DirecTV Bemoans Bulk Purchases, High Cost of Spaceway Satellites

by





LONDON — DirecTV would like to purchase more Spaceway-type satellites with sophisticated on-board processing but the technology remains too expensive to undertake a repeat order, a DirecTV official said. The official added that DirecTV is unlikely to conduct any more bulk purchases of satellites because it suspects quality drops off after the first one is built.

In Sept. 8 comments during the World Satellite Business Week conference in Paris organized by Euroconsult, Phil Goswitz, senior vice president at El Segundo, Calif.-based DirecTV, said that five years after the launch of the Spaceway 1 and Spaceway 2 Ka-band satellites, the company regrets that the price of the technology remains too high to order more of them.

Three Spaceway satellites were built by Boeing Satellite Systems International, also of El Segundo, and originally intended for a global broadband data network. Two were subsequently purchased by DirecTV and converted to television broadcast use.

DirecTV wrote down the value of the Spaceway satellites, but for Goswitz, the spacecraft set a performance standard that remains unmatched in their ability to change beams and coverage areas at the flick of a switch.

“The Spaceway satellites have a really fabulous antenna,” Goswitz said. “You send commands, and beams appear. If you want coverage of South America, or Puerto Rico, just send a command. That’s unbelievable. The problem is that this is not an affordable technology. If you can make it affordable, that’s fantastic.”

Goswitz conceded that DirecTV has not recently asked satellite builders to deliver cost estimates for digital signal processors that would include Spaceway-level beam switching, and that his information may be out of date.

But the two principal satellite broadband providers in the United States, Hughes Communications Inc. of Greenbelt, Md., and ViaSat Inc. of Carlsbad, Calif., agreed with Goswitz.

Paul Gaske, Hughes executive vice president and general manager for North America, and Mark Dankberg, chief executive of ViaSat, said Spaceway-type signal processing would mean reducing the throughput of their satellites, in addition to carrying a price penalty. Hughes operates the Spaceway 3 satellite, which was launched in 2007, but like ViaSat has decided on a design with little on-board processing for its next spacecraft.

Goswitz, whose company in the past has ordered several satellites at a time under a single contract, said DirecTV is unlikely to do so again.

Manufacturers, he said, tend to assign their best people to new satellite orders. After the first satellite is completed, the top people tend to other projects.

“If you buy two or three satellites, the ‘A’ team does the first one and then goes off to the next challenge. Then you get the ‘B’ team,” Goswitz said.

Three major satellite manufacturers have received bulk orders from commercial satellite operators: Astrium Satellites of Europe, for Inmarsat of London and SES of Luxembourg; Boeing, for DirecTV, Intelsat of Luxembourg and, more recently, Inmarsat; and Orbital Sciences of Dulles, Va., for SES. All three took issue with Goswitz’s assessment in Sept. 8 comments during the Paris conference.

Stephen T. O’Neill, president of Boeing’s satellite building division, said the point of a multi-satellite order is to reduce per-satellite costs by taking advantage of the fact that the non-recurring engineering charges are tackled in the first satellite.

O’Neill said some engineers’ specialty is non-recurring engineering, and that these people may indeed be reassigned after the first satellite. But it’s a misunderstanding of engineering talent to label replacements as lesser quality.

Astrium Satellites Chief Executive Evert Dudok made a similar point. “We are able to let the customer benefit from very large synergies in our bulk order with SES,” he said. “This leads to attractive prices. It’s not about ‘A’ and ‘B’ teams”

Orbital Chief Executive David W. Thompson said his company “can’t afford to have ‘A’ teams and ‘B’ teams on our floor. Our customers would not put up with that.”