Orbital Sciences Designing New Commercial Satellite

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PARIS – Orbital Sciences Corp. is investing in a higher-power version of its geostationary communications satellite product, a decision that will result in several money-losing quarters for that division but will pay off in new commercial satellite orders, said David W. Thompson, the firm’s chairman.

Thompson said Orbital Sciences, which has won one commercial telecommunications satellite order this year, has made proposals for two other contracts. The winners of those contracts are expected to be announced by autumn. Thompson declined to name them. He said the company plans to bid on at least three more geostationary satellite contracts this year, an indication that even large satellite-fleet operators are willing to consider Orbital Sciences’ smaller Star satellites alongside other companies’ much bigger products, he said.

“More of the mainline operators are incorporating smaller satellites of our class into their fleets,” Thompson said during an April 21 conference call on the company’s first quarter financial results.

Many operators are reporting stagnant sales, and some of their satellites are operating at fill rates of less than 75 percent. In addition, several satellite operators have taken on substantial debt, making them hesitant to make capital expenditures. But these companies also must replace existing capacity to keep current customers, and also to keep their orbital-slots.

Thompson said Orbital Sciences’ Star platform — one-third the size or less of the current offerings of major U.S. and European manufacturers — permits companies to keep their orbital positions while spending much less for the satellite, its launch and its insurance. Satellite operators in recent years have said that while adding incremental capacity is attractive, they need a minimum amount of power generated on board their spacecraft, regardless of the number of transponders.

Thompson said Orbital Sciences is using its two-satellite contract with Optus Networks Pty Ltd. of Australia to design a higher-power platform with up to five kilowatts of on-board power. Both Optus satellites will weigh between 2,300 and 2,500 kilograms at launch.

With Boeing Satellite Systems International’s decision to retire its Boeing 376 satellite platform — lack of on-board power was one reason — Orbital Sciences has the small-satellite market to itself. Lockheed Martin’s modular A2100 satellite has nonetheless been able to compete with Orbital Sciences, most recently winning a one-satellite order from Orbital customer Broadcast Satellite System Corp. of Japan.

The investment in a higher-power Star platform pushed Orbital’s commercial satellite division into the red for the quarter ending March 31, a situation Thompson said would continue only for another couple of quarters. He said an order from PanAmSat for the PAS-11 satellite is the first contract demonstrating that the Optus-linked investment is paying off.

PanAmSat has previously ordered Orbital satellites and has also used the smaller size to save on launch costs.

The next PanAmSat launch, scheduled for June, will be the Galaxy 14 spacecraft orbited by Russia’s Soyuz rocket from the Russian-run Baikonur Cosmodrome in Kazakhstan. The satellite is expected to weigh around 1,800 kilograms at launch. A larger satellite would not have been able to use the Soyuz.

“Our arsenal is going to be a bit stronger as we compete for future orders over the next year or two,” Thompson said, adding that the first of the two Optus satellites is scheduled to be shipped by the end of the year.