French Defense Budget Proposes Milsatcom Privatization

by

PARIS — The French Defense Ministry’s 2010 budget request would sell France’s military satellite telecommunications system to a private-sector operator that would lease 90 percent of the capacity back to the French government, and would retain the remaining 10 percent to sell to other governments on a commercial basis.

The budget, which the French government sent to the National Assembly, or parliament, on Sept. 30, is expected to be debated in October.

In addition to the satellite telecommunications proposal, it calls for the construction of three optical reconnaissance satellites, to be built as part of a five-nation optical and radar program called Musis, and for the long-delayed Athena dual-use broadband telecommunications satellite to be built with Italy.

France currently operates two Syracuse 3 military telecommunications satellites, which were built by manufacturer Thales Alenia Space of France and Italy under conventional procurement contracts.

Syracuse 3A was launched in October 2005 and operates at 47 degrees east. Syracuse 3B, located at 5 degrees west, was launched in August 2006. The satellites have a contracted in-orbit service life of 12 years.

Another Syracuse payload is under design and is expected to be built for a satellite called Sicral 2, which will carry an Italian military telecommunications payload as well.

Under the French government proposal, ownership of the two Syracuse 3 satellites and France’s portion of Sicral 2 would be subject to a sale and leaseback contract with a company that would take over operations.

Syracuse 3 was budgeted at 2.3 billion euros ($3.4 billion) over 15 years, including the satellites’ construction and launch, and the manufacture of several hundred land-, air- and sea-based mobile terminals for the French armed forces, to be delivered by 2014.

France has budgeted an additional 117.8 million euros for its 38 percent share of the construction and launch of the Sicral 2 satellite, according to late-2008 figures provided by the French parliament. France will place five X-band transponders on Sicral 2.

Astrium Services, which already operates Britain’s Skynet 5 military satellite telecommunications system, and all other beyond-line-of-sight communications for Britain’s defense forces, likely will bid against Thales Alenia Space to perform a similar function for France.

“The choice of switching to a partnership with industry, and to go from a systems-acquisition to a services-acquisition model for satellite telecommunications, was decided during the preparatory work” for the defense budget, according to a Sept. 30 document from the French Finance Ministry.

The document, which sets out the conditions of the sale, does not spell out whether the proceeds from the sale will remain with the Defense Ministry.

French President Nicolas Sarkozy has proposed that France increase spending on military space applications, in partnership with other European nations when possible, and alone if necessary. But the spending increase must coexist with a French defense budget that is not increasing.

Sarkozy has said new resources for military space programs will be made available from savings in the Defense Ministry’s operating budget as military bases on French territory are shut down or reduced in size.

France’s Helios 2B optical and infrared reconnaissance satellite is scheduled for launch late this year aboard Europe’s heavy-lift Ariane 5 rocket.

The Helios follow-on system, to be operational starting in 2015, is intended to be part of a five-nation system called Musis, short for Multinational Space-Based Imaging System for Surveillance, Reconnaissance and Observation.

Musis would include three optical satellites built under French leadership but including contributions from Belgium and Greece, and possibly Spain. Germany would lead development of a next-generation radar satellite system to succeed Germany’s five-satellite SAR-Lupe constellation currently in operation.

Musis also is suppose to include  a follow-on Cosmo-Skymed radar satellite program from Italy.

Using monies provided by the French arms procurement agency, DGA, the French space agency, CNES, in June signed a contract with Astrium Satellites to begin work on the French optical portion of Musis, a three-satellite constellation called CSO, or Optical Space Component. The design contract was valued at 66 million euros and includes 17.6 million euros in funding from France’s economic stimulus package.

The three CSO satellites, built to operate for 10 years, are scheduled to be ready for launch by 2015 in the event the Helios 2B satellite fails in orbit or does not exceed its contracted five-year service life.

The French Defense Ministry also will have access to the two Pleiades satellites to be launched in 2010-2011, which have a military and civil/commercial mission and will be part of the global commercial portfolio offered by Spot Image of Toulouse, France. The three CSO satellites will have designs similar to Pleiades.

In addition to these spacecraft, Astrium Services has begun financing, without French government support, development of two medium-resolution optical satellites to replace the Spot 5 satellite.