Final Contract for Spacecom’s Amos-3 Satellite Expected Soon

Fueled by funding secured on the local stock exchange, Israel’s Spacecom Ltd. has authorized government-owned Israel Aircraft Industries Ltd. (IAI) to begin building its next telecommunications satellite, the Amos-3, planned for launch by the end of 2007.

Spacecom, operator of the Amos-1 and Amos-2 satellites , signed a memorandum of understanding Feb. 24 with IAI for construction of Amos-3. Executives from both firms expect a formal contract for the estimated $130 million satellite to be concluded in the coming weeks. In the meantime , IAI’s MBT Space Division is finalizing arrangements with its team of subcontractors and suppliers and proceeding with initial pre-production work begun last year.

“We’ve been involved in very low-flame, low-obligation, pre-production work for some months now, and we anticipate a formal contract to be signed in the next few weeks,” Doron Suslik, IAI deputy corporate vice president for communications, told Space News March 29.

David Pollack, Spacecom’s chief executive officer, said primary proceeds from the firm’s March 10 initial public offering on the Tel Aviv stock exchange would be more than enough to launch full production of the Amos-3. Spacecom raised approximately $38 million through the sale of 1.725 million shares of common stock priced at about $7.50 per share, 115 million convertible bonds and 1.15 million options.

“There are enough funds to start production, and the big dollars will come later,” Pollack said March 30 .

Pollack noted that unlike Amos-2, whose construction costs were paid for in total up front, Amos-3’s production will be funded incrementally based on milestones reached. Spacecom and IAI decided to take this approach because of the experience accrued on the previous Amos construction programs and the low technical risk associated with Amos-3, he noted. “We’re confident now that we don’t need 100 percent of the cash on hand. Amos-3 will be a higher-performance satellite, but it does not entail development,” Pollack said.

IAI of Lod, Israel, owns 24 percent of Spacecom. Other partners include General Satellite Services and the Mer Services Group, both of Tel Aviv, and Eurocom Communications of Ramat Gan, Israel.

Like Amos-2 , Amos-3 is designed to operate for at least 12 years in Ku-band and Ka-band frequencies, with fixed beams covering the Middle East, Europe and the eastern coast of North America. However, the new satellite will feature 15 transponders — compared to 12 aboard the Amos-2 — as well as steerable beams that Spacecom executives say will expand its coverage .

Pollack said IAI, Israel’s sole producer of military and civilian spacecraft, already has demonstrated the new steerable beams planned for Amos-3. “We cannot allow any high-risk development with Amos-3; only manufacturing,” he said.

He said Spacecom is committed to launching Amos-3 before the end of 2007 so it can be in service before Amos-1’s operational life ends, as expected, sometime in mid-2008. Amos-3 will join its predecessors in geostationary orbit at 4 degrees west longitude.

Spacecom’s business plan calls for having multiple satellites operating at one location before expanding to new ones with follow-on craft , Pollack said. He said Spacecom already has begun very preliminary discussions with IAI regarding Amos-4, which is planned for an entirely new location.

Pollack said he hoped to be able to place a firm order for Amos-4 within a year.

Meanwhile, Pollack said, Spacecom intends to increase Amos-2’s market presence in the United States and Canada through a cooperative agreement formalized early last year with Te lenor Satellite Services of Rockville, Md. Under the agreement, Spacecom provides two Amos-2 transponders for uplink and downlink services to North America via a 9-meter teleport antenna built by Telenor in Southbury, Conn. The two companies split the proceeds from the resulting North American sales.

David Farmer, Telenor vice president for marketing, said his firm is bidding on several potential service contracts involving Amos-2, and is interested in offering capacity on Amos-3 once it is up and operating .