ESA, Spot Image Sign Multiyear Contract

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  Space News Business

ESA, Spot Image Sign Multiyear Contract

By PETER B. de SELDING
Space News Staff Writer
posted: 23 January 2006
11:49 am ET


In a deal that could serve as a precedent in Europe’s Earth observation business, Spot Image and the European Space Agency (ESA) have signed a multiyear, bulk-purchase contract for satellite imagery, according to Spot and ESA officials.

The contract’s significance is not its size. Valued at 6 million euros ($7.3 million) over three years, the deal gives ESA the right to order 12,000 images from the Spot 2 and Spot 4 satellites, which have a ground resolution of 10 meters in black and white and 20 meters in color. It does not include imagery from the newer, higher-resolution Spot 5 spacecraft, which is Spot Image’s principal source of revenue.

Half the imagery to be ordered will be drawn from Toulouse, France-based Spot Image’s archives, with the rest available to ESA as a result of specific orders for fresh scenes from the spacecraft.

The deal remains small compared to the $500 million, multi-year contracts between the U.S. National Geospatial-Intelligence Agency (NGA) and commercial U.S. providers of satellite Earth observation data. But it takes European governments a step closer to the NGA-tested business model that European satellite operators have long wanted. In the past, European governments have said their budget laws make it difficult for them to sign multiyear contracts of this type.

“The idea is not new and parts of our contract with Spot — for example, the agreement on shared use of ground stations — have been done before. But what we are doing here is making the agreement much bigger,” said Gunther Kohlhammer, head of ESA’s ground segment department at the agency’s Esrin center in Frascati, Italy.

In a Jan. 18 interview, Kohlhammer said the Spot Image contract calls for ESA to take over operations of Spot ground stations in Sweden and in Spain’s Canary Islands. Part of the agency’s payment for imagery will be in relieving Spot Image of the cost of operating these facilities, which are next door to ESA satellite operations stations.

Herve Buchwalter, chairman of Spot Image, said ESA will use the imagery it receives for distribution to so-called Category-1 users, typically universities and research institutions that have a right to reduced-cost satellite data.

Buchwalter and Jean Dauphin, business development manager for EADS Astrium’s Earth observation, navigation and science division, said during a Jan. 17 conference that bulk-purchase arrangements are one way of providing inexpensive data to researchers while guaranteeing image providers a revenue stream.

“Users want data as inexpensively as possible,” Dauphin said during the conference, organized by the French Institute for International Affairs. “But businesses that invest in satellite infrastructure need to generate sufficient returns. These two goals are obviously in conflict.”

Dauphin said European government authorities, now planning a multiyear program on Earth observation called Global Monitoring for Environment and Security (GMES), will need to set data-access policies that meet both users’ and data providers’ demands.

Kohlhammer said ESA and Spot Image are finalizing a similar agreement relating to South Korea’s Kompsat-2 optical Earth observation satellite, set for launch this spring. Spot Image is responsible for commercializing Kompsat-2 data outside South Korea, the United States and the Middle East.

Negotiations also have begun with the Chinese and Brazilian owners of the Cbers Earth observation spacecraft. In both the Kompsat-2 and Cbers cases, Kohlhammer said, the agreement would not include cash. ESA would limit its investment to handling Kompsat-2 and Cbers ground stations in Europe, in return for similar services in Brazil and South Korea. Each side then would have access to a certain amount of imagery — again for Category-1 users only — on the other’s satellites.

ESA has been able to finance the three-year Spot Image contract through its general budget, one of the few ESA funding lines that are given multiyear budget commitments.

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