Briefs

by












  Space News Business

Briefs

posted: 18 September 2006
03:35 pm ET


New Skies Chief Tapped For Top Job at Telesat


SES New Skies Chief Executive Dan Goldberg has been named president of Telesat Canada, replacing the retiring Larry Boisvert on the eve of what is expected to be an initial stock offering for as much as 49 percent of the equity in the Canadian satellite-fleet operator.

Goldberg has been chief executive of New Skies, a Netherlands -based satellite-fleet operator, for about five years and led the company through an initial stock offering and subsequent purchase by several private-equity companies prior to its purchase by SES Global of Luxembourg earlier this year for $1.1 billion.

SES New Skies Chief Financial Officer Andrew Browne will serve as the company’s interim chief executive until a replacement for Goldberg is named, SES Global announced Sept. 11. Boisvert, who has been Telesat chief executive since 1993, will remain a senior advisor on loan to BCE Inc. for “the upcoming months,” Telesat’s owner, BCE Inc., announced in a statement issued Sept. 11.


Japan Launches Spysat; Readies Radar Satellite

Following the successful launch of its third reconnaissance satellite, Japan is turning its attention to plans for the launch of a radar satellite with a ground resolution of 1 to 3 meters in January or February and the launch in 2009 of an IGS equipped with an advanced optical sensor that has a resolution of about 50 centimeters.

The Information Gathering Satellite (IGS) K2 was successfully launched Sept. 11 by an H-2A rocket from the Tanegashima Space Center. Flying in a 400-600 kilometer orbit, IGS-K2 is a medium-sized satellite with an optical sensor with 1 meter resolution.

FCC Chair Rebuffs
Merger Ideas for Satellite TV, Radio

U.S. Federal Communications Commission Chairman Kevin Martin Sept. 14 threw cold water on the recent talk about a possible revival of the proposed merger of U.S. satellite-television providers DirecTV and EchoStar. Martin said the U.S. video landscape has not changed so much that the FCC would reconsider its 2002 rejection of their previous merger proposal.

“[W]hile there has been a lot of talk of additional video entrants in terms of the telephone companies, for example, coming in and providing competition on the video side … it is not widespread yet,” Martin said about an EchoStar-DirecTV merger in a conference call organized by UBS.

Martin said the same reasoning might also apply to any attempted merger between satellite-radio companies XM and Sirius.

While local radio competition exists in many places, the FCC may still limit its analysis to the satellite-radio industry only and view an XM-Sirius merger as the creation of a monopoly, Martin said.

GeoEye Shares Begin Trading on Nasdaq

Shares of imaging satellite operator GeoEye of Dulles, Va., began trading on the Nasdaq stock exchange Sept. 14. The company, which previously traded on the Over The Counter stock exchange, is listed as “GeoY” on Nasdaq .

GeoEye Chief Executive Matt O’Connell said Sept. 14 that the listing on Nasdaq will give the company more options as it considers its opportunities for growth.

Chile Mulls Space Agency,
Earth Observing Satellite

A Chilean government advisory commission and the nation’s defense minister are proposing to Chilean President Michelle Bachelet the creation of a Chilean Space Agency and the procurement of an Earth observation satellite through an international bid solicitation in 2007, the Chilean Defense Ministry announced Sept. 13.

Chilean defense authorities already have contacted 26 prospective bidders, according to the advisory commission’s president, Raul Vergara, Chile’s undersecretary for aviation. In addition to a national Earth observation satellite system, the commission proposes that Chile begin the longer-term process of developing space expertise that would be centered in its own space agency. Defense Minister Vivianne Blanlot is expected to forward the proposals to Bachelet.

THAAD Test Canceled Due To Target Problems

The U.S. Missile Defense Agency (MDA) canceled a planned intercept test with the Terminal High Altitude Area Defense (THAAD) system Sept. 13 due to problems with the target missile. Range safety officials at White Sands Missile Range in New Mexico were forced to destroy the Hera target missile roughly two minutes after it took off after detecting an anomaly with the rocket.

Boeing, Lockheed Awarded Shuttle Contract Extensions

NASA said Sept. 14 that it was awarding contract extensions to Lockheed Martin and Boeing for mission operations support work and payload processing services respectively. Lockheed Martin Space Operations in Houston was awarded a $448.8 million extension for space shuttle and international space station mission operations support work.

A three-year extension worth $278.5 million went to Titusville, Fla.-based Boeing Space Operations Company to extend its Checkout, Assembly and Payload Processing Services Contract through September 2009.

Boeing Satellite Systems Cites Profitability Run

Boeing’s commercial satellite division has reported six consecutive quarters of profitability and is on schedule and budget with the current satellites it is producing, Boeing Satellite Systems International (BSSI) President Stephen T. O’Neill said.

O’Neill and BSSI Chief Executive Howard E. Chambers said Boeing management continues to believe that being in the commercial satellite manufacturing arena benefits the company’s larger and more profitable military satellite business .

O’Neill said the digital signal processor and other technologies Boeing intends to offer under the U.S. Defense Department’s future Transformational Satellite, or T-Sat, telecommunications program will be derived from BSSI’s work on the commercial Spaceway broadband satellites for DirecTV and Hughes Network Systems. Boeing is competing against a Lockheed Martin-Northrop Grumman team for the T-Sat contract.

Chambers said one of his principal tasks since assuming his job — he is also general manager of Boeing Space and Intelligence Systems — in late 2005 has been “to calm things down” after Boeing lost portions of at least one large military satellite contract, the Future Imagery Architecture system, following performance issues. “I was put here to fix those problems,” Chambers said.

Nilesat
Likely To Order Satellite by Year’s End

Nilesat of Egypt, faced with heavy demand from regional television broadcasters, has issued a request for proposals from satellite manufacturers for a Nilesat 201 satellite to be equipped with 24 Ku-band transponders, each with 130 watts of power, according to Nilesat’s head of engineering, Salah Hamza. A contractor is likely to be chosen by the end of the year.

Nilesat operates the Nilesat 101 and 102 satellites launched in 1998 and 2000, respectively, which are expected to continue operating until 2011 and 2013. Nilesat recently leased Eutelsat‘s Hot Bird 4 spacecraft, which has been moved to Nilesat’s 7 degrees west longitude slot and renamed Nilesat 103. The satellite has about five years of commercial service remaining, Hamza said.

But the addition of the Eutelsat spacecraft is not enough to meet the continued growth in demand from regional television broadcasters. With just 55 channels devoted to this business in 1998, Nilesat now counts 324 channels, a figure Hamza said will grow to 344 by the end of this year.

Nilesat expects to report revenues of about $75 million in 2006, Hamza said.

SES Global Reducing In-Orbit Insurance

SES Global is reducing its in-orbit satellite insurance coverage in response to what the world’s second-largest commercial satellite-fleet operator believes is the insurance market’s inability to reward companies that invest in satellite reliability.

SES Global Chief Financial Officer Mark Rigolle said the company is raising the amount it self-insures, and thus reducing the amount of in-orbit insurance it purchases . Up to now SES has insured the book value of its fleet, now at 35 satellites, but has self-insured each satellite for 20 percent of its value, with a cap of 30 million euros ($38 million) per satellite.

Henceforth, SES will renew the annual coverage but will self-insure each satellite for 35 percent of its book value, with the ceiling raised to 50 million euros per satellite.

Self-insurance refers to the risk assumed by the satellite operator, as opposed to underwriters. The practice has become more prevalent in recent years because large fleet operators like SES Global increasingly have the ability to create in-orbit spare capacity in the event of failure.

Rigolle said that in 30 years of operations, SES Global has filed just three insurance claims. The biggest followed the launch failure that destroyed its Astra 1K satellite. The other two — for the Astra 1A’s partial loss of transponder capacity, and a battery anomaly aboard the Astra 1G satellite — were for relatively modest sums. The next step for SES Global could be to set aside reserves on its balance sheet for the entire book value of its fleet.

Speaking to space insurance underwriters, Rigolle warned: “The risk here is that one player with 35 satellites soon won’t be in the [in-orbit insurance] market. We don’t think that’s good for the market as a whol e.”

Unnamed Customer Books Capacity on Avanti Satellite

Avanti Screenmedia of Britain has sold the equivalent of three Ka-band transponders aboard its planned Hylas satellite, now under construction, to an unidentified customer who paid 5 million British pounds ($9.3 million) up front with the promise of another 20 million pounds later, according to David Williams, Avanti’s chief executive.

Williams said the lease is for the entire 15-year life of the satellite, which is scheduled for launch in 2008. The spacecraft is being built by EADS Astrium of Europe and Antrix, the commercial arm of the Indian Space Research Organisation.

The Hylas satellite, partly financed by the British government and the European Space Agency, as well as EADS Astrium and Avanti , will carry eight Ka-band spot beams for broadband coverage over several European nations. It also includes four Ku-band transponders focused on Western Europe.

Hylas also will test an EADS Astrium payload that gives the operator broad flexibility in determining coverage areas and how much of the satellite’s on-board power is devoted to a given region.

Williams said that in addition to providing two-way broadband links in Europe, Avanti ultimately might enter the satellite-television market once high-definition TV arrives in full force in Europe — a development that is expected to cause a spike in demand for satellite capacity, a corresponding rise in transponder-lease prices and an eventual market opening for the Hylas spacecraft.

“We can enter the DTH [direct-to-home television] market in the United Kingdom but it is not crucial to our business plan,” Williams said.

Williams declined to identify Avanti’s initial Ka-band customer. Frederic-Pierre Isoz, a spokesman for EADS Space, which includes EADS Astrium and defense-telecommunications provider EADS Space Services, said Sept. 8 that EADS Space Services is not the initial Hylas customer.

One reason there are no current plans for the Hylas satellite to have a Ka-band beam over France is that French government authorities had planned their own Ka-band satellite for civil and military uses. That project, called Agora, has been scrapped. More recently, the French and Italian defense ministries have been discussing a joint Ka-band satellite called Athena-Fidus, but no decision on its development has been made.

RSCC Executive Details Fleet Expansion Plans

The Russian Satellite Communications Co. (RSCC) expects to increase by 60 percent the number of operational transponders it offers by 2015, to 350 aboard 15 satellites , RSCC Chief Executive Yuri Izmailov said.

RSCC currently has 11 satellites in orbit, with a total of 220 operational transponders. Two-thirds of the capacity is for Russia-based customers, with the remaining one-third accounted for by satellite operators in Europe, Africa and the Middle East.

RSCC’s next two satellites, the Express-AM33 and Express-AM44 are under construction at manufacturer NPO-PM of Russia, with the electronics payloads being built by Alcatel Alenia Space of France .

The two satellites are scheduled to be launched starting in late 2007. They carry C-, Ku- and L-band transponders for digital television and corporate VSAT networks in Russia and Asia.

Izmailov said the current fleet is 70 percent booked , with the new Express-AM models nearly 100 percent booked as demand increases for Ku-band capacity for regional television networks and corporate communications.

Telenor Undecided on Thor 3R Business Plan

Norway’s Telenor Satellite Broadcasting remains undecided about whether its next satellite, tentatively called Thor 3R, will be devoted to offering triple-play service to consumers, conventional direct-broadcast television only or be designed to expand the company’s Middle Eastern business, Telenor Chief Executive Cato Halsaa said.

Telenor operates two Thor satellites and has a replacement for one of them on order with Orbital Sciences Corp. and scheduled for launch in late 2007. The company has decided to replace the second satellite, Thor 3, at 1 degree west longitude but it is not clear what the new spacecraft’s business plan will be, Halsaa said. Thor 3’s service life is expected to end in 2010.

Telenor also co-owns, with Intelsat of Washington, the Intelsat 10-02 satellite, which is co-located with the two Thor spacecraft at the 1 degree west location.

Halsaa said a decision on which market will be the top priority for Thor 3R will be decided this year, with a request for bids to be sent to manufacturers late this year or early in 2007, and a contract expected by June 2007.

SES, Eutelsat Pause at
12-Meter Antenna Cost

Adding a 12-meter-diameter S-band antenna and associated payload and power adjustments to a telecommunications satellite — considered a key technology for the next wave of mobile broadband services — would cost upwards of $100 million. The cost is one reason why SES Global of Luxembourg and Eutelsat of Paris are both hesitating, according to industry officials.

Both companies hope to decide by the end of this year.

SES Global is weighing whether to add an S-band capacity to its Astra 3B satellite, to be contracted by the end of the year. Eutelsat is considering a similar investment for its W2A satellite, recently contracted with Alcatel Alenia Space.

Both satellite-fleet operators want to be ahead of the demand for hybrid satellite-terrestrial services broadcasting television or providing two-way broadband through mobile devices.

Their respective home governments, Luxembourg and France, have filed several S-band applications with global frequency and orbital-slot regulators. ICO of London and the United States also is attempting to persuade regulators that its medium-Earth-orbit satellite, launched as part of a now-abandoned constellation, should enable ICO to preserve its S-band reservations.

Before a satellite commitment is made, SES Global and Eutelsat want a better idea of how many companies will be fighting for the S-band spectrum available over Europe — 30 megahertz for uplink and 30 megahertz for downlink.

Eutelsat Deputy Chief Executive Jean-Paul Brillaud said sharing the spectrum among three competitors may be feasible, but slicing it any thinner probably would not be worth the effort.

None of the S-band contenders in Europe has announced a partnership with television or cellular network operators, who would be expected to share the considerable investment in the terrestrial repeaters needed to work with the satellites.

Chinese May Rebound In Commercial Market

China’s Long March rockets one day will be permitted wider access to the global commercial launch market, with the effects of its low-cost production mitigated by quotas or other restrictions negotiated by Western governments, International Launch Services (ILS) President Mark J. Albrecht predicted while participating in a Sept. 5 panel discussion at Euroconsult’s World Summit for Satellite Financing.

China for the past several years has been prohibited from launching satellites with U.S. made components, a restriction that has nearly had the effect of a worldwide commercial ban. As China’s relations with the United States and Europe improve, the country’s rockets will return to active participation in the market, Albrecht said. When that happens, p rices will drop short-term, then rise as the market adjusts and China’s own costs rise, Albrecht said.

“Will it happen? Of course. When? Don’t know,” Albrecht said. “But the market will continue to roll forward in a quasi-equilibrium.”

ILS, which is partnered with Russian organizations on commercial sales of Russia’s venerable Proton rocket, recently has encountered price increases from its Russian suppliers.

Rockets from India, another new competitor in the global, commercial launch services market appear to be on the verge of winning U.S. government approval to bid on commercial business, according to industry sources. NASA, for example, has agreed to provide components for an Indian lunar-orbiting satellite to be launched on an Indian vehicle.

But the situation remains confusing. The manufacturer of a n Italian-built satellite, called Agile, which is set for launch by India this year was obliged to remove U.S.-built hardware and replace it with European hardware to secure the export license approval required to launch the satellite from India.

The U.S. government refusal to grant India permission to launch U.S. satellites followed India’s nuclear-weapon test. Balakrishnan Vasudevan, the Indian Space Research Organis ation’s technical liaison officer at the Indian embassy in Paris, said Missile Technology Control Regime issues continue to hobble India’s commercial launch plans.

“Relations with the U.S. are improving, and we hope that in the near future these issues will be settled,” Vasudevan said.

Sat Operators Report Strong Gov’t Demand

The world’s top satellite-fleet operators report continuing strong demand for their services on the part of government agencies, both military and civil.

The new Intelsat, including the business of former rival PanAmSat, which Intelsat officially absorbed July 3, generates just under 15 percent of its revenues from direct or indirect government sales, Intelsat Chief Executive Dave McGlade said. The U.S. government is the main customer, but Intelsat recently booked a long-term order on behalf of the German Defense Ministry as well.

SES Global as a group reports that 10 percent of its revenues is from government customers, SES Chief Executive Romain Bausch said. SES New Skies’ business is 33 percent from government leases, while SES Americom’s business is 15 percent government-based, much of it through its Americom Government Services unit.

In Europe, SES Astra has no substantial government business. But its purchase of ND Satcom in Germany — a maker of satellite ground infrastructure whose revenues are 70 percent from government customers — soon will change that, Bausch said. The same German military contract that Intelsat has a piece of will provide ND Satcom with 180 million euros ($230 million) of business over 10 years, Bausch said.

Mobile satellite services operator Inmarsat counts on government customers for about 40 percent of its revenues, Inmarsat Chief Executive Andrew Sukawaty said. This includes international aid agencies and embassies as well as defense forces.

Terrestar Eyes Europe As Next New Market

TerreStar Networks, with two $187 million satellites under construction at Space Systems/Loral and plans to begin providing service in North America in 2008, is looking to Europe as its next market, TerreStar President Robert H. Brumley said.

Brumley said TerreStar has begun the long-term lobbying at the European Commission in Brussels that will be needed to set the regulatory framework for the introduction of S-band services in Europe.

TerreStar believes the business case for two-way broadband communications to mobile devices in the United States is valid in Europe as well, but that the regulators “have to make up their minds on what they want to do” with the available spectrum.

“The formula I use from what happened in the United States is 10 to five to three to two,” Brumley said. “The U.S. Federal Communications Commission worked to reduce the number of applicants with financial and other milestones and this worked. There are now two of us left — us and ICO. If Europe says it wants two players, it could begin a slicing process that forces a consolidation over time, or that forces people out of the market.”

TerreStar’s first satellite features an 18-meter-diameter S-band antenna and Brumley said the second spacecraft, also ordered from Loral, may have an even bigger antenna. Each TerreStar satellite is expected to weigh around 6,700 kilograms at launch.

Survey Finds Rising Tide for Sat Services

Pretax profit margins for the major fixed satellite services operators increased slightly in 2005, to nearly 30 percent, ending a four-year slide as demand for capacity increased, according to a market survey by Euroconsult.

Euroconsult Managing Director Pacome Revillon said demand for satellite transponders increased by 6.2 percent in 2005, mainly because of growth in the number of free and pay television channels.

Revenues for the sector were up by roughly 7 percent, to about $7.5 billion, as transponder-lease prices firmed and in some cases increased, according to Euroconsult.

The news is not all good, however. Euroconsult’s findings also showed that the major satellite operators’ average net profit continued a decline that began in 2000.

Mergers and acquisitions and other special-case situations complicate the analysis. But EBITDA, or earnings before interest, taxes, depreciation and amortization — a commonly used financial metric for the satellite sector — improved only slightly in 2005, to around 65 percent of revenues.

Euroconsult said the average backlog for a sampling of the major fleet operators, including Intelsat, SES Global and Eutelsat, continued to fall, although the picture varies widely among the operators.