Tesat-Spacecom Predicts Strong Growth Over Next 2 Years

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BERLIN — Satellite electronics manufacturer Tesat-Spacecom expects double-digit revenue growth in 2010 and again in 2011 and says it has an easier time coping with the changing euro-dollar exchange rates than with the inexplicable shifts in U.S. technology export regulations.

Backnang, Germany-based Tesat, whose core business is satellite tube amplifiers and passive microwave electronics for satellites, is also hopeful that its multiyear investment in laser communications for satellites will pay off.

The company, which provided the terminals used for an ongoing experiment between the U.S. Missile Defense Agency’s Near Field Infrared Experiment (NFIRE) satellite and Germany’s TerraSAR-X radar Earth observation spacecraft, has four laser communications terminals on order. Two are for European geostationary-orbiting satellites — the AlphaSat mobile communications spacecraft on order for Inmarsat of London, which includes a technology payload financed by the European Space Agency (ESA), and a laser terminal for Europe’s planned data-relay satellite system.

The others are for two Sentinel Earth observation satellites being built for ESA and the European Commission.

Tesat, which believes its work for the past 15 years on laser communications terminals has given it a worldwide lead in the technology, says it can deliver a laser communications terminal that is capable of multi-gigabit-per-second transmissions, weighs just 45 kilograms and uses just 150 watts of a satellite’s onboard power.

The German government remains the biggest benefactor for Tesat’s laser work, but Tesat Chief Executive Peter Schlote said the company remains confident that for both military and commercial customers, laser communications between satellites and, where possible, between the satellites and the ground will find a market.

Laser links, in addition to their ability to transmit huge amounts of data quickly, do not need to secure frequency allocations with international regulators and are more resistant than classic radio-frequency broadcasts to intentional jamming.

In a June 8 interview here during the Berlin air show, ILA 2010, Schlote said the company’s goal is to be No. 1 or No. 2 in the world in each of its main business lines.

For passive microwave electronics, he said, Tesat vies with Com Dev of Canada for the position of first-place supplier. Schlote said satellite prime contractors retain about 30 percent of this market for themselves. The remaining 70 percent is competed, with Com Dev having a slightly larger share of the business than Tesat.

Schlote, who assumed his post in mid-2009, said market share is not so much a result of shifting exchange rates as a product of long-term relationships with satellite prime contractors.

Tesat has won business on most of the commercial Ka-band broadband satellites ordered in the past couple of years and also is a major subcontractor to OHB Technology of Bremen, Germany, and to Surrey Satellite Technology Ltd. of Guildford, England, for the 14 Galileo navigation satellites under construction by the OHB-led team.

Tesat is providing telemetry, tracking and control hardware for Galileo to OHB, and is under contract to build traveling-wave tube amplifiers for Surrey Satellite, which is responsible for the Galileo payloads.

Tesat reported revenue of 175 million euros ($214 million at current exchange rates) in 2009 and is forecasting 200 million euros in business in 2010, a 14 percent increase. Schlote said 2011 should see similar growth.

The company’s work force is growing with the revenue, going from 950 full-time staff in 2009, including personnel under contract, to about 1,000 now and expected to reach 1,100 by the end of this year, he said.

Schlote said that like every other non-U.S. company that purchases satellite hardware from U.S. contractors, Tesat in the past decade has learned how to deal with the U.S. International Traffic in Arms Regulations (ITAR), which classify satellite components as weapons and require special export authorizations.

But while U.S. government and industry officials say ITAR is getting easier to deal with as the U.S. State Department gets better at speeding export-license approvals, Tesat has found ITAR increasingly difficult in the past year or two.

Specifically, Tesat officials said the components on the ITAR-controlled U.S. Munitions List change for no obvious reason.

“We’ll take delivery of a shipment of, say, a batch production of 500 modules we have purchased from our U.S. supplier, and then we’ll be told that the components, which we have used for years, have suddenly been put on the ITAR list,” Schlote said. “It is this retrospective aspect that we cannot understand. This did not used to happen. From our perspective, ITAR is getting worse.”

While tube amplifiers are not on the ITAR-controlled list, many of their components are.

Schlote said Tesat regularly evaluates the risk factors in dealing with its suppliers. ITAR remains a factor as it weighs the ITAR and currency-exchange risks of maintaining U.S. partnerships it has developed over the years versus striking up new relations with non-U.S. suppliers.