Asia.
Melbourne-based NewSat said the agreements — the word “contract” is not used in the statement — with Evry, France-based Arianespace and with Sunnyvale, Calif.-based Lockheed Martin Space Systems assume the contractors will be successful in securing low-interest financing from their respective export-credit agencies.
NewSat said Lockheed Martin will be helping secure U.S. Export-Import Bank financing, while Arianespace will assist with bank financing backed by France’s Coface. NewSat said it expects the project will be financed 75-80 percent by the export-credit agency loans, and 20-25 percent by equity.
NewSat, which is listed on the Australian Stock Exchange, told investors that the Lockheed Martin agreement is conditioned on Newsat’s receipt of full financing by June 30, 2012. Even so, NewSat said, “construction … will commence immediately” on Jabiru-1.
The company told investors during a Nov. 30 presentation that it had secured $279 million in binding contract bookings for Jabiru-1, with nonbinding agreements for additional capacity that would generate revenue of more than $50 million a year. The satellite is tentatively designed to produce more than 7 gigahertz of Ka-band output, a figure that NewSat said could change in the coming months as the satellite’s design and construction progress.
TrustComm Inc. of Houston has booked $105 million in Jabiru-1 capacity for government and commercial customers in the Middle East, NewSat said. The commitment is $28 million in capacity for the satellite’s first year in orbit, with the remaining payments to cover capacity delivered in the second and third year of the satellite’s service life.
In the biggest single contract NewSat has announced so far, Pakistani telecommunications provider 3a Technology of Karachi booked $134 million in Jabiru-1 capacity for 10 years.
NewSat operates two teleports in Australia. For the fiscal year ending June 30, 2011, the company reported revenue of 28.8 million Australian dollars ($30.5 million) and operating cash flow of 900,000 Australian dollars.
NewSat has been trying to stitch together the necessarily financial and regulatory pieces for its Jabiru-1 satellite for several years. The company announced a breakthrough in February when it said it had purchased rights to seven geostationary orbital slots from AP Kypros Satellites Ltd. of Cyprus.
Kypros, established in 2006, said it has secured rights from the Cypriot government to nine orbital slots. NewSat said it has obtained exclusive use of one of those slots, 50 percent of the frequencies available at two other orbital positions and options at four others.
NewSat told investors it agreed to make five cash installments and a final payment in NewSat shares to Kypros in exchange for the orbital positions. NewSat said the cash payment to Kypros “is well within the means of the company and can be financed with available cash and reserves.”
Kypros founder and Chief Executive Angelos Pieri did not immediately respond to requests for comment on whether the NewSat payments have been made and on the state of frequency coordination at the NewSat orbital positions.
Access to orbital positions and broadcast frequencies is coordinated through the International Telecommunication Union (ITU), a Geneva-based United Nations affiliate. Reservations placed in the ITU’s master register of satellite networks are generally on a first-come, first-served basis.
Once a satellite network has registered with the ITU, it must build and launch its satellite within a certain period of time or risk losing its rights. Kypros has said it must place satellites at its Cyprus-registered slots within seven years of registering with the ITU. Some of the slots were registered in 2008, others in 2010.
A NewSat investor presentation identified Jabiru orbital slots at 90 degrees east and 54 degrees east, among other locations.
NewSat has said it plans a satellite dedicated to Australian broadband service to government and corporate customers. The company has sought to persuade investors that Australia’s NBN Co., which is under government mandate to provide broadband to all Australians and has announced plans to launch Ka-band satellite capacity, is no threat to NewSat’s business plan.
The NBN project, NewSat said, is focused on consumers and small businesses, while Jabiru-1 in Australia will be targeting government and large corporate customers.
