SpaceX loses Falcon Heavy customer Ovzon to Arianespace

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WASHINGTON — Satellite broadband company Ovzon said Aug. 24 that a better offer from Arianespace for a 2021 launch aboard an Ariane 5 prompted it exit an agreement to launch its first fully owned satellite on a SpaceX Falcon Heavy.

Ovzon disclosed the switch to Ariane 5 in an earnings report Aug. 23, saying it had “recently contracted Arianespace to launch our satellite in 2021.” 

“[W]e have thus left the preliminary agreements we had,” Ovzon said. 

In an interview Aug. 24, Ovzon CEO Magnus René told SpaceNews the company received a more appealing launch offer from Arianespace. 

“It’s nothing political or anything like that, it’s not that we don’t trust SpaceX — it’s just that we could get a better deal in cost and time and so on from Ariane at this time,” René said. 

Sweden-based Ovzon announced its Falcon Heavy agreement in October 2018, with former CEO Per Wahlberg describing it as a contract. 

“Contracting the launch supplier of our first Ovzon satellite is an important and exciting step for our company,” Wahlberg said in October. “SpaceX offered a very competitive solution with the Falcon Heavy launch vehicle which will gain us access to space in a timely and reliable manner.”

René, in the interview, said Ovzon’s agreement with SpaceX was tentative, because Ovzon had not secured financing for its first fully owned telecommunications satellite, Ovzon-3. 

Ovzon signed a loan agreement with Proventus Capital Partners in July for $60 million, plus a subordinated loan worth 200 million Swedish krona ($20.8 million). In January the company raised 750 million Swedish krona through a rights issue. 

Ovzon used its financing to cement a manufacturing agreement with Maxar Technologies in July to build Ovzon-3 using a Legion-class satellite platform (formerly called the SSL-500), and to finalize its launch arrangements. René said Ovzon-3 will have a mass of 1,500 kilograms. 

René said Ovzon-3’s Ariane 5 launch is planned for the second half of 2021, and didn’t experience a change in schedule through the switch in vehicles. 

René said Ovzon may return to SpaceX for future missions, since the company envisions having multiple satellites for global coverage. 

“Next time we may use SpaceX … we think they had a very good offer as well, but Ariane’s offer at this time was better,” he said. 

He declined to say what specifically made Arianespace’s offer more appealing than SpaceX’s.

Ovzon currently uses leased capacity from other satellite operators to provide connectivity services. The company signed an agreement with Intelsat in April to use capacity on the Intelsat-39 satellite, which launched Aug. 6 on an Ariane 5. 

Spanish operator Hispasat also has an agreement with Ovzon to jointly offer portable broadband products that use its satellite capacity with Ovzon’s ground technology.

Ovzon reported an after-tax profit of 8.42 million Swedish krona on revenue of 109.3 million Swedish krona for the first six months of 2019. 

Intelsat has a $56 million agreement with Ovzon to use capacity on Ovzon-3 following its launch.