For observers of today’s commercial satellite market, Gene Jilg might be seen as a canary in a coal mine. If critics of satellite operator ownership by private-equity companies are right, it’s people like Jilg who could be among the first to go as part of a broad cost-cutting program.
Technical evaluation teams with Inmarsat’s experience are not common among commercial satellite operators. While the policy has yielded benefits for the London-based mobile satellite services operator — Inmarsat is now 10-for-10 on launches and has never had a major in-orbit failure — such an expense could be a tempting target if private-equity owners decide to reduce costs to the bare minimum.
For the moment, Jilg has enough to think about besides job security.
The first of three Inmarsat 4 satellites was successfully launched by an Atlas 5 rocket on March 11 and the satellite is now going through several months of in-orbit testing.
With a never-before-flown digital signal processor, more than 200 spot beams and plasma-electric propulsion, the satellite is anything but standard. It’s also carrying most of Inmarsat’s future revenue-growth potential.
Jilg talked to Space News staff writer Peter B. de Selding about whether financial investors and satellite operators make a good team.
Inmarsat is owned by two private-equity companies. What’s the difference between this ownership and your previous ownership by telecommunication operators?
Apax and Permira came in after doing a huge degree of due diligence, including some technical due diligence. If you’re asking whether we on the technical team have been pressured to take shortcuts, then the answer is no. So things have not much changed in that respect. What has changed perhaps is the level of financial rigor and focus that may not always have been there.
Inmarsat has been delivering on its commitments to our shareholders. When the purchase was being negotiated, you would have heard me say, “If you don’t want to execute the Inmarsat 4 program, you probably don’t want to buy the company.” I have no sense that they are backing away from the corporate strategy.
Inmarsat has its own in-house expertise to review satellite technology, launcher performance and so on. It’s expensive. Not all operators have this. Does it pay in the end?
It does pay. If you look at the insurance premiums we pay and compare it to others, I think objective observers would conclude we are getting credit from the insurance market. Inmarsat has the best satellite contract-monitoring team in the world. We need to be the best: We are flying L-band satellites and we can’t piggyback on other peoples’ experiences in orbit. A huge amount of our payload is unique.
Intelsat says it will no longer insure its satellites once in orbit, but will rely on in-orbit backup. Is Inmarsat considering such a move?
We ran our fleet without in-orbit insurance for most of Inmarsat’s lifetime and then we changed our practice once we were privatized. So this is something I would recommend we look at.
You are carrying a plasma-electric on-board propulsion system. Does the insurance market consider that to be risky?
Getting the extra in-orbit life gives us a hedge against the possibility that the plasma unit does not work. We have around eight years of satellite life — 80 percent of our nominal insurable life in orbit — even if the plasma doesn’t work at all. The space-insurance underwriters have been burned in the past. They’ve taken some rough hits and it’s understandable that they are cautious about new technology.
Even though Inmarsat has been a great investment for insurers?
It’s true. The underwriters have done well by us. We have never filed a claim and we have paid out 99 percent of our in-orbit satellite performance incentives [annual payments to satellite builders if their products work as expected]. Those are two measures of how our spacecraft have performed. We’ve had some extraordinarily good contractors.
Inmarsat 4 will debut the Broadband Global Area Network, BGAN, a mobile communications system. A trial version, called Regional BGAN, has had limited commercial success. Has it been a technical success?
Yes it has. For BGAN, we are doing infrastructure development that we haven’t done before. I make a conscious effort to move people around our ground infrastructure network to make sure we are getting system integration right. We’re doing a lot of tests using an Inmarsat 3 satellite to emulate an Inmarsat 4. The lessons from this and from Regional BGAN have been extremely valuable. Believe me, I don’t go 10 days without thinking “Thank God for Regional BGAN.”
How confident are you of getting a Sea Launch slot for a liftoff this summer?
Launch manifests are always a work in progress. If Sea Launch is successful in their planned missions scheduled before us, we’ll be there. They have to determine schedules for the Intelsat Americas 8 satellite and they have a Spaceway launch before us as well. So there will be adjustments. There are always these kinds of issues when you reserve launches. We had no guarantee that the Atlas 5 would be there for us exactly when we wanted it. But it was.
And for the third Inmarsat 4?
We’re looking at that question now, and we’ll take a look at what launchers are available and then see where we are.
The launch market features overcapacity, but companies like yours occasionally have to scramble to find a launch. Can you explain that?
Our satellite is a very heavy bird — 5,960 kilograms. That takes us beyond the range that the [Russian] Proton has demonstrated. So we had a special case that reduced the set of launch opportunities we could consider. We are also flying into a super-synchronous orbit.
We expect that this orbit will give us an extra two years of service life compared to a classic geostationary-transfer orbit [GTO]. We originally thought the satellite would weigh in at 6,300 kilograms, in which case we would have been limited to a GTO launch. Since we are lighter, we can take advantage of the rocket’s available power to increase service life. We are targeting more than 16 years of operations.