Maxar to compensate Echostar for Jupiter 3 delays

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TAMPA, Fla. — Echostar said Nov. 22 that Maxar Technologies is providing compensation for production issues that have delayed the launch of its Jupiter 3 satellite to at least the first half of 2023.

The satellite operator said Maxar is “providing relief on future payments” under an amended contract, which also “expands EchoStar’s recourse” if there are more delays for a satellite originally slated to launch in 2021.

In a regulatory filing, Maxar said it had informed the operator Nov. 9 that the delivery of Jupiter 3 had been delayed another month to April 27. 

Maxar is waiving all remaining milestone payments that Echostar owed the manufacturer related to Jupiter-3. The relief includes about $14 million in payments connected to raising Jupiter 3 to its orbital position following launch, and $44.5 million — plus 6% interest — in deferred incentive payments that were conditioned on the satellite’s in-orbit performance.

Maxar would also need to start paying Echostar damages for every month Jupiter 3 is not delivered after the first half of 2023, totaling $21 million if the satellite is ultimately delivered in September, and then $10 million for every additional month of delay.

The updated contract also gives Echostar the right to terminate their agreement from January 2024 and receive more compensation if the satellite has still not been delivered by then.

Separately, Echostar said it has entered into an agreement to provide Maxar with “certain products and/or services during 2023” in exchange for payments that would deliver a margin of at least $30 million.

Echostar recently said capacity constraints contributed to a 1.4% year-on-year fall in revenues for the three months to the end of September to just shy of $500 million.

Jupiter 3 is due to provide around 500 gigabit-per-second of capacity over North and South America — more than double the capacity of Jupiter 2 that launched in 2017.

EchoStar ordered Jupiter 3 from Maxar in 2017 as part of a $445 million contract, and the satellite has lined up a launch on a SpaceX Falcon Heavy.

However, production has been bogged down by pandemic-related supply chain issues that have also slowed other manufacturers of satellites bound for geostationary orbit.

Jupiter 3 is currently undergoing final integration in preparation for performance tests that need to be completed before it is shipped to the launchpad.