MDA Eyes Role as Telecom Satellite Prime Contractor

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KOUROU, French Guiana — Satellite component manufacturer MacDonald, Dettwiler & Associates Ltd. (MDA) of Canada wants to move up the food chain to produce complete commercial telecommunications satellites and is targeting opportunities among Central Asian nations that were once part of the Soviet Union, MDA Chief Executive Dan Friedman said Oct. 28.

“All of the ex-Russian states are in a procurement process for satellites. It’s a big opportunity for us and we’re bidding there,” Friedman said in a conference call with investors on Richmond, British Columbia-based MDA’s financial results. “We’ve been winning pieces of communications satellites … on other people’s satellites. As we go forward, we see opportunities to sell complete satellites. We’re putting our own communications payload on it, which increases our value added and our margins.”

Friedman did not name any specific satellite contract competitions, but MDA apparently is the preferred bidder for a satellite planned by the government of Ukraine. The National Space Agency of Ukraine has gone so far as to say MDA has won a contract for a satellite to be located at 38.2 degrees east longitude and carry 16 Ku- and four Ka-band transponders.

The space agency said in September that Canada’s export-credit agency, Export Development Canada (EDC), had agreed to back a 10-year, $254.6 million loan to finance the satellite’s construction and launch aboard a Russian-Ukrainian Land Launch vehicle from the Baikonur Cosmodrome in Kazakhstan.

An official from EDC acknowledged the agency has opened discussions of potential financing schemes for the satellite with the Ukrainian government, but said no agreement had been reached.

MDA has demonstrated an ability to manage development of Earth observation satellite systems including Canada’s Radarsat and Radarsat-2 craft as well as the five-satellite RapidEye commercial optical Earth observation system for RapidEye of Germany. Both projects included Canadian government backing.

MDA’s push into a prime contractor’s role for mid-size telecommunications satellites mirrors the efforts of Ontario-based Com Dev, which provides electronics gear for many telecommunications satellite prime contractors, to inaugurate its own line of small satellites for a variety of commercial and government missions.

Both companies are leveraging work done for the Canadian government, which has proposed an increase in space spending as one way to keep Canadian companies viable in the global commercial space market.

Canadian government authorities in 2008 blocked the sale of MDA’s space business to Alliant Techsystems Inc. of the United States, a decision that Freidman said at the time should cause the Canadian government to re-evaluate its space posture and increase its space budget.

Since then, the Canadian Space Agency has proposed a long-term budget increase. An indication of whether an increase will be put into place will be delivered in February when the government’s budget is approved.

“The long-term plan is to move the [space] budget so that we are not at the level of a banana republic,” Friedman said during the conference call. “We would join the G8 [the Group of Eight industrial nations] in terms of space expenditure. If the government goes forward, and there has been no decision yet, it would increase expenditures to something workable as a percent of” Canada’s gross domestic product, he said.

One big future contract MDA hopes will arrive with the new budget is the Radarsat Constellation Mission, a three-satellite successor to Radarsat-2 for maritime surveillance, disaster management and environmental monitoring.

MDA is working on a Radarsat Constellation Mission design under a contract that ends in February. Friedman said he is hopeful that the Canadian Space Agency will award the follow-on contract, for actual hardware development, in time to avoid a gap in MDA’s work on the project.