PARIS — Firm contracts for the construction of commercial telecommunications satellites remained historically low in 2012, with just 16 satellites booked compared with the 17 booked in 2011.
The tally is substantially lower than most industry forecasts, and some officials say several expected orders from customers with the requisite financial backing were simply delayed from late 2012 and will be signed in the early months of 2013.
Counting satellites unit by unit has always been an imperfect measure of the health of the industry in any given year. As more satellites outlive their contracted 15-year design life, there will be a slight dip in the average number of satellite units purchased in a given year from the larger fleet operators.
Just as important is the number of active transponders, and how much power they have. One EchoStar 17/Jupiter-1 Ka-band broadband satellite is equivalent — by some measures — to several standard-issue C- or Ku-band spacecraft.
It has always been the case that the availability of commercial-launch vehicles has fixed the boundaries of what satellite builders create and what fleet operators purchase. Several operators say they will not consider going beyond around 6,500 kilograms in launch weight for a satellite because that is the limit of what can be launched by at least two commercial vehicles.
A Jolt of Electricity
But 2012 was exceptional for the fact that one-quarter of the commercial geostationary-orbit telecommunications satellites ordered in 2012 were part of arrangements in which a specific launch vehicle was instrumental.
Asia Broadcast Satellite (ABS) of Hong Kong and Satmex of Mexico both said the price and availability of the Space Exploration Technologies (SpaceX) Falcon 9 rocket was an enabler of the four-satellite contract — two for each of them — with Boeing Space & Intelligence Systems of El Segundo, Calif.
Boeing’s new 702 SP all-electric design, which replaces chemical propulsion not only for in-orbit station keeping but also for initial orbit-raising, reduces a satellite’s weight by several hundred kilograms and allows two such spacecraft to share a spot under the Falcon 9 fairing.
Boeing’s contract with ABS and Satmex, announced in March, has to rank as the most notable development in the commercial satellite industry in 2012. Boeing was not able to convert that initial order into immediate sales to other operators, but the major fleets are all considering the all-electric design.
Late in the year, SES of Luxembourg entered a partnership with the 20-nation European Space Agency (ESA) to purchase an all-electric satellite, with final contract details to be worked out in 2013. ESA governments in November agreed to start an all-electric-satellite development program in direct response to the Boeing announcement.
League Expansion
The list of nations buying their own telecommunications satellites grew again in 2012 as has regularly been the case in recent years. Last year it was the Democratic Republic of Congo that joined the group including Nigeria, Venezuela, Kazakhstan, Belarus, Ukraine and Azerbaijan, among others.
As has been the case before, Congo’s entry was facilitated by the Chinese government and China Great Wall Industry Corp., which offered a bundled package including the construction and launch of a satellite.
U.S. President Barack Obama in January signed into law a relaxation of certain satellite technology-export rules that should make it easier for U.S. satellite component providers to sell equipment overseas, and for non-U.S. satellite prime contractors using certain U.S.-built components to generate export sales.
How much effect this will have on who wins what business is unclear, but industry officials are hopeful that, at the very least, the new regulations, once published, will reduce the amount of paperwork involved in a commercial sale to a U.S. ally.
The three biggest satellite fleet operators — Intelsat of Luxembourg and Washington, SES of Luxembourg and Eutelsat of Paris — are heading toward reduced capital spending. One of the biggest questions for the satellite manufacturing sector is whether the reduced orders from these three in the next five years compared with the last five years will be matched by increased orders from developing nations.
It is here that the ongoing activity of the U.S. Export-Import Bank and its French equivalent, Coface, will be key to determining whether developing nations play the China card to enter the telecommunications business or turn to Europe or the United States. The Ex-Im Bank has estimated that it invested $1.4 billion in 2012 to finance satellite projects employing U.S. contractors.
China’s export-credit agency has also been busy backing satellite projects, and Russian officials have said their government also wants to be more active in financing satellite exports.
