To Choose Builder of Ku-band Satellite in April

Norway’s Telenor Satellite Broadcasting has received five bids for a new all-Ku-band telecommunications satellite for its 1 degree west orbital slot and expects to select a winner by late April, Commercial Director David Gilmore said.

It will be Telenor’s second satellite purchase in two years, following the 2005 selection of Orbital Sciences for a Thor 2R satellite, recently renamed Thor 5. Thor 5, to be launched late this year aboard an International Launch Services Proton-M rocket, will carry 24 Ku-band payloads, have 3.8 kilowatts of on board power and will replace the Thor 2 satellite s cheduled to be retired in 2008.

Al Lewis, Thor 5 program manager at Dulles, Va.-based Orbital Sciences, said Thor 5 production is on schedule for an August shipment to the Baikonur Cosmodrome spaceport in Kazakhstan. Telenor is spending 1.2 billion Norwegian kroner ($196 million) on the procurement, including launch and a satellite control station also being provided by Orbital Sciences. Orbital Sciences is responsible for the in-orbit delivery of the satellite.

The satellite to be ordered this year will replace the Thor 3 satellite, to be retired in 2010, which like Thor 2 is located at 1 degree west longitude. Telenor also owns half the capacity of the Intelsat 10-02 satellite.

Gilmore said Telenor considered, and then rejected, the idea of adding a payload in S-, C- or Ka-band to the satellite to be ordered this year. He said the demand in the Middle East and Eastern Europe for C-band was insufficient to justify the investment, while an S- or Ka-band option would have delayed the satellite’s delivery beyond the retirement date of Thor 3.

Telenor Satellite Broadcasting beams television to 3 million homes in the Nordic region and 1 million in Central and Eastern Europe. Like other satellite operators, Telenor believes high-definition television is a near-term growth driver as high-definition channels take more satellite bandwidth than standard-definition programming.

“I would have thought that the Nordic market [for satellite television] was saturated, but even saturated markets can grow,” Gilmore said Feb. 20.

Gilmore said that Telenor has received five credible bids from satellite manufacturers seeking to win the contract. He said that when compared to the company’s 2005 procurement, the current market offers better value for money for satellite operators than was the case in 2005.

In the past four years, several large-satellite builders, including Lockheed Martin, Space Systems/Loral, Astrium Satellites and Alcatel Alenia Space, have been active in competing in the market for satellites with less than 5 kilowatts of power and a launch weight of less than 3,500 kilograms.

Satellite Owners Rush To Find ’08-’09 Launches

The Sea Launch failure Jan. 30 has caused a rush by satellite operators to secure the few 2008-2009 launch slots that remain among the commercially available vehicles. In the less than four weeks since the failure, no fewer than six commercial launch contracts have been signed — a sign of the growing anxiety among satellite owners whose regulatory deadlines or business cases make it imperative that they be in orbit as soon as possible.

“I’ve never seen anything like this in 20 years in the business,” said one launch-industry veteran. “These guys are in full panic mode.”

The satellite launches contracted include the Inmarsat 4 F3 mobile communications satellite, to be launched aboard a Lockheed Martin Atlas 5 vehicle; Canada’s Ciel-2, aboard an International Launch Services Proton-M rocket; EchoStar’s CMBSat and a possible second satellite, both on Protons; SES Global’s AMC-21, which left a Sea Launch reservation for a more-certain spot aboard the Arianespace Ariane 5 ECA; and Canada’s Nimiq 5, aboard a Proton.

Officials said satellite-fleet operator Intelsat is negotiating the possible sale of an Atlas 5 launch reservation to Measat of Malaysia.

SES Moves Launch of AMC-21 From Land Launch to Ariane 5

SES Global has switched the launch of its AMC-21 telecommunications satellite from Sea Launch’s new Land Launch variant to Europe’s Ariane 5 ECA launch vehicle because of concerns that the Jan. 30 Sea Launch failure and ongoing supply-chain interruptions at Land Launch would make it difficult for Sea Launch to assure a mid-2008 liftoff.

The AMC-21 satellite, under construction by Alcatel Alenia Space and Orbital Sciences Corp. — the first collaboration between the two manufacturers — is scheduled to weigh 2,500 kilograms at launch and carry 24 Ku-band transponders. Arianespace has committed to a launch in the first half of 2008. The satellite’s relatively low weight should make it relatively easy for Arianespace to find a co-passenger to fill the other spot that will be available aboard Ariane 5 ECA that launches AMC-21.

AMC-21 is a class of satellite that Arianespace hopes will gravitate to the medium-lift Russian Soyuz rocket, which Arianespace will operate alongside the heavy-lift Ariane 5 ECA starting in 2009.

NASA Signs Development Deal with Virgin Galactic

NASA officials signed a memorandum of understanding Feb. 20 with Virgin Galactic LLC, to explore the potential for collaborations on the development of space suits, heat shields for spaceships, hybrid rocket motors and hypersonic vehicles capable of traveling five or more times the speed of sound.

The memorandum of understanding will be in effect for two years and stipulates that neither NASA nor Virgin Galactic will be required to pay any fees or provide funds to support the areas of possible collaboration.

Under the terms of the memorandum, NASA Ames Research Center, located in Moffett Field, Calif., and Virgin Galactic LLC, a subsidiary of Sir Richard Branson’s Virgin Group, will explore possible collaborations in several technical areas employing capabilities and facilities at NASA Ames.

The agreement with Virgin Galactic was negotiated through NASA’s Space Portal, a newly formed organization in the NASA Research Park at Ames, which seeks to engage new opportunities for NASA to promote the development of the commercial space economy.

(Editor’s note: For more about Virgin Galactic’s plans for the future, see the article on page 16).

Space Agency Issues RFP For the Ares 1 Upper Stage

NASA’s Marshall Space Flight Center issued a request for proposals (RFP) Feb. 23 for the Ares 1 launch vehicle’s upper stage. Proposals are due April 13 with a contract award expected in August.

The winning contractor team will help NASA design the upper stage and be responsible for producing it through 2016.

The competition is expected to pit the Boeing company against an Alliant Techsystems (ATK) team that includes Lockheed Martin and Pratt & Whitney Rocketdyne.

ATK and Pratt & Whitney Rocketdyne are currently under contract to develop respectively the Ares 1 main stage and the J-2X upper-stage engine. Lockheed Martin was selected in August to build the Orion Crew Exploration Vehicle that will launch atop the Ares 1. NASA hopes to field the new launch system in 2014.

NASA intends to hold a separate competition this year to select a contractor to design and develop the avionics suite for the manned rocket. That competition is expected to attract a wider field of competitors.

NASA Seeks Proposals for Microgravity

NASA’s Glenn Research Center issued a draft request for proposals Feb. 20 for reduced-gravity aircraft flight services for training and research purposes. According to the solicitation, NASA anticipates buying 15 to 20 weeks of flights per year but is not obligated to pay for more than a single week of flights under the envisioned five-year contract.

NASA bought two trial flights from Ft. Lauderdale, Fla.-based Zero Gravity Corp. in 2005 and last year agreed to hold a competition to decide whether to buy more flights from the company, keep operating its own DC-9 aircraft, or turn the operation of its aircraft over to a private contractor.

Byron Lichtenberg, Zero Gravity Corp.’s co-founder and chief technical officer, said the company was reviewing the draft request for proposals and expected to submit comments to NASA.

A contract award is expected in August with the first flights to begin as early as September.

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Two More Incidents Add
To Growing Space Debris

PRIVATE tabstops:<*t(0.000,0,” “,85.500,0,” “,)> The Feb. 19 explosion of a Russian Breeze-M rocket stage launched a year ago created an amount of orbital debris on “the same order of magnitude” as the Jan. 11 Chinese anti-satellite (A-Sat) test, a NASA debris scientist said Feb. 23.

“This is an unprecedented set of events in terms of such large breakups in such a short time,” Mark Matney, an orbital debris scientist at NASA’s Johnson Space Flight Center, said Feb. 23.

The Proton debris is in a highly elliptical orbit with an apogee of 15,000 kilometers and a perigee of 500 kilometers. That means the Proton debris will remain in orbit for several decades because the time spent at perigee is very short, Matney said

The Breeze-M upper stage, part of a Proton rocket launched Feb. 28, 2006, by International Launch Services, was supposed to deliver the Arabsat 4A satellite into geosynchronous orbit. It failed and, for unknown reasons, the hypergolic fuel-laden rocket exploded almost a year later. Debris larger than 10 centimeters is being tracked although Matney said the official catalog of space debris had not yet been updated. The Air Force personnel responsible for tracking debris catalog “are pretty busy” building the catalog of the debris field from the Chinese FY-11 weather satellite destroyed during the anti-satellite test, the NASA scientist said.

There are also reports of another February debris event. Observers in Finland photographed the apparent explosion of an auxiliary motor on a Russian SL-12 rocket Feb. 14, according to T.S. Kelso, technical program manager at the Center for Space Standards and Innovation in Colorado Springs, Colo., a research arm of Analytical Graphics Inc. “These events are most unusual. If they are indeed both on-orbit explosions, that would make two events in less than a week. According to the NASA Orbital Debris Program Office, there were only eight events all of last year, and that was the most since 1993,” Kelso said in a Feb. 23 e-mail.

Seeks FCC Approval For New Ka-band Satellite

ViaSat Corp., a provider of satellite communications terminals, is thinking about moving up the food chain. The Carlsbad, Calif., company is asking the U.S. Federal Communications Commission (FCC) to license a Ka-band broadband satellite as one way of addressing what ViaSat Chief Executive Mark Dankberg said is an ongoing shortage of Ka-band capacity in orbit.

“What we are about is creating a market,” Dankberg said Feb. 22 in explaining the company’s decision to seek a license for its own satellite. “The lack of capacity constrains the market, and right now there is not enough capacity. People want more bits at the lowest cost. It’s as simple as that. What we are looking at is: How do we create that market? We are seriously exploring every opportunity to create capacity.”

ViaSat also announced it has acquired Intelligent Compression Technologies Inc. (ICT) of Quincy, Mass., in a transaction initially valued at approximately $20 million.

The purchase price includes approximately $6.5 million in cash and more than 400,000 shares of ViaSat stock. The transaction ultimately could be worth up to $34.3 million if ICT meets financial performance targets in the next two years.

Abandons Damages Claim Against NASA

More than two years after suing its biggest customer for $79.7 million in damages related to the 2003 Space Shuttle Columbia disaster, Houston-based Spacehab announced Feb. 21 that it was seeking a dismissal of its claim against NASA.

NASA agreed in 2004 to give Spacehab $8.2 million as compensation for the loss of the company’s Research Double Module, which Columbia’s crew used to conduct science experiments during a 14-day mission. Spacehab, however, valued the leased module at $87.7 million and initiated proceedings to recover the difference. In late 2004, Spacehab filed an appeal with the Armed Services Board of Contract Appeals and had been preparing for a mid-2008 court hearing. The company also filed a separate tort claim in late 2004, which was set aside last year pending resolution of the contract claim appeal.

Thomas B. Pickens, Spacehab’s president and chief executive officer, said in a statement that dismissing the claim against NASA “is in the best interest of the company and [I] am very pleased with Spacehab’s pragmatic business decision in resolving this complex matter.”

Spacehab also announced it is paying Lloyd’s of London, the Research Double Module’s insurer, $500,000 as a result of its decision to dismiss its claim.

Spacehab attributed about half of its $12 million net loss for 2006 to a write off of the destroyed hardware. The 180-person space services company has continued to feel the effects of NASA’s reduced space shuttle manifest since its current fiscal year began July 1. In the quarter that ended Dec. 31, Spacehab saw a loss of $1.8 million on revenues of $12.9 million, adding to a first quarter loss of $32,000 on revenues of $14.9 million.

Eutelsat, ViaSat To Offer Rural Broadband Service

Eutelsat Communications of Paris and ViaSat Inc. of Carlsbad, Calif., will jointly provide consumer broadband satellite service in small European markets beginning with select areas in Western Europe , ViaSat announced Feb. 19.

The service will be inaugurated in Germany, Switzerland, Spain and Portugal in June. The financial services firm PricewaterhouseCoopers has estimated that the percentage of Western European homes connected with broadband services will nearly double, from 30 percent to 58 percent, between 2005 and 2010, according to the press release.

The new service will be based on ViaSat’s SurfBeam system, which is used today by WildBlue Communications for delivering broadband connectivity in rural areas of North America. The open-standards network enables commercially viable two-way satellite broadband service to be provided to areas with sparse populations.

“ViaSat and Eutelsat have a tradition of successful cooperation,” Marc Agnew, ViaSat vice president of Broadband Systems, said in a prepared statement .

GOES-R Satellite Sensor Clears Design Review

A key instrument being developed by ITT Space Systems for the U.S. government’s next-generation Geostationary Operational Environmental Satellite (GOES) system passed its critical design review, clearing the way for construction of a flight qualification prototype , the company said Feb. 21.

The Advanced Baseline Imager is a multispectral radiometer designed to provide the National Weather Service with cloud imagery and other information needed for routine weather and severe storm forecasting.

The critical design review took place Feb. 14-15 at ITT’s Fort Wayne, Ind., facility and was led by officials from NASA’s Goddard Space Flight Center. NASA is managing the procurement of the GOES-R satellites on behalf of the National Oceanic and Atmospheric Administration (NOAA).

NOAA announced last year that the cost estimate for the GOES-R satellite series had nearly doubled, from $6.2 billion to $11 billion. The agency recently decided to slow down the project. The 2008 budget request for GOES-R, at $279 million, is $53 million less than 2007’s level, and launch of the first satellite has slipped from 2012 to 2014.

Teams led by Lockheed Martin Corp., Boeing Co. and Northrop Grumman Corp. are competing to build the satellites. A contract award is expected in 2008.

Orbital Reports Gains in Revenue, Profit in 2006

A strong fourth quarter fueled by its commercial satellite business helped Orbital Sciences Corp. of Dulles, Va., close out 2006 with a $39.6 million adjusted profit on revenues of $802.8 million, the company reported Feb. 21.

For 2005, the space hardware manufacturer reported a profit of $27.8 million on sales of $705.5 million.

Revenues for the quarter ending Dec. 31, 2006, came in at $215.8 million, up 8 percent over the $199.6 million the company reported for the fourth quarter of 2005. Satellites and related space systems accounted for $125.4 million in fourth quarter revenues — up from $106.5 million in the 2005 fourth quarter — while the launch vehicle business pulled in $80.2 million . Launch vehicle revenues were $87.7 million during the 2005 fourth quarter .

David W. Thompson, Orbital’s chairman and chief executive officer, said the company benefited in 2006 from stronger sales and higher profit margins in its commercial satellite business.

The company also booked $220 million worth of new business during the fourth quarter . The new business included $160 million in new firm contracts and $60 million in options exercised under existing contracts.

Orbital ended the year with a firm contract backlog of $1.79 billion, up 42 percent over the 2005 year-end level.

Raytheon Unit Delivers Prototype Navy Terminal

The U.S. Navy has begun testing a prototype satellite communications terminal that Raytheon Network Centric Systems of Marlborough, Mass., delivered Feb. 16 , a Raytheon official said during a telephone interview.

The Navy Multiband Terminal (NMT) will enable users on submarines, ships and on shore to connect with systems including the Defense Satellite Communications System, Milstar, Wideband Global and the Advanced Extremely High Frequency system.

Prior to delivering the NMT prototype, Raytheon conducted its own “rigorous testing and performance verification,” Colin Schottlaender, Raytheon Network Centric Systems president, said in a Feb. 15 news release.

Raytheon is competing against Harris Corp. of Melbourne, Fla., to build the operational NMT terminals. The Navy is expected to make a selection in June 2007, with deployment slated to begin in 2009.

Boeing Focusing on Full Capabilities for GPS 3

Boeing is emphasizing upgrade flexibility, including the ability to make on-orbit performance enhancements, in its design approach to the U.S. Air Force’s next generation of GPS navigation satellites.

The Air Force plans to deploy the GPS 3 constellation in three phases, or blocks, each one ushering in new capabilities such as increased signal-strength, accuracy and resistance to jamming. The Air Force intends to order 30 or more GPS 3 satellites, with the first block consisting of eight spacecraft.

Boeing Space and Intelligence Systems of Seal Beach, Calif., and Lockheed Martin Space Systems of Sunnyvale, Calif., are competing to build the GPS 3 system and are developing their respective designs under study contracts worth $50 million apiece. A formal request for proposals for the multibillion-dollar prime contract could be issued anytime between March and July, with an award expected by the end of the year, according to Craig R. Cooning, vice president and deputy general manager of Boeing Space and Intelligence Systems.

The first GPS 3 satellite is scheduled to launch by 2013.

Cooning said Boeing is designing its initial block of GPS 3 satellites, known as GPS Block 3A, with the full system capabilities in mind. In other words, he said, these satellites will be designed so that their capabilities can be improved relatively easily, both on the ground and in orbit through measures such as software uploads.

Speaking to reporters Feb. 20 during the Satellite 2007 conference in Washington, Cooning, a retired Air Force major general, said building on-orbit upgrade flexibility into the initial GPS 3 satellites would provide for a more capable overall system as successive blocks come on line. In addition, he said, by designing the initial satellites with the full system capabilities in mind, Boeing will be able to move up to the Block 3B and Block 3C configurations with relative ease.

Boeing has struggled on GPS 3’s immediate predecessor, GPS 2F. The first of 12 GPS 2F satellites is slated to enter thermal vacuum testing in April and be delivered to the Air Force in December, Cooning said. Launch is slated for May 2008, he said.

Lockheed Martin built the GPS 2R satellites that currently are being launched.

Ultimately the GPS 3 satellites will include signal compatibility with Europe’s planned Galileo satellite navigation system and spot beams to magnify signal strength and accuracy over specified areas. Cooning said the spot beams represent a Block 3C capability. Boeing’s Block 3A and 3B satellites, once launched, could not be outfitted with the spot-beam capability, he said.

Boeing-Built Measat-3 Handed Off to Customer

Boeing Satellite Systems of El Segundo, Calif., has completed in-orbit testing of the Measat-3 satellite and handed over control of the spacecraft to its customer, Measat Satellite Systems Sdn Bhd of Cyberjaya, Malaysia, Boeing announced Feb. 19.

The 4,765-kilogram geostationary satellite, built on a Boeing 601HP frame, is equipped with 24 C-band and 24-Ku band transponders and will provide direct-to- home television and other telecommunications services to 110 nations in the Asia-Pacific region, Eastern Africa, Eastern Europe and the Middle East. The addition of Measat-3, alongside Measat-1, triples the company’s broadcast capacity at the 91.5 degree east orbital slot.

Measat-3 was launched Dec. 11 aboard an International Launch Services Proton M rocket from Russia’s Baikonur Cosmodrone in Kazakhstan. The satellite was a year late due to problems at Boeing’s satellite construction facility.

Sea Launch Failure To Have Little Effect on Insurance

Insurance underwriters will face resistance if they try to increase premiums following the Jan. 30 failure of a Sea Launch rocket carrying the NSS-8 telecommunications satellite, according to satellite operators and launch-service providers.

The NSS-8 launch was insured by Boeing for $200 million, Boeing said in a Feb. 16 filing to the U.S. Securities and Exchange Commission. Boeing owned the satellite and secured the launch under an unusual contract with NSS-8’s owner, SES Global. In addition to that policy, Sea Launch Co. took out a separate, $56 million policy to insure itself in the event of a failure because it will be obliged to offer a free relaunch to Boeing as the satellite’s owner, according to industry officials.

Sea Launch’s floating launch platform sustained damages that have yet to be quantified, but insurance for the platform was placed with insurers outside the space sector and these claims will not put pressure on space insurance premiums, industry officials said.

Insurance underwriters have been forced to reduce premiums steadily during the past three years following generally good results and the entry into the insurance pool of new underwriters, which increased the total amount of available space insurance coverage.

Insuring a satellite for its launch, plus the first year in orbit, has fallen to 15-16 percent of the face value of the policy from 20-25 percent three years ago.

“Underwriters are already saying that the Sea Launch failure will cause rates to rise, but we think there is sufficient capacity in the market now that we can keep this to a minimum,” said one insurance broker. “New insurance capacity is entering the market now after we’ve had several very profitable years, and it will be a battle between insurers wanting to push rates up and those willing to keep them where they are.”

Boeing Rethinks Strategy For Commercial Satellites

Boeing Satellite Systems International (BSSI) is reviewing its approach to bidding on commercial satellite manufacturing contracts given the strength of the sector worldwide, but does not expect to make more than two or three bids in the commercial market each year, BSSI President Steve O’Neill said.

The commercial market’s rebound, and the emergence of projects that ask satellite builders to provide turnkey systems including launches, ground infrastructure and user terminals, has caused BSSI to look more closely at the sector, O’Neill said. In addition, BSSI has posted two successive years of profitability, making it easier for the company to win Boeing management’s backing for a slightly more aggressive involvement. Just as important, O’Neill said: Boeing in the past two years has reduced its cost basis and instituted production-process improvements that reduce the chance that a commercial program — where profit margins at the outset rarely exceed 5-6 percent — will fall into the red during development at Boeing’s El Segundo, Calif., plant. One example, O’Neill said, is the 73 percent drop in two years of BSSI’s cost of rework and repair.

Past commercial history continues to dog the company. Thuraya of Abu Dhabi, one of several BSSI customers whose early model 702 satellites were defective, and its insurers, are seeking up to $602 million in an arbitration proceeding in Paris to compensate for the loss. Boeing has said it has insurance coverage in the event of an adverse judgment, but some of Boeing’s insurers have asked an Illinois court to agree that Boeing’s insurance coverage does not extend to the Thuraya case.

Telesat Canada, another 702 customer, is seeking $395 million — including $10 million for lost business — for a similar problem on one of its satellites. Boeing has asked the Ottawa Superior Court to block Telesat’s attempt to force an arbitration of the case, Boeing said in a Feb. 16 filing to the U.S. Securities and Exchange Commission (SEC).

The same SEC filing disclosed that insurers representing Japan’s Space Communications Corp. are alleging gross negligence and asking for $215 million in damages related to the failure of the Superbird-6 satellite following its launch in April 2004. The launch by an International Launch Services Atlas 2AS rocket placed Superbird-6 into an orbit with a perigee that was too low. The satellite suffered damage and was declared a total loss. International Launch Services and Boeing each said the other was at fault for not properly programming the launch to assure a sufficiently high perigee.

Globalstar Shareholders File Class-Action Lawsuit

Iridium Chief Financial Officer Eric Morrison said competitor Globalstar has known for months that its system performance is less than optimal, with spotty coverage and call difficulties being reported to distributors — many of whom sell both Iridium and Globalstar satellite telephones.

In Feb. 19 comments, Morrison stopped short of saying Globalstar knew specifically that its sateliltes’ power amplifiers were degrading faster than Globalstar had previously disclosed. Globalstar disclosed the problem, which potentially could lead to a system shutdown in 2008 — at least a year before the new constellation of satellites will be ready. Globalstar successfully conducted an initial public offering of stock in November.

Globalstar President Anthony J. Navarra said Feb. 21 that Globalstar’s Feb. 5 disclosure, which caused a 28 percent drop in the company’s stock price the following day, was written to provide a worst-case scenario and does not represent the company’s best-guess assessment of its ability to manage through the problem until the second generation arrives. Navarra had said earlier that it was not until a January technical review of the constellation’s health that Globalstar discovered the faster-than-expected decline in the satellite components.

On Feb. 21, the law firm Schriffin Barroway Topax & Kessler LLP filed a class action in the U.S. District Court for the Southern District of New York on behalf of shareholders who owned Globalstar stock between the Nov. 2 stock offering and Feb. 5. The lawsuit alleges that Globalstar executives “failed to disclose and misrepresented … material adverse facts, which were known to defendants or recklessly disregarded by them.”

Arrowhead Acquired by CapRock Communications

CapRock Communications, a firm specializing in satellite solutions for customers operating in remote locations, will acquire Arrowhead Global Solutions, which arranges commercial satellite capacity for the U.S. military, the companies announced Feb. 21.

Arrowhead, based in McLean, Va., does not own or operate satellites. Instead, it acts as an impartial broker , setting up commercial satellite solutions for the military under the Pentagon’s Defense Satellite Transmission Services-Global (DSTS-G) contracting vehicle. Artel Inc. of Reston, Va., and Spacelink International of Washington provide similar services under the DSTS-G program.

Houston-based CapRock, whose customers include the oil and gas industry as well as the U.S. government, owns four international teleports and 10 regional operations centers, the company said in the press release.

Details including the price of the transaction, which must pass muster with U.S. regulatory authorities, as well as its anticipated closing date, were not disclosed.

Arrowhead will operate as a wholly owned subsidiary of CapRock once the deal closes, the press release said. Mary Ann Elliot, Arrowhead’s chairman and chief executive, will stay on in those capacities .

Arabsat Modifies Specs For Three New Spacecraft

Arabsat has modified the specifications for its future Arabsat 5A, 5B and 5C satellites and has given prospective bidders until March 12 to resubmit proposals in line with the new coverage contours, Arabsat Director-General Khalid Balkheyour said.

Riyadh, Saudi Arabia-based Arabsat is likely to place two firm orders, with an option for Arabsat 5C. Balkheyour said Arabsat expects to make a tentative selection in April and to sign a contract for the satellites later this year.

Arabsat is not the only Middle Eastern company seeking new satellite capacity. The long-simmering Yahsat project for two telecommunications satellites appears to be entering a final phase with bids from satellite builders due in the coming weeks, according to industry officials. Yahsat, or Al Yahsat Communications Co., is located in Abu Dhabi and 100 percent owned by the government’s Mubadala Development Co.

Industry officials said Boeing Satellite Systems International and a joint European bid by Alcatel Alenia Space and Astrium Satellites are likely to be the two competitors for Yahsat, which is asking bidders to provide an elaborate ground infrastructure in addition to the two satellites.

SES Negotiating Multi
Deals with Launch Providers

SES Global is negotiating long-term supply contracts with providers of launch vehicles under which the satellite-fleet operator would commit to purchasing three launch slots per year over a number of years in return for price and launch-date guarantees, SES Global Romain Bausch said.

 Luxembourg-based SES Global expects to need to launch three satellites per year, on average, for the foreseeable future for fleet replacement and the occasional venture into new markets or to expand market share. The company is concerned that the global supply of launch vehicles available to it is barely sufficient for the current market demand, and that any supply interruption — such as a launcher failure that grounds a vehicle for several months — could leave companies like SES Global stranded.

Currently there are four companies with rockets that are active on the commercial market to launch large telecommunications satellites: the Boeing-led Sea Launch Co., whose vehicle is grounded following a Jan. 30 failure pending the results of a failure analysis; the European Arianespace consortium and its Ariane 5 vehicle; International Launch Services and its Proton-M; and Lockheed Martin Commercial Launch Services, which markets the Atlas 5. Bausch said SES Global has opened negotiations on possible multi year deals with all of them.

“One of the first priorities of a company such as ours is to secure our access to space,” Bausch said in a press briefing here Feb. 20. “What we want to do is to sign agreements with two launcher providers to assure that our ongoing need for a total of about three launches per year would be guaranteed.”

India is developing a heavy-lift rocket, and Bausch said the Indian Space Research Organisation, sooner or later, will enter into the mix of companies to be considered for long-term guaranteed-supply contracts.

The China Great Wall Industry Corp., which markets the Chinese Long March rocket, currently is able to launch satellites of the type purchased by SES Global and other commercial-fleet operators. But the U.S. government, alleging China Great Wall and Chinese government complicity in selling missile technology to Iran, has prohibited the use of Chinese rockets for satellites containing U.S. components.

Bausch said that if the launcher-supply problem gets any worse, SES Global will begin considering a policy of purchasing satellites built without any U.S. components to permit their launch by Chinese rockets. Alcatel Alenia Space of Europe offers a no-U.S.-content satellite design and has sold two to China’s Chinasat telecommunications satellite operator. The first of them is scheduled for launch this year.

Tax Issues Will Complicate Resale of AsiaSat, Star One

GE Capital may not be able to resell its stake in satellite operators AsiaSat and Star One anytime soon if it wishes to take full tax advantage of the pending purchase of those operators from SES Global, industry officials said.

They said the agreement, which is pending regulatory approval and determination of the related tax issues , is subject to the conditions of the U.S. Internal Revenue Service’s Section 355, which deals with the tax treatment of spinoff companies.

GE Capital has agreed to take a package of cash and assets from SES Global in return for GE’s 19.5 percent stake in the Luxembourg-based fleet operator. GE Capital has declined to discuss its strategy for those assets, which include the AMC-23 satellite over the Pacific Ocean, which is about 30 percent full, and the Satlynx two-way broadband satellite service provider. Under the terms of the transaction, GE Capital will own 34 percent of Hong Kong-based AsiaSat and 19.9 percent of Brazil’s Star One.

Two industry officials said their understanding is that the favorable tax treatment of such a transaction is conditioned on GE Capital’s agreeing to hold at least part of the acquired assets for several years. “Don’t expect a quick flip,” one official said. “The tax treatment is the center of this deal; it’s what made it acceptable to GE Capital.”