Strong Market for Smaller Satellites Spurs New Competition

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PARIS — Renewed demand for satellites weighing less than 2,500 kilograms at launch is forcing several established satellite manufacturers to rethink their product line and, when necessary, to strike deals with lower-cost partners in order to remain active at this end of the market.

No longer content to let Orbital Sciences Corp. (OSC) of Dulles, Va., have this niche business all to itself, three large-satellite manufacturers have repositioned themselves to give OSC a run for its money.

Six of the 19 new commercial telecommunications satellites ordered in 2005 were for spacecraft weighing less than 2,500 kilograms. Industry officials say the logic of small satellites will remain compelling in the coming years.

Lockheed Martin Commercial Space Systems of Newtown, Pa., in 2005 demonstrated its ability to slim down its principal product, the A2100 satellite frame, to confront OSC on its home turf.

Lockheed Martin won two of the six small-satellite contracts booked commercially in 2005 — the BSAT-3a spacecraft for Broadcasting Satellite System Corp. of Japan and the AMC-18 for SES Global’s SES Americom division in Princeton, N.J. OSC took home the other four, for U.S., Japanese, Norwegian and Malaysian customers.

Ali E. Atia, president of Orbital Communications International, OSC’s satellite manufacturing division, said his company faces more and more competition with each new bid.

That is likely to be true in 2006 as Euro-Indian and Euro-Russian joint ventures also try to enter this end of the market.

EADS Astrium of Europe in mid-2005 announced a partnership in commercial satellites with Antrix Corp. , the Indian Space Research Organi sation’s commercial arm. EADS Astrium, one of Europe’s two main satellite prime contractors, will provide the payload electronics, to be mounted on an Antrix-built skeletal frame.

The Astrium-Antrix venture recently booked its first order in deal with satellite operator Eutelsat SA of Paris. The contract is expected to be signed during a French-Indian summit in late February.

Antrix is leading bids made for customers in most of South Asia, while EADS Astrium will be the lead player for satellites in the rest of the world.

Antrix Executive Director K.R. Sridhara Murthi said Antrix views the accord as a way of presenting itself to the global commercial satellite market. Up to now the company has built satellites for Indian domestic use only. Murthi said the organization now is aiming for the global market.

Murthi said Antrix expects to co-build two or three satellites with EADS Astrium each year.

Bruno Le Stradic, director of telecommunications satellites for EADS Astrium, the joint venture is the best way to address a market segment that his company cannot afford to ignore.

“It would not be efficient for use to maintain a ‘light’ version of our Eurostar satellite platform line as it would have required capital investment whose return would be doubtful,” Le Stradic said. “But we cannot simply abandon this end of the market. Look at Lockheed Martin’s BSAT win: This is a market that has generated lots of interest. A manufacturer today cannot be absent from a market segment like this.”

Le Stradic said it is clear that the Indian government has decided to make space technology a strategic priority, and that Antrix will be increasing its market presence in the coming years. Rather than invest in plant and equipment to compete with India, a partnership was the best option.

EADS Astrium officials said the joint venture with Antrix will not be making bids for future Indian domestic telecommunications satellites as this remains reserved for India’s domestic industry.

Alcatel Alenia Space of France and Italy has a long-standing relationship with Russia’s NPO-PM satellite manufacturer. The two companies have jointly built nine satellites, but almost all have been for Russia’s domestic market. The lone exception was a satellite built for satellite-fleet operator Eutelsat S.A. of Paris, which ordered the Alcatel Alenia-NPO-PM Sesat-1 satellite as part of its eastward expansion into Russia and Central Asia.

Patrick Fournier, executive vice president for operations at Alcatel Alenia Space, said the NPO-PM partnership remains focused mainly on the Russian market. NPO-PM’s satellite platform also is designed exclusively to be launched by Russia’s Proton rocket, making international sales more difficult.

Fournier said Alcatel Alenia, which has major cooperative agreements in commercial programs with competitors EADS Astrium, Boeing Satellite Systems International and Space Systems/Loral, will continue to seek teaming arrangements where possible. Most recently, the company was selected by Israel Aircraft Industries (IAI) to build the platform for Israel’s Amos-3 telecommunications satellite. IAI will provide the satellite platform.

Space News correspondent J.S. Jayaraman contributed to this article from New Delhi.

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