After Amos-5 Loss, Competitors Lure Spacecom Customers with Below-cost Pricing
PARIS — Spacecom Chief Executive David Pollack on Nov. 24 said the likely total loss of his company’s Amos-5 telecommunications satellite has laid bare just how harsh the African satellite communications market has become as competing fleet operators lure desperate Amos-5 customers with below-cost pricing.
In an interview, Pollack said that with more than three days having passed since Amos-5 abruptly stopped communicating, there is little hope of its being returned to service. Tel Aviv, Israel-based Spacecom will be filing a total loss claim to its insurance underwriters.
Amos-5 was insured for a total of $158 million, including $50 million related to the satellite’s propulsion system. A 2013 glitch involving the satellite’s propulsion unit caused insurers to place exclusions on claims based on any similar events in the future.
Pollack said the satellite was undergoing no special maintenance or other interventions from the ground Nov. 21 when its communications — both to and from the ground — went dark. “It came out of a clear blue sky,” he said of the failure. “It had nothing to do with propulsion.”
Since then, manufacturer ISS Reshetnev of Russia has been unable to pinpoint a possible cause, he said. Ground-based telescopes have confirmed that Amos-5 as of Nov. 24 remained in its assigned orbital “box” at 17 degrees east longitude in geostationary orbit 36,000 kilometers over the equator.
One satellite industry official said that if the satellite remains out of the control of ground teams, it likely will begin to move out of its orbital slot and drive along the geostationary arc, becoming the latest in a number of “zombie” satellites that are a problem — but a manageable one — for satellite fleet owners.
Pollack said Spacecom would do everything it can to advise owners of neighboring satellites of the Amos-5 situation so that, if necessary, they can move their satellites to a corner of their orbital boxes to allow Amos-5 to pass without incident.
He said Spacecom had more than 100 relatively small television broadcasters and other customers, mostly African, loaded into Amos-5. Since Nov. 21, these companies are now interested in nothing more than restoring their broadcasts and calming what is likely to be an angry customer base.
Pollack said Spacecom has talked individually with every Amos-5 customer and offered a choice: Stick with us and we will make bulk purchases of replacement capacity on competitors’ satellites, or strike out on your own.
In principle, Spacecom should be able to negotiate per-megahertz prices that are lower than what its customers could secure on their own because of volume discounts. But there are complications, he said.
“I realize now just how good Amos-5 was because when we look at some of the other satellites in the area we would need to lease 54 megahertz to get the same quality of service we were providing on 36 megahertz on Amos-5,” Pollack said.
“And the fact is that some customers are choosing to leave because they are being offered prices that are better than what we could offer. These operators are contracting at prices that are below cost. They will never recover from this and they will ruin the market. I will not name names but we all know who they are.”