The French space agency, CNES, expects to begin two new satellite telecommunications projects this year — a civil-military Ka-band system with Italy and an S-band satellite system to deliver video programming to mobile telephones.

With its finances now in order — the agency has paid off its debt and even reported a small net balance for 2005 — and with its budget stable at least through 2010, Europe’s biggest space agency has begun to weigh new investments, CNES President Yannick d’Escatha said.

The CNES budget for 2006, as expected, will total 1.377 billion euros ($1.67 billion). Following a six-year budget commitment by the French government in 2005, the French investment in the European Space Agency (ESA) in 2006 will remain at 685 million euros and stay at that level through 2010.

The CNES national budget, meaning for programs not part of its ESA spending, will be 691.6 million euros in 2006, a 1.5-percent increase over 2005. The same 1.5-percent increase in the national budget is expected to occur each year through 2010.

Presenting CNES’s budget and program priorities here April 3, d’Escatha said CNES is preparing a memorandum of cooperation with the Italian Space Agency on a Ka-band satellite called Athena, to provide two-way broadband communications links to French and Italian military forces.

The Italian Space Agency, in its recently published budget outlook, said the satellite could be launched in 2008. The CNES role would be similar to what the agency does for the French-led Helios optical reconnaissance satellite system, which is financed and operated by French military forces. CNES acts under contract to the French arms procurement agency, DGA, to oversee Helios development.

“Athena is essentially a defense program, even if it is considered a dual-use system,” d’Escatha said. “We expect this program to be launched bilaterally with Italy following initial agreement this year, and the program also could be open to participation by other nations.”

If Athena goes forward, it will be because French and Italian authorities have agreed on how to keep costs down — not only for the satellite, but also for the two-way Ka-band ground terminals to be used with it. Athena signals would not be encrypted to military specifications, and its backers hope to take advantage of developments in the commercial field to keep terminal costs to a minimum.

CNES also is involved in a project to develop an S-band satellite system coupled with ground-based signal boosters to provide video communications to mobile telephones. Stephane Janischewski, CNES director for strategy and programs, said the agency is investing 7 million euros in a demonstration project in Toulouse to prove the business case.

The French Agency for Industrial Innovation (AII), acting on a request from Alcatel of Paris, is expected to decide this spring whether to invest some 25 million euros in helping Alcatel and its partners roll out the terrestrial repeaters needed to assure video links nationwide. AII, created in August 2005, provides cost-sharing financing and low-interest loans to high-technology projects.

“Our relatively modest investment is as far as we go with this,” Janischewski said. “Our role is to help give confidence to prospective private investors in the system.”

CNES’s biggest single financial investment remains launch vehicles. It is the biggest single contributor to ESA’s launcher program, which this year is expected to total some 530 million euros, or 18.3 percent of the ESA budget.

CNES also is investing in launcher-related projects of its own, both to ensure the continued viability of French industry’s rocket -design departments and as part of a long-term cooperative program with Russia.

CNES has agreed to finance rocket-design efforts at Paris-based Safran’s Snecma division, a rocket propulsion firm , with a payment of 35 million euros per year through 2008 that was agreed to in late 2005.

A similar agreement was reached with EADS Space Transportation of Les Mureaux, France, the Ariane 5 vehicle’s prime contractor. EADS Space Transportation was promised a total of 118 million in CNES funding to be paid between 2007 and 2010.

CNES also struck an agreement with satellite prime contractor Alcatel — whose satellite division is being sold to Thales Group of Paris — in which 33 million euros per year between 2006 and 2010 will be invested in flexible satellite payloads including reconfigurable antennas.