Pending Deal Would Pool Europe’s Satcom Demand

Astrium Services and its subsidiary, the London Satellite Exchange, are in final negotiations with the European Defence Agency (EDA) over a contract to establish a central purchasing database designed to permit European defense authorities to pool demand for commercial satellite services, according to European government and industry officials.

The three-year contract’s financial significance — it is valued at about 130,000 euros ($193,000) — is minimal. But it represents the first concrete step made by EDA in trying to get European governments, which now buy commercial satellite capacity individually — usually on the relatively high-priced spot market — to act in a coordinated fashion to save money.

EDA officials estimate that the 27 governments of the European Union spend about 50 million euros ($74.3 million) per year on commercial satellite leases. The agency believes that by pooling demand, these governments could benefit from a more-stable and longer-term supply while at the same time spending less.

Astrium Services was selected as the preferred bidder after a competition that European industry officials said included Telespazio of Italy, Orange of France and Satlynx of Germany, which is owned by General Electric.

Rodolphe Paris, space and radio spectrum project officer at EDA’s capabilities directorate, declined to discuss the status of what EDA calls its European Satcom Procurement Cell (ESPC) contract beyond saying a contract decision was imminent.

In a presentation Nov. 3 during the Global Milsatcom conference in London, Paris said initial studies suggest that European governments could reduce their costs of commercial satellite telecommunications capacity by 30 percent to 50 percent by pooling their demand and letting a centralized purchasing agent handle lease contracts.

Among the biggest users of commercial satellite capacity in Europe are the United Kingdom, Poland, the Netherlands and France.

As is the case with the U.S. military, Europe’s armed forces are ill-equipped to make long-term satellite-lease procurements, in part because they cannot estimate their capacity requirements far enough in advance to benefit from the price discounts of multiyear leases.

EDA officials say that creating a service catalog from which governments could select capacity would permit EDA to aggregate similar demand by region and by frequency and bandwidth requirement.