Solaris Exec Says Plans Won’t Be Affected by ICO Lawsuit

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CANNESFrance — The joint venture company established by satellite fleet operators SES of Luxembourg and Eutelsat of Paris to sell S-band mobile satellite services is not worried that a lawsuit filed by a competitor will slow its ability to secure an operating license or start commercial service, the company’s chief executive said Feb. 5.

Steve Maine, chief executive of Solaris Mobile of DublinIreland, said the legal challenge by ICO Global of Reston, Va., likely will be too slow in moving through European courts to stop Solaris from winning a license this spring and starting operations this summer.

Solaris, a start-up company formed in late 2006, is inaugurating service using the Eutelsat W2A satellite, which is scheduled for launch aboard an International Launch Services Russian Proton rocket in late March.

The W2A spacecraft carries a suite of Ku- and C-band transponders to be used for Eutelsat’s main telecommunications business unrelated to Solaris.

But following the agreement between SES and Eutelsat, the W2A is being fitted with an S-band antenna for the Solaris business. Solaris has been allotted one-third of the satellite’s 11-kilowatt power output.

The 12-meter antenna is being built by Harris Corp. of MelbourneFla., and resembles the antenna deployed aboard the ICO G1 satellite that launched in April 2008 and entered service in January.

The ICO G1 is intended to start ICO’s North American mobile satellite services business, which is targeting in-car live television and both data and video to hand-held devices. Solaris will provide a similar business, but Unrelated to its U.S.
business, ICO has announced plans to start a European operation, using a license it obtained from British and international regulators based on the 2001 launch of what was supposed to be the first of 12 satellites in medium Earth orbit. The remaining satellites were never completed, but ICO has argued that the launch of the first satellite should permit the company to avoid the current S-band license competition organized by the European Commission.

The commission has disagreed, and has treated ICO as a prospective S-band licensee that needs to demonstrate its ability to build an operational system. ICO in October filed a legal action against the commission’s S-band procedure in the European Court of First Instance.

In a Feb. 5 press briefing at satellite manufacturer ThalesAlenia Space’s facilitiy here, Maine said the European Commission, by continuing the S-band licensing process as planned, has demonstrated its determination to complete the licensing selection this year despite the ICO action.

“The commission is not letting this slow things down,” Maine said. “And the fact is that by the time the legal action is resolved in the courts, the commission will already have awarded its licenses.”

The European Commission’s S-band competition is for access to 30 megahertz of S-band spectrum. Solaris Mobile is seeking 15 megahertz, but the W2A is big enough to use 30 megahertz, according to a Solaris Mobile presentation.

The competition’s next phase is scheduled for later this month, when the commission is scheduled to determine whether all four competitors – TerreStar Networks’ European project and London-based Inmarsat‘sEuropaSat also are competing – have made sufficient progress on their satellites to be moved into the final round of competition.

Maine said the procedure is on track to lead to the award of licenses around May. If the selected candidates are demanding a total of more than 30 megahertz of spectrum, a final selection based on financial credibility, satellite coverage and other criteria will be conducted.

Solaris Mobile has no debt. Its founders, SES and Eutelsat, are both cash-rich and have evenly divided a cash injection of 150 million euros ($192 million) into Solaris. All but 20 million euros of the investment has been spent on the S-band antenna and on Solaris’ share of the cost of building, launching and insuring the W2A satellite.

Maine said the company has enough cash to fund its operations until it begins generating revenue. He declined to say when that would be.

Solaris and its competitors are proposing a hybrid satellite-terrestrial system that would employ a network of signal amplifiers deployed around urban canyons, highway tunnels, mountainous areas and other places where the satellite signal cannot reach. Solaris has not secured co-investors willing to finance this signal repeater network, which in Europe is called a Complementary Ground Component. In the United States, the same type of network is called an Ancillary Terrestrial Component, or ATC.

European industry officials estimate that to deploy the Complementary Ground Component in a single large European nation like
GermanyFranceSpain or Italy would cost more than 100 million euros. Some estimates say the cost is at least 200 million euros for a large national territory.

Unlike similar start-up companies in the United States, including ICO, SkyTerra and TerreStar, the European providers are under no obligation to build a ground spare satellite within a year of beginning commercial operations.