PARIS — Eutelsat plans to reduce the cost of its future satellites by some 20 percent initially, with more savings to come, as it seeks to adapt to a changing competitive environment, company officials said Dec. 1.
The immediate reductions are being made possible by a combination of all-electric satellite propulsion and a more-competitive launch-service environment.
Here is how the math works, according to Eutelsat Chief Technical Officer Yohann Leroy, addressing Eutelsat investors:
All-electric propulsion reduces a satellite’s launch weight by 40 percent or more. As long as Eutelsat’s business plan for the satellite can sustain a months-long wait to arrive in geostationary orbit, rather than a few weeks with conventional chemical propellant, the trade is positive.
A smaller satellite allows Eutelsat to place Europe’s Arianespace launch consortium and SpaceX of Hawthorne, California, in competition to launch the satellite. Arianespace reserves the upper berth of its Ariane 5 rocket for heavier satellites, with the lower berth for lighter spacecraft.
For years, Evry, France-based Arianespace was the only viable option for the launch of smaller telecommunications satellites heading to geostationary orbit. Then came SpaceX, whose Falcon 9 rocket — now being upgraded — has specialized in lighter telecommunications payloads.
The result, Leroy said, is that a satellite that with chemical propulsion would have occupied the Ariane 5 upper berth can now be fitted into the less-costly lower berth or aboard the Falcon 9. Responding to the SpaceX competition, Arianespace has reduced prices for its lower-berth customers.
Leroy said the Eutelsat 172B satellite, now under construction, will be launched aboard an Ariane 5 for more than 30 percent less than what it would have cost in the upper berth.
The total capital cost of placing a telecommunications satellite into geostationary orbit is made up of the satellite’s construction, accounting for 50 percent of the total; 30 percent for the launch vehicle; and the rest reserved for insurance charges and diverse expenses.
A 30-percent reduction in launch costs will thus result in a 10 percent overall savings in the capital investment.
Those are direct savings. There’s more: An electric-propulsion satellite can count in operating for 18 years in orbit, compared to 15 years for a satellite powered by chemical propellant — a 20 percent increase in lifespan.
Once in orbit, a satellite costs very little to operate, so a 20 percent life extension translates into a 10 percent overall cost savings when measured in the cost per transponder per year of orbital life — the metric many satellite operators use.
A 10-percent reduction in program costs because of lower launch charges, plus the equivalent of 10-percent savings in per-year costs from the longer service life gets to the 20 percent in total savings.
Like its principal competitors, Eutelsat is moving toward high-throughput satellites to capture new market opportunities in both fixed and mobile broadband.
Leroy said that for Eutelsat to compete head-to-head with terrestrial broadband providers in areas near large urban centers, a goal that if achieved would open up large new markets for satellite consumer broadband, it must reduce its satellite costs — construction, launch, insurance and ground segment — to 1 million euros ($1.1 million) per gigabit per second of throughput.
For comparison, Eutelsat said its Ka-Sat consumer broadband satellite, in service since 2011, cost some 4 million euros per Gbps. The satellite has 90 Gbps of throughput.
The African Broadband satellite now under construction by Thales Alenia Space of France and Italy, which is based on a new-generation platform based on European government-sponsored research, will cost between 1.33 million and 2 million euros per Gbps when it is launched in 2019, Eutelsat said.
How to get closer to the goal of 1 million euros in capital expenditures per Gbps?
Leroy said 3D printing, larger antenna reflectors, moving to higher radio frequencies such as Q- and V-band, wider use of gallium nitride-based solid-state power amplifiers and — longer term — using optical transmissions to save radio frequency for the links to users will all play a role.
