Jean-Francois Gambart, President, London Satellite Exchange

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The London Satellite Exchange (LSE) was started in 2000 as a commission-based brokerage matching mainly spot-market buyers and sellers of satellite capacity. It still does that, but its business has expanded well beyond its origins, especially since it was purchased, in transactions in 2006 and 2008, by Astrium Satellites and subsequently moved to Toulouse, France.

LSE now buys satellite capacity, including multiyear contracts, on behalf of Astrium Services and its non-Astrium customers, and has its own 24/7 network operations center in Toulouse. Negotiating on behalf of a larger customer base, the company is able to secure better prices by agreeing to longer-term leases and greater amounts of bandwidth with satellite operators.

The results have been dramatic, as LSE more than doubled revenue between 2007 and 2009.

LSE President Jean-Francois Gambart said the company is not finished growing. Gambart spoke to Space News staff writer Peter B. de Selding about LSE’s new profile.

 

Your revenue has grown sharply in the past three years, from 6.3 million euros in 2007 to a bit more than 16 million in 2009. What has caused this growth and can it continue?

The decisive event was the 2008 purchase by Astrium Services of the 51 percent of LSE that it didn’t already own, after having purchased 49 percent in 2006. Once we became a wholly owned division of Astrium Services, we transformed into a commercial satellite capacity procurement center for Astrium and its Paradigm Secure Services division in Britain, which handles the Skynet 5 services contract. The milsatcom capacity in UHF and X-band also is managed by Astrium Services’ Paradigm unit in Britain.

What that means is that Astrium Services directs its bandwidth needs — aside from the Skynet satellites — to LSE, and we procure it on a competitive basis. It becomes a virtuous circle wherein we use the added demand to secure volume discounts for satellite capacity from commercial operators, which in turn favors further demand.

A second growth driver has been the establishment of our satellite network operations center in Toulouse, which is used by Astrium Services and other customers and is operated as a 24/7 facility for customer support and troubleshooting.

 

Are the volume-related discounts you negotiate with satellite operators available to your non-Astrium customers?

Absolutely. Whether it’s for customers needing just a month or two of capacity totaling just a few megahertz, or someone needing long-term capacity, all our customers have been able to take advantage of the fact that we now are able to lease more capacity for longer periods.

 

What is the percentage of sales from non-Astrium customers?

Our revenue base now is about 90 percent Astrium and 10 percent non-Astrium. Our internal goal is to increase that to 20 percent non-Astrium even as we increase our total revenue by about 30 percent over the next several years. So growth won’t continue at the recent rate, but we are still growing.

 

How much capacity do you have under lease?

The total now is about 400 megahertz leased on 16 satellites, with individual contracts ranging from a couple of megahertz to several transponders — again, excluding the Skynet capacity handled by Paradigm.

 

Do you seek out the lower-cost satellite fleet operators?

Most of our customers are based in Europe and so they want capacity that has a European footprint. That limits us to some of the larger fleet operators that have backup in the event of a problem. So most of our leases are with the biggest operators — SES, Intelsat, Eutelsat and Telesat — but we do have leases with smaller ones, too.

 

Do you mean you lease on a non-pre-emptible basis?

We lease both restorable and non-restorable/non-pre-emptible capacity. We recently witnessed satellite failures and the operators did miracles to minimize service disruptions to their customers at this time of high fill rates on their fleets. It’s all on a best-efforts basis, but no operator wants to lose a customer.

 

Are you leasing in all the commercial bands?

Yes, we use L-band capacity for mobile, and C-band for our Africa teleport service and for some other contracts, but most of our business is in Ku-band.

 

What about Ka-band?

Our military customers ask this a lot: “When is Ka-band coming?” They are pushing us to follow developments here. Our view is that it is indeed coming, but it will not be a substantial part of our market until, say, the middle of the next decade. You need to get the current planned Ka-band satellites in orbit and then develop the ground gear or the liaisons with unmanned aerial vehicles for communications on the move. It will take some time.

 

When a customer comes to you to request capacity — say, 20 megahertz from the
Middle East
to
Europe
— how do you set about searching for what’s available?

We put our BOB database on the case. BOB, or Business on Bandwidth, is our database with around 300 geostationary orbiting satellites and some 14,000 transponders in operation, with their locations and beam and footprint characteristics, teleport services and so on. It’s updated almost daily as new satellites are added, others retired or put into inclined orbit. It allows us to be very reactive. It’s not unusual for us to be able to give a customer an operational link seven days from the time we are approached.

 

You have contracted with Intelsat General to use capacity on the Intelsat 601 satellite in support of the French military’s unmanned aerial vehicles (UAVs) in
Afghanistan
.

Are you able to maintain a video link between the satellite and the UAVs despite the inclined orbit?

This was a case where necessity drove us to the solution we found. On behalf of Astrium Services in France and its end user, the French air force, we were looking for station-kept satellite capacity for the UAVs. There was none available over Afghanistan. The fact is there’s not much satellite capacity over Afghanistan. But Intelsat told us they could move a satellite beam over Iraq to cover Afghanistan, but that the satellite was in inclined orbit.

The problem, of course, is that this is communications on the move. When the UAV banks and its antenna loses sight of the satellite, it has to reacquire the satellite automatically. It’s simple enough when the satellite is station-kept, as its coordinates are loaded into the UAV software. In this case, we told our customer and the manufacturer that they would have to enhance the software so that the UAV antenna would seek the satellite in a different location along this figure-8 path for inclined-orbit satellites.

 

And it works for streaming video?

Yes, this is a several-megabits-per-second continuous link.