LONDON — Satellite messaging service provider Orbcomm said its second-generation satellites will not be ready before next spring, several months later than planned, with the first two spacecraft to launch as piggyback passengers on a largeFalcon 9 rocket, and not the smaller Falcon 1 as originally intended.
Orbcomm, in a contract-change notice given to satellite manufacturer Sierra Nevada Corp. (SNC), said it has dropped the requirement that the satellites be compatible with Russian, Indian and other U.S. rockets, which had been viewed as backup alternatives. The 18 second-generation satellites are now entirely in the hands of Space Exploration Technologies (SpaceX), a startup launch services provider based in Hawthorne, Calif.
The decision to launch the first batch of Orbcomm’s second-generation satellites on a Falcon 9, and to incur the $4 million in charges to make the satellites compatible with that vehicle, are detailed in a Nov. 9 Orbcomm filing with the U.S. Securities and Exchange Commission (SEC).
In a Nov. 11 e-mail, Orbcomm Chief Executive Marc Eisenberg declined to say how far behind schedule SNC is in Orbcomm satellite production. He said part of the delay was caused by the need to make the satellites compatible with Falcon 9, a vehicle he said provided a less-expensive, lower-risk alternative to Falcon 1 for the first two satellites.
Eisenberg said the 16 remaining Orbcomm satellites are scheduled for launch by SpaceX, on Falcon 1 or Falcon 9 rockets, at intervals of between six and nine months.
SpaceX is under a $46.6 million contract to launch the 18-satellite second-generation Orbcomm constellation. Orbcomm currently operates 28 satellites in low Earth orbit.
The first two second-generation satellites will be launched aboard a Falcon 9 scheduled to make the second demonstration launch of SpaceX’s Dragon unmanned freighter as a precursor to a multilaunch NASA contract to supply the international space station. The first Dragon launch has suffered repeated delays and is now tentatively set for December.
In a Nov. 9 conference call with investors, Eisenberg said the manufacturing delay at Sparks, Nev.-based SNC does not appear to be severe enough to place into question the readiness of a first batch of satellites to make a Falcon 9 launch, now scheduled for between April and June 2011.
For a Falcon 1 launch, Orbcomm likely would be the primary passenger, meaning the rocket waits for the satellites. For the Falcon 9, Orbcomm’s launch date will be subject to SpaceX’s Dragon launch schedule.
Fort Lee, N.J.-based Orbcomm contracted with SNC in May 2008 to build 18 second-generation Orbcomm satellites for $117 million, with an option to build up to 30 more for between $5 million and $7.7 million per satellite, depending on how many more are ordered, and when.
SNC, which is working with Boeing Co. on the Orbcomm program, had agreed to be ready for a preshipment review of the satellites 24 months after the contract. This is the deadline that was missed.
It is unclear whether Orbcomm could have retained a Falcon 1 launch if SNC had been on schedule, with the first satellites ready for launch in late 2010, or whether the launch vehicle has been subject to availability issues of its own.
Orbcomm signed the launcher-switch agreement with SNC Aug. 31, according to the SEC filing. SNC will bill Orbcomm about $4.1 million to modify the satellites to be launched either on Falcon 1 or on Falcon 9. The agreement includes a $1.5 million credit SNC has given Orbcomm for future services.
Orbcomm said it is in negotiations with SNC “regarding the impact” of the manufacturing delay.
Orbcomm said its current constellation is in good health. But a promising new business line of providing an Automatic Identification Service (AIS) to coastal authorities about what ships are nearby is now being supported by only one satellite — one of six launched in June 2008.
Five of those six satellites have failed in orbit, and Orbcomm has collected on an insurance claim. But it retained $10 million in rights not covered by the insurance payment and sought compensation from the prime contractor of the six spacecraft, OHB Technology of Bremen, Germany.
Orbcomm and OHB have settled all issues related to these six so-called Quick Launch satellites as part of an agreement that calls for OHB, through its LuxSpace subsidiary, to build and launch, by mid-2011, two AIS satellites that will be leased by Orbcomm. All second-generation Orbcomm satellites will be equipped with AIS terminals in addition to their core messaging function.
Orbcomm reported that for the three months ending Sept. 30, revenue excluding one-time gains increased by nearly 14 percent, to $8 million, compared with the same period a year ago. The company is cash-flow positive and has signed new multiyear contracts with three of its top customers, each of which accounts for 10 percent or more of Orbcomm revenue: Komatsu Ltd., Caterpillar Inc. and AI, the former General Electric Asset Intelligence division.