Spacecom back on the market after Xinwei talks fizzle out

by

WASHINGTON — The owners of satellite operator Spacecom have reopened their search for someone to buy the Israeli company after a month of trying without success to rekindle the interest of a once-eager Chinese suitor.

Eurocom Group, Spacecom’s Israeli owners, had reached an agreement last August with Beijing Xinwei Technology Group, a Chinese conglomerate that intended to purchase Spacecom through a newly created Luxembourgian entity called Luxembourg Space Telecommunication. The deal hinged on the successful launch of a large Ka- and Ku-band satellite that had Facebook as an anchor customer. When the satellite, Amos-6, was destroyed last September because its SpaceX Falcon 9 launcher exploded during a routine pre-launch fueling test, both the Facebook deal and Xinwei’s interest went up in smoke.

Spacecom said late last year it hadn’t given up on bringing Xinwei back to the table. Now, it appears, the company is ready to move on.

“At the moment there are no talks with Xinwei,” Jacob Keret, Spacecom’s senior vice president of sales and marketing for Europe, North Africa and the Middle East, told SpaceNews.

Keret said Spacecom has grown accustomed with operating with a “For Sale” sign out front and doesn’t let it affect the way it does business. “The shareholders are still looking for a buyer. This has been done for the last three years. It doesn’t affect us on a daily basis as a company. We get used to this uncertainty.”

As evidence, Spacecom is designing a replacement for Amos-6 and plans to seek bids from builders this year.

“This will be done during the next quarter or two in order to be ready to place it in orbit in 2020,” he said.

Spacecom borrowed AsiaSat-8 from Hong Kong-based fleet operator AsiaSat in December to temporarily fill the void left by Amos-6. Since rebranded as Amos-7, Spacecom has reloaded customers from the deorbited Amos-2 onto the loaner satellite. Spacecom has a four-year contract with AsiaSat for the satellite, with the option of a one-year extension, but Keret said Spacecom would prefer not to use the extra time, making a 2020 build-deadline a high criterion for bidders.

“We are aiming to give back the Amos-7 satellite to AsiaSat at the end of 2020. This leaves us from today, three and a half years, which is enough time to choose almost any manufacturer. The price of the platform will be a major part of that. Each year that we are leasing the satellite for AsiaSat we have to pay $22 million, and our intention is not to use the fifth year … if one manufacturer will take 36 or 40 months, this has to be taken into consideration.”

Israel Aerospace Industries, the state-owned company that built Amos-6, and Boeing, Spacecom’s pick to build the Amos-5 replacement Amos-17, are top contenders vying to build Amos-8, he said.

Keret said Amos-8 will likely be smaller than the 5,500-kilogram Amos-6, and will focus on the Middle East and Europe. The satellite might have steerable beams and high throughput capacity, but neither of those features have been decided on yet, he said.

Amos-17, a tri-band satellite from Boeing slated to launch in 2019, will cover Europe, the Middle East and Africa with high-throughput capacity in C-, Ku- and Ka-band. Keret said Spacecom will chose a launch provider by the end of this year. He declined to say whether SpaceX would offer a free launch as compensation for the loss of Amos-6.

Facebook? It’s complicated

Keret said Spacecom is still talking with Facebook about future business together, albeit not a reconstruction of the 2015 deal arranged through Eutelsat. After Amos-6, Eutelsat procured Ka-band capacity on Yahsat’s upcoming Al Yah 3 satellite, making progress on its Africa-focused connectivity program Konnect Africa without Facebook.

“With Amos-17, this might be some opportunity for us and for [Facebook], but it’s yet to come. That’s in two years, and many things can change in two years, but yes absolutely we are still talking with them and they are talking with us. There are no hard feelings,” he said.

Keret said Spacecom is planning an increased presence in mobility markets — namely in-flight connectivity, but also maritime — with satellites like Amos-17. Television channels upgrading from standard definition to high definition, which requires more satellite bandwidth, is also driving new revenue, he said.

Keret said Spacecom’s Amos-4 satellite at 65 degrees east is split 50-50 between broadcast and government customers. Spacecom’s other two satellites located at 4 degrees west — Amos-3 and Amos-7 — are split roughly 80 percent broadcast, and 20 percent connectivity for data, government and VSAT networks, he said.