Neck & Neck Race To Be First in Tracking Ships From Space

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PARIS — Com Dev of Canada and Orbcomm of the United States are racing each other to launch satellites this year to establish position in what both believe will be a large and profitable new business in providing satellite-based ship monitoring for global coastal authorities, with both hoping to be first to market.

Both Cambridge, Ont.-based Com Dev and Orbcomm of Fort Lee, N.J., have faced launch delays on their selected U.S., Russian and Indian rockets that have cost them revenue in the near term. What both are now counting on is that the fresh launch dates in mid-2011 will be respected, allowing them to enter the automatic identification system (AIS) business as soon as possible.

Orbcomm views AIS as a key but not essential element of its machine-to-machine data messaging business. For Com Dev, AIS is the sole reason the company created a new business division, called exactEarth LLC.

The exactEarth subsidiary not only allows satellite equipment maker Com Dev to take advantage of what the company says is its patented AIS technology. It also gives the company a services business whose profit margin is more likely to be 60 percent or better, compared to the satellite-equipment business, whose profit margins are closer to 25 percent.

Com Dev officials have long said their now patented technology for “message de-collision” is superior to what Orbcomm uses. Com Dev’s technology is based on bypassing on-board processing on the satellites in favor of sending down raw message data to ground terminals. These terminals then separate hundreds of thousands of ship messages — up to 1.5 million per day per satellite — and deliver them to coastal authorities.

With International Maritime Organization regulations now mandating that ships weighing more than 300 metric tons carry on-board terminals to beam ship identity, cargo, speed and heading data to the coast, satellite-based AIS requires no special technology added to ship fleets. Instead, it extends what coastal radars now do, permitting coastal authorities to review data on all ships in their region even when the vessels are in mid-ocean.

The U.S. Coast Guard gave Orbcomm an initial contract to test the Orbcomm AIS service, a contract that ended in late 2010 when the last of six AIS-equipped satellites failed in orbit.

Orbcomm has contracted with LuxSpace of Luxembourg to launch two small AIS-equipped spacecraft this year, with the first two of its own second-generation satellites set for launch as piggyback payloads on a Space Exploration Technologies (SpaceX) Falcon 9 rocket also scheduled for launch this year.

Com Dev, which has been using two small satellites in orbit owned by SpaceQuest Ltd. of Fairfax, Va., recently contracted with SpaceQuest for two additional satellites. These are scheduled for launch on a Russian-Ukrainian Dnepr rocket sometime this summer.

The first two of Com Dev’s own AIS satellites, which have a longer in-orbit life, more power and more capacity to digest ship data, are scheduled for launch on Russian and Indian rockets this year as piggyback payloads.

If these launches all occur as planned, Com Dev by this fall will have six satellites in orbit capable of digesting 6 million AIS messages per day, according to Peter Mabson, president of exactEarth.

The Canadian government became exactEarth’s first customer earlier this month with an initial order valued at 1.57 million Canadian dollars ($1.36 million) as part of a contract with options for future orders that could bring its total value to 4.7 million Canadian dollars.

Com Dev and Orbcomm are not alone in seeing a big future business in space-based AIS. Several companies and government agencies in Europe, including the 18-nation European Space Agency, have begun work on their own systems.

But none appears to have invested as much, nor gone as far toward establishing a commercial service, as have Com Dev and Orbcomm.

Orbcomm is equipping all 18 of its second-generation satellites with AIS terminals. After the first two to be launched by SpaceX this year, the company hopes eight more will fly aboard a SpaceX Falcon 9 vehicle nine months later.

Com Dev, which has always said its technology allows for a smaller in-orbit constellation, is negotiating for an AIS payload aboard Canada’s Radarsat Constellation program of radar Earth observation satellites. But the company is keeping its spending on exactEarth to the planned 28 million Canadian dollars, including the most recent contract with SpaceQuest.

In a March 14 conference call with investors, Mabson said Com Dev and exactEarth expect at least one more customer to join the Canadian government this year. Satellite operator Hisdesat of Spain has made an equity investment in exactEarth and is marketing the service in Spanish-speaking countries.

Com Dev Chief Executive Mike Pley said during the conference call that exactEarth has been testing the service with more than 30 prospective customers. Mabson conceded that some of these customers are awaiting the launch of more satellites before making a commitment.

Orbcomm Chief Executive Marc J. Eisenberg said the same thing during Orbcomm’s March 16 conference call.