Unfazed by Customer Lawsuit, Eutelsat Prepares for Busy Launch Year

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PARIS — Satellite fleet operator Eutelsat on Jan. 9 said a billion-dollar lawsuit filed by a customer in Brazil is without foundation and not expected to trouble the company’s business.

Eutelsat also addressed what it acknowledged were crowded schedules of launch service providers in 2015, a year in which Eutelsat plans to launch a record five satellites, including two with SpaceX of the United States and two aboard Russia’s Proton.

Addressing a press briefing at the company’s headquarters here, Eutelsat Chief Executive Michel de Rosen said the lawsuit filed in a Rio de Janeiro court in December by Via Sat Brasil — no relation to ViaSat Inc. of the United States — followed a contract breach by Via Sat that led to the contract’s cancellation.

Eutelsat 3B. Credit: Astrium
Eutelsat 3B. Credit: Astrium

Via Sat in May contracted with Eutelsat to use the entire Ka-band high-throughput payload of the Eutelsat 3B satellite for nationwide broadband coverage through five steerable spot beams. The five-year contract raised eyebrows at the time because Via Sat was a little-known entity that was established only in 2011.

De Rosen said the Via Sat contract was in fact a contract with a consortium regrouped under the Via Sat name.

“We signed a contract with a company that was a consortium comprising [several] entities,” de Rosen said. “One of these companies committed a major breach of its contract obligations, which caused us to cancel the contract with them, and to transfer the contract to another company in the consortium, with which we are now working.”

Via Sat, for its part, is claiming that Eutelsat unilaterally ended the contract, which Via Sat said at the time was key to its plans to expand its consumer and small-business broadband business in Brazil.

Via Sat evaluated its potential losses at 2.8 billion Brazilian reais, or about $1.1 billion at current exchange rates.

“The demands made by the customer that committed the breach [of contract] are extravagant, totally without foundation,” de Rosen said. “It does not trouble my sleep.”

Eutelsat officials declined to identify the customer that, previously as part of Via Sat and now on its own, is assuming the multiyear lease contract.

Eutelsat is the world’s third-largest commercial satellite fleet operator by revenue. In 2015 it plans to launch a record five satellites.

Yohann Leroy, Eutelsat’s technical director, said Eutelsat paid only 900 million euros ($1.1 billion) for the five satellites’ construction, launch and insurance. But only two of the satellites fit the standard Eutelsat satellite profile. The three others — two all-electric satellites to be launched aboard SpaceX’s Falcon 9 rocket, and one that was ordered as part of Russia’s federal space program for which launches are paid in Russian rubles — benefited from exceptional pricing.

The two all-electric satellites are part of a four-pack ordered from Boeing Space and Intelligence Systems, of El Segundo, California, in 2012. Two were ordered by Satmex of Mexico, which has since been acquired by Eutelsat and renamed Eutelsat Americas. The two others were ordered by ABS of Bermuda.

The first pair, the Eutelsat 115 West B spacecraft and one for ABS, is scheduled for launch in late February aboard a Falcon 9. Leroy said that despite the launch delays in recent months at Hawthorne, California-based SpaceX, the satellite is scheduled to leave the Boeing plant Jan. 19 to prepare for a late-February launch from Cape Canaveral Air Force Station, Florida.

Leroy said that, assuming SpaceX succeeds in launching its Dragon space station supply freighter in the coming days, the Falcon 9 has one more launch to conclude, of NASA’s Deep Space Climate Observatory in late January, before the Eutelsat and ABS satellites.

The second pair of Boeing-built all-electric satellites for Eutelsat and ABS are scheduled for launch aboard a Falcon 9 late this year, Leroy said.

The Eutelsat 9B satellite, meanwhile, is awaiting a Proton launch organized by International Launch Services of Reston, Virginia, which commercializes the Russian-made rocket. The launch is scheduled for sometime this summer.

The Express-AMU1 satellite owned by the Russian Satellite Communications Co. (RSCC) of Moscow carries the name Eutelsat 36C for Eutelsat, which will share the payload with RSCC. The satellite, built by Airbus Defence and Space, was not contracted through ILS in U.S. dollars but directly between RSCC and Proton builder Khrunichev Space Center of Moscow, in rubles.

The fifth satellite scheduled for launch this year, the Eutelsat 8 West B, is being built by Thales Alenia Space of France and Italy and is scheduled for a summer launch aboard a European Ariane 5 rocket.

Paying its share of the Eutelsat 36C launch charges in rubles, and evenly dividing the cost of two $60 million SpaceX Falcon 9 launches, helped reduce Eutelsat’s capital spending to less than 180 million euros for each of the five satellites scheduled for launch this year, even if Eutelsat must pay higher insurance premium charges for Proton launches than for SpaceX’s Falcon 9 or the Ariane 5.