Space Systems/Loral Wins $668M Contract To Build 2 Ka-band Satellites for Australia’s NBN

by

PARIS — Australia’s NBN Co. said Feb. 8 it had contracted with Space Systems/Loral to build two high-power Ka-band broadband satellites as part of Australia’s multibillion-dollar program to provide broadband access to its entire population.

The satellite contract alone is valued at about 620 million Australian dollars ($668 million), a figure that does not include the two satellites’ launch or insurance.

In response to Space News inquiries, NBN said Palo Alto, Calif.-based Space Systems/Loral will provide five years of support for tracking, telemetry and control, and in-orbit service support for the satellites’ 15-year service lives.

Space Systems/Loral said price comparisons between the NBN spacecraft and the two large Ka-band satellites, ViaSat-1 and Jupiter, the company built for U.S. consumer broadband providers ViaSat and Hughes — each of which cost around $250 million — are difficult because of the special demands of the Australian project.

“Whereas ViaSat-1 and Jupiter have sought to maximize the capacity within each spot beam and cover only a portion of the U.S., the NBN Co. satellites cover all of Australia with a tailored capacity distribution across the spot beams to match the population density, thereby assuring equitable performance across the subscribers,” Space Systems/Loral said in a Feb. 8 statement.

NBN expects to sign contracts for the satellites’ launches, and for provision of the consumer satellite terminals, in the coming months as part of a total long-term satellite service program budgeted at 2 billion Australian dollars. The launches are scheduled to occur in early 2015 for the first, and latter half of that year for the second.

NBN’s decision to buy two large satellites may complicate the business plan of startup satellite operator NewSat of Southbank, Australia, which is in the process of raising funds to launch its Jabiru-1 and Jabiru-2 broadband satellites. Jabiru-2 is designed to provide Ka-band coverage over Australia.

The contract was awarded less than a week after another Space Systems/Loral customer, ViaSat Inc. of Carlsbad, Calif., sued the satellite manufacturer for patent infringement and breach of contract. The lawsuit alleges that Loral has made unauthorized use of ViaSat intellectual property in other satellites, particularly high-throughput Ka-band satellites like the ones NBN ordered.

The ViaSat lawsuit threatened to destabilize the NBN contract award process, which had already dragged on for two years. Michael B. Targoff, chief executive of Loral Space and Communications of New York, which owns Space Systems/Loral, said in a Feb. 7 interview that Loral was able to reassure NBN that the lawsuit would not undermine Loral’s performance under the contract.

NBN was created by the Australian government to procure and deploy a broadband access service reaching all Australians and up to 22 kilometers of the Australian coast for maritime use.

Most of the project is devoted to installing fiber cable, with terrestrial wireless and satellite coverage completing coverage for Australians living off the terrestrial grid.

Space Systems/Loral President John Celli, in a statement announcing the contract, said the Australian government “has demonstrated visionary thinking in looking to satellite as one of the three chosen technologies to deliver service to every part of the nation.”

U.S. satellite executives have often criticized the U.S. broadband stimulus as viewing satellites as a necessary last resort to assuring universal coverage. Satellite services have received relatively modest amounts of government stimulus aid.

In a statement announcing the contract, NBN Chief Executive Mike Quigley said the satellites will deliver “initial peak speeds” of 12 megabits per second download and 1 megabit per second upload for wholesale customers including Internet service providers for the same monthly price — 24 Australian dollars — as paid by fiber customers.

NBN has contracted with satellite operator SingTel Optus of Australia, and with Thailand’s Thaicom, to provide interim broadband capacity until the all-Ka-band satellites are in service. The interim capacity offers retail customers download speeds of up to 6 megabits per second.

During its two-year evaluation, NBN considered several bid configurations, including one in which ground-infrastructure providers and satellite manufacturers were asked to bid together. The company subsequently decided to separate the bids by segment.

Startup operator NewSat has signed agreements with Europe’s Arianespace launch consortium and with Lockheed Martin Space Systems of Sunnyvale, Calif., for the launch and construction of Jabiru-1. Final contracts are pending completion of a financing package that NewSat has said will include support from the French and U.S. export-credit agencies.

NewSat announced Feb. 3 that Measat of Malaysia, an established and growing satellite fleet operator, had agreed to purchase a minimum of $180 million of capacity on Jabiru-1 over 15 years. This agreement is subject to Measat’s future agreement to lease capacity aboard Jabiru-2, NewSat said. It said that with the Measat agreement, it has signed 526 million Australian dollars in prelaunch commitments for Jabiru-1.

NewSat is designing Jabiru-1 to cover Southeast Asia, the Middle East and North Africa starting in 2014. Jabiru-2 is designed to cover Australia.

“It is business as usual for NewSat and its Jabiru satellite program,” NewSat Vice President Merv Kuek said in a Feb. 9 statement in response to Space News inquiries. “Jabiru-1 is a Ka-band satellite providing coverage over the MENA [Middle East and North Africa] region, targeting enterprise and government customers with ‘raw’ capacity. NBN’s Ka-band satellites provide coverage over Australia, targeting consumers — mums and dads — with consumer broadband services — very different regions and different markets.”