Inmarsat details GX expansion, OneSat satellite orders

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This article originally appeared in the June 10, 2019 issue of SpaceNews magazine.

Inmarsat’s purchase of three high-capacity Ka-band satellites from Airbus Defence and Space at the end of May is the largest satellite order industrywide since SES ordered seven medium-Earth orbit O3b mPower broadband satellites a year and a half ago.

The order showcases Inmarsat’s confidence in continuing to invest in geostationary orbit — a notable commitment given the industrywide debate over the optimal orbits for broadband services.

Inmarsat’s strategy, as evidenced by its GX Flex order, is to blanket the world with geostationary capacity, and then layer on additional capacity with more and more GEO satellites. The company says each GX Flex satellite will have 10 times more capacity than all the Global Xpress satellites already in space.

Inmarsat Chief Technology Officer Peter Hadinger said GX Flex, the company’s seventh-generation satellites also known as Inmarsat-7s, will give Inmarsat much greater “flexibility” in providing coverage.

Inmarsat CEO Rupert Pearce, left, and Nicolas Chamussy of Airbus Defence and Space sign a three-satellite GX Flex contract in May. Credit: Inmarsat

The company’s first four Global Xpress satellites, Boeing-built spacecraft launched between 2013 and 2017, each have 89 fixed beams and just six steerable beams to respond to changing customer demand. With the reprogrammable GX Flex satellites, Inmarsat will be “standing up and tearing down beams literally every second of the day as someone fires up a terminal or sails into a new area,” he said.

Inmarsat could still adopt multiple orbits. The company’s $3.3 billion buyout from a consortium of private equity and pension firms known as Bidco could provide cover for a big move into lower orbits. Under the buyout, expected to close in the fourth quarter of 2019, Inmarsat shares would stop trading on the London Stock Exchange, giving Bidco the power to make bold bets with Inmarsat without tipping its hand to competitors via the disclosures required of publicly traded companies.

“The talk of the town is megaconstellations, and this acquisition could provide a new strategic dimension to Inmarsat,” Siddharth Shihora, an associate for PwC’s space practice, said by email. “The possibility that Bidco (Inmarsat) may want to create a LEO/GEO synergy may also be on the horizon. The possibilities for Inmarsat collaborating/ partnering with one of the LEO players now seems to be high.”

If Inmarsat has a megaconstellation ace up its sleeve, the company’s CTO is not saying. But he points out that Inmarsat’s latest satellite order will take advantage of some of the work Airbus has done gearing up to build OneWeb’s 648-satellite constellation.

Inmarsat has 13 satellites in geostationary orbit, the latest four of which are Global Xpress. Three more are set to launch before the Inmarsat-7s: a fifth-generation Global Xpress satellite from Thales Alenia Space will launch this year on an Ariane 5 rocket, and the first of two sixth-generation satellites ordered from Airbus in late 2015 is slated to launch in 2020 on Japan’s H2A rocket. The second Inmarsat-6 satellite will launch aboard a still-to-be-chosen launcher in 2021. Both Inmarsat-6 satellites have Ka-band payloads that are part of Global Xpress, plus L-band payloads for the kind of highly reliable, narrowband communications Inmarsat has long provided to far-flung customers.

Barring delays, Inmarsat will have 10 Global Xpress satellites orbiting by 2023. The company is positioned to rapidly procure additional satellites through options built into its latest contract with Airbus.

Hadinger spoke with SpaceNews about Inmarsat’s recent satellite orders and future plans.

What was the procurement process for the first three Inmarsat-7 satellites?

The whole industry has been working on these next-generation technologies for satellites for some time now. We began almost two years ago with manufacturers. We worked with all the leading manufacturers on what the next generation of technology was, and then about a year ago began to down select through a series of RFPs and RFIs to a smaller group based on their abilities, costs and delivery schedules. Ultimately, we ended up in a final round that just concluded within the last couple of weeks. It was not an easy choice in the end.

How much do the Inmarsat-7 satellites cost?

They are substantially cheaper than satellites we’ve had in the past, but the specific numbers are competitively sensitive. Suffice it to say, this was an attractive opportunity because we anticipate needing a number of spacecraft over time and we want to make sure we have something that is going to be cost effective in the long run.

Does this contract position Airbus as your preferred supplier for future Global Xpress satellites, particularly using Airbus’ new OneSat spacecraft bus?

It’s certainly one where we have all the options in place now through this contract to exercise on very short-term cycles a deal with Airbus. It doesn’t mean we won’t consider other offers, but we are committing to a partnership with Airbus to try to get this product line to not only be as good as it can now, but to be as extensible as it can be into the future.

Inmarsat controls its constellation of 13 satellites from its network operations center in London. Three more Global Xpress satellites are set to launch before the just-ordered GX Flex satellites are orbited. Credit: Inmarsat

When we do something as a company, our strategy is to go ‘global first.’ We did that in L-band, we have done that [in Ka-band] with Global Xpress, and with the Inmarsat-7 series we are going to go ‘global first’ again. That means buying three satellites. You can see even with the first GX satellites we followed that with a fourth for additional capacity and resilience to the network. We have every expectation that we will be getting more of these spacecraft going forward. It’s great because we can take in an airline customer, for example, and in the same time frame it would take for them to equip a fleet of aircraft, we can have a new batch of capacity in their primary operating region already in the pipeline to support them.

How many options does the contract have?

It’s pretty open ended. We have the ability to buy lots of these spacecraft.

We are looking forward to when the industry has a number of similar spacecraft so that, from a launch perspective, we can have diverse sharing opportunities as well.

Was Bidco influential in the decision to procure these satellites?

We briefed them during the due diligence on all of this because it was a pretty significant piece of not only our investment profile for the next number of years, but of our real plans and market for revenue growth.

In due diligence, you spend a considerable amount of time with lawyers, bankers and hired-gun specialists who come in and scrub every aspect of your business all the way down to the bare metal. In doing so, every question is “why?”

After having gone through that process, you build back up from the fundamentals of your faith why it is you think your business and your specific approach to the business withstands the onslaught of competition, the changes in the market, all the things that could derail you. When we got done with that process, one of the most gratifying things to me was they bought into it.

These satellites leverage investments from the French and British space agencies. Eutelsat said something similar about their reconfigurable satellite Eutelsat Quantum. Will your satellites use technology originally developed for Eutelsat Quantum?

Certainly the investments that each of these governments made, largely through the collective efforts of the European Space Agency, have gone into funding the broader European competitive advantage in building satellites. It’s been great for us to take advantage of that. In addition, we also benefited from the work done in developing constellations of LEOs. Regardless of whether you think they will be successful from a business standpoint, there’s been a tremendous amount of work done, for example at Airbus with the OneWeb constellation that has resulted in improvements in cycle time and cost efficiency in producing satellites. We are taking advantage of those technology investments as well.

Clearly there was some experience that was gained from the ESA work on Quantum, but I can tell you that the processing capabilities are brand-new on this generation, as is most of the antenna technology. Airbus has a long history of building programmable satellites for the U.K. Ministry of Defence in the form of Skynet, so there are a lot of different threads that come together to make something like this.