Commercial Satellite Sales Rebound in 2005

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Nineteen geostationary-orbit commercial telecommunications satellites were ordered in 2005, a rebound year that some industry officials believe could be achieved again in 2006.

The picture in 2005 reveals the increasing diversity of a market in which 6,500-kilogram, 50-plus-transponder spacecraft coexist with 2,200-kilogram models. It also represented a significant improvement over 2004 when just 12 commercial telecommunications satellites were ordered.

Two new players entered the market in 2005. Japan’s Mitsubishi Electric Corp. of Tokyo won the contract to build the Superbird-7 satellite for Space Communications Corp. It marked the first time a Japanese manufacturer was selected for a Japanese commercial satellite.

In an unusual contract, China Aerospace Corp. won a big order from Nigeria’s space agency for a telecommunications satellite in China’s first satellite export. Nigerian officials said they sought bids from other companies before agreeing to the Chinese offer, which includes partial payment in Nigerian crude oil. Venezuela recently announced a similar deal with China Aerospace Corp., but the status of that contract remained unclear and is not included in this year’s count.

The 2005 results also highlight the market’s lack of fidelity to any given corporate brand. Two years ago, Orbital Sciences Corp. of Dulles, Va., was a niche player often ignored by its larger competitors. In 2005, the company’s small Star satellite platform found new customers in Europe and Asia and tied with Lockheed Martin and Space Systems/Loral in the number of satellites contracted.

Orbital Sciences Corp. President David Thompson told financial analysts that 2006 is likely to be as good a year for the company as 2005 in the commercial satellite market as even large satellite-fleet operators are attracted to smaller, less-expensive spacecraft.

If imitation is flattery, then Orbital’s competitors appear to agree with Thompson. In one of the most surprising contract wins of 2005, Lockheed Martin was able to design its A2100 satellite platform small enough — and inexpensively enough — to win the BSAT 3A contract from Japan’s Broadcast Satellite System Corp., formerly a regular Orbital Sciences customer.

EADS Astrium’s Eurostar product line centers on larger satellites, but the company in 2005 struck a cooperation accord with Antrix of India to make joint bids for satellites of the size Orbital Sciences builds, with Antrix providing the platform and EADS Astrium the payload electronics.

Alcatel Alenia Space has a similar agreement with NPO PM of Russia. The two companies have jointly built about a dozen Russian communications satellites and Alcatel Alenia hopes to broaden the partnership to business outside Russia.

Alcatel Alenia Space also booked four commercial orders, but one — the Amos-2 satellite ordered by Space-Communication Ltd. of Israel — is for the payload only. Israel’s domestic manufacturer, Israel Aircraft Industries Ltd., will provide the satellite platform. Alcatel has carved out a market for itself as a supplier of payload electronics assemblies.

Alcatel Alenia Space, the result of the July merger of Paris- and Rome-based companies, continued in 2005 to reap the benefits of its decision to build satellites that have no components subject to U.S. State Department export approval. That leaves Alcatel free to serve the Chinese market virtually by itself, and resulted in the Chinasat 6B satellite contract.

The year 2005 also marked the absence from the commercial winners’ circle of Boeing Satellite Systems International — also known as the Satellite Development Center — which not that many years ago was the industry’s undisputed sales leader.

Boeing Satellite Systems President Stephen T. O’Neill said the company remains focused on providing specific satellite technologies and will not be active in the commercial market for classic bent-pipe satellites, which he said have become commodities in the way they are purchased.

Boeing continues to focus on larger satellites and believes that it will be able to leverage its work on U.S. Defense Department spacecraft, including the Wideband Gapfiller series, to win commercial business.

Space Systems/Loral of Palo Alto, Calif., which topped the rankings in 2004 with five satellite orders, booked four more in 2005 — including the XM-5 satellite for XM Satellite Radio of Washington, a contract win that took a prized customer away from Boeing. Space Systems/Loral’s parent, Loral Space and Communications of New York, saw the end to more than two years of bankruptcy proceedings late in 2005 and Chairman Bernard L. Schwartz immediately announced the company would be hiring several hundred engineers for the satellite manufacturing operation.

Space Systems/Loral’s 2005 profile also includes a contract from Loral Skynet for the Telstar 11N satellite. This contract is not counted in Space News’ annual rankings because it was an intra-company sale that was not competed in the market.

The same is true for EADS Astrium’s Skynet 5C satellite — a late-2005 contract from sister company Paradigm Secure Communications.