SES Expects Decisions This Year on ND Satcom, Solaris

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WASHINGTON — Satellite fleet operator SES expects to resolve performance issues with two of its ventures this year by selling the ND Satcom ground-hardware division and either shutting down or reinvesting in the Solaris Mobile S-band joint venture with Eutelsat, SES Chief Executive Romain Bausch said March 15.

Friedrichshafen, Germany-based ND Satcom, which does about 100 million euros ($136 million) a year in business, is a relatively low-margin operation that SES purchased in the hope that it could steer commercial and European government business to SES’s satellite fleet.

But ND Satcom’s presence drags down SES’s overall profit margin, and SES officials think the operation is no longer generating much business for the SES fleet.

ND Satcom’s biggest contract is with the German defense forces as part of a joint venture with Astrium Services of Europe called MilSat Services GmbH, in which ND Satcom has a 25.1 percent stake. MilSat Services is under contract to deliver into orbit two military telecommunications satellites. ComsatBw-1 was launched in October, and ComsatBw-2 is scheduled for launch in late March.

Once the potential liability surrounding the second satellite’s launch and early in-orbit checkout is passed, ND Satcom’s value is likely to increase, making it easier to sell.

Speaking with reporters, Bausch said Astrium Services is one potential ND Satcom buyer but not the only one with which SES has been having discussions. “There is a sound competition between them [Astrium Services] and others,” Bausch said. “Astrium is not the only one.”

Dublin, Ireland-based Solaris Mobile, meanwhile, has been struggling to create a market in Europe for two-way mobile communications using an S-band license it won from the European Commission and a satellite equipped with a large S-band antenna launched in April 2009. But for reasons not yet clear, the antenna proved defective during its deployment and will not permit Solaris to meet the requirements of its license in terms of coverage or power.

Luxembourg-based SES and Paris-based Eutelsat have been weighing how to move forward on the 50-50 joint venture ever since.

Bausch said Solaris has reduced its cash burn by cutting staff to just four or five people while seeking potential partners to roll out an S-band business. It has enough cash to operate to the end of the year, Bausch said, by which time SES and Eutelsat will decide whether to shut down the venture or pursue one of several options for a replacement satellite.

One option, Bausch said, is for Solaris to merge with London-based Inmarsat’s competing S-band project, called Europasat, whose satellite is not yet under construction. A second option is to build another S-band antenna as a piggyback payload on another satellite. Also being investigated is whether either of the two struggling S-band satellite companies in the United States — TerreStar and DBSD North America, both of which have satellites in orbit — would be willing to sell their spacecraft.