03b satellites
First-generation O3b satellites. Credit: ESA/CNES/Arianespace/Photo Optique Video du CSG/P. Piron

PARIS — Satellite builder Thales Alenia Space on Dec. 10 said it had contracted with satellite broadband provider O3b Networks to build eight additional O3b medium-Earth-orbit satellites, a move that will bring the O3b constellation to 20 spacecraft by mid-2018.

The value of the contract was not disclosed. But O3b, based in Britain’s Channel Islands, announced separately Dec. 10 that it had raised $460 million in “incremental financing” to pay for the new satellites. The satellite contract alone carries an estimated value of between $350 million and $400 million, according to industry estimates.

O3b had filed a $300 million insurance claim in 2014 following a power defect on the first four satellites, launched in June 2013. The subsequent satellites were launched in July and December 2014.

Martin Van Schaik, Thales Alenia Space senior vice president for sales, said the satellites, like the previous 12, would be launched in groups of four aboard Europeanized Russian Soyuz rockets from Europe’s Guiana Space Center in French Guiana, with the first four to be launched in late 2017 and the second batch launched in early 2018.

O3b did not immediately respond to questions about whether the company had in fact already signed contracts for the Soyuz launches.

The satellite contract, which had been expected, is for spacecraft to operate in the same 8,000-kilometer equatorial orbit as the current Ka-band constellation, said Bertrand Maureau, director of telecommunications at Thales Alenia Space.

But the new batch will include higher-level encryption that will require about 20 percent more power per satellite, he said. Besides this and what he called a minor refinement of the antennas, the satellites are identical to the previous 12, he said.

O3b has said that attracting business from the U.S. Defense Department and other militaries is a company priority, as is the market for offshore energy exploration and production.

O3b Chief Executive Steve Collar said in a statement that the new satellites “will ensure that we have enough capacity to service the demand.” The company had reported a backlog of $530 million as of June 30.

Steve Collar. Credit: 03b
O3b Chief Executive Steve Collar said in a statement that the new satellites “will ensure that we have enough capacity to service the demand.” Credit: 03b

Satellite fleet operator SES of Luxembourg is a 45 percent shareholder in O3b. SES said it participated in the $460 million financing round, but declined to say whether the latest financing resulted in SES’s increasing its percentage ownership. SES has said it was likely to take control of O3b sometime in 2016 given the growth of O3b’s customer backlog and near-term business prospects.

SES had forecast that O3b would be generating $100 million in annualized revenue by late 2015, with the ultimate goal of each satellite producing up to $35 million per year in revenue by 2018.

Thales Alenia Space also is prime contractor for the Iridium Next constellation of 81 mobile communications satellites, 72 of which are scheduled for launch between March 2016 and late 2017.

Maureau said the Iridium Next and O3b supply chains have some overlap but not much, and that the addition of eight new O3b spacecraft will not put a strain on the prime contractor or its suppliers. The Iridium satellites undergo final assembly, integration and testing in the United States, whereas the O3b satellites are fully built and assembled in Europe.

The 12 satellites in orbit have 190 gigabits of total throughput. The constellation’s design — made by the same people who are now designing the Ku-band OneWeb constellation of 720 low-orbiting broadband satellites — allows O3b to add satellites as it sees fit once the first six are in operation and providing initial service.

In addition to adding total capacity to the network, designed to provide broadband data communications between 40-45 degrees north and 40-45 degrees south of the equator, each new satellite addition will reduce the amount of movement required by O3b customers’ ground antennas for uninterrupted communications links.

O3b entered commercial service in September 2014. The company said it now has 40 customers, including telecommunications network operators in the Pacific Islands and leisure cruise operator Royal Caribbean, which has made a key selling point the fact that it can offer broadband to its passengers.

Peter B. de Selding was the Paris bureau chief for SpaceNews.