Sky and Space Global begins 10-day road show to secure crucial investor backing

Credit: Sky and Space Global
PARIS — Startup satellite IoT/M2M provider Sky and Space Global (SAS) has begun a 10-day road show in Asia and Australia to make a do-or-die case to investors to fund new satellites that the company says will carry it to recurring revenue.
In its latest presentation, SAS asks investors to see it as occupying a sweet spot between other satellite operators, narrowband and broadband, some of which are themselves in startup phase and looking for financing.
Credit: Sky and Space Global
SAS is asking shareholders to purchase 1.5 billion new shares, at 1 Australian cent each, to raise 15 million Australian dollars ($10.5 million): http://bit.ly/342vUlA
As of Sept. 13, SAS had a market capitalization of 61 million Australian dollars, with 2.1 billion shares held by 9,400 shareholders.
The funds will be used to pay satellite manufacture GomSpace of Denmark and Sweden to build eight 6U cubesats to be launched in time to begin revenue generation in late 2020. These satellites will use an inclination to provide coverage between 60 degrees North and 60 degrees South latitude.
These satellites then will be complemented by SAS’s larger 3U constellation in equatorial orbit that will focus on the company’s core equatorial markets. The first three of these satellites have been in orbit since 2017.
Credit: Sky and Space Global
SAS said it had signed agreements with more than 50 customers, “providing material revenue opportunity once first commercial satellites launched.”

Hughes: Early data shows $150-$200/month revenue from community Wi-Fi in South America, Africa, Russia

Credit: Hughes Network Systems
PARIS — Satellite broadband hardware and service provider Hughes Network Systems’ early experience with rural Wi-Fi in South America, Africa and Russia has shown that each installation generates, on average, monthly revenue equivalent to two U.S. fixed broadband subscribers.
Hughes Chief Executive Pradman P. Kaul said it was too soon to say whether this figure would hold up as Hughes expands its community-Wi-Fi service, but that the early results show each installation producing $150-$200 per month.
“Community wifi is exciting for markets to address people who can only afford $5-$10 per month by combing them to get ARPUs of $150-$200 per month,” Kaul said here Sept. 10 during Euroconsult’s World Satellite Business Week.
“This represents our initial experiences in these countries. It varies from country to country, but that is the general ballpark. I think it is sustainable. We’ll learn a lot more in a year or two. But it is a number that is standing up right now.”
One industry official familiar with community Wi-Fi in Mexico said that in some cases it can return $500 a month in gross revenue, but that a provider like Hughes or its U.S. competitor, Viasat Inc., will take home no more than half of that or less after paying local partners and what this official said is often-onerous government license fees.
Another industry official with experience in Brazil agreed. “Some governments, and Brazil is one of them, talk about universal access to broadband but then make it difficult for a service provider to make it a profitable business,” said this official, who does not work for Hughes or Viasat.
Hughes has said that a community-Wi-Fi terminal typically needs to have a capacity of up to several hundred Mbps to afford download speeds of 10 Mbps or more per user. Each Wi-Fi unit can cover a 500-meter area, depending on the local geography.
Hughes’s Russian partner, KB Iskra, has installed high-power Wi-Fi access points to provide coverage of more than 1,000 meters from the terminal, enough for an entire small village.
“Typically, each VSAT supports 20 to 30 subscribers, each paying on average 50% less each month than individuals with home-based service in urban areas, thanks to the cost-sharing model. The company has installed more than 600 shared VSATs, and now provides affordable service to almost 20,000 regular Wi-Fi users who would have otherwise remained unconnected,” Hughes said of the KB Iskra experience in eastern Russia.

Vega rocket prime contractor: Production error may be root cause of costly July failure

Credit: Avio
PARIS — The prime contractor of the European Vega rocket that failed in July, resulting in the loss of a United Arab Emirates reconnaissance satellite insured for $413 million, said a manufacturing defect in the rocket’s second-stage motor might be the root cause of the failure.
A European government board of inquiry concluded that a “thermal/structural” failure of the rocket’s Z23 second stage motor’s forward dome is the most likely cause. But the board’s Sept. 5 statement on the preliminary results of its inquiry was too vague to draw many conclusions: http://bit.ly/2lZ6FiB
In a Sept. 12 conference call with investors, Vega prime contractor Avio SpA said that while the precise mechanism that led to the failure was not yet known, there is the “possibility of an undetected non-compliance in production.”
The inquiry board said it found no evidence of poor workmanship or any design issues in the Z23 stage or its carbon-fiber forward dome. It suggested that it had reviewed all the documentation related to the flight hardware.
But the inquiry board said it would ask Vega contractors to reinforce multiple elements and present its work to the inquiry board in view to a return to flight in the first three months of 2020.
Avio Chief Executive Giulio Ranzo did not say the company had found on its own any indications of a manufacturing defect in the forward dome.
He said the temperatures and pressures that the hardware must withstand are severe, but that both Avio and the inquiry board had validated the dome’s design.
“We will develop a validation plan with subsystem tests and inspections and further engineering analyses,” Ranzo said. “This will help refine details of the causes of the failure.
“We have agreed to implement corrective actions in these subsystems on certain processes and certain equipment linked  directly to the failure mechanism, to make this motor more robust.”
Ranzo said a meeting with the inquiry board and the 22-nation European Space Agency (ESA), which oversaw the inquiry, will be held to verify that the corrective actions are implemented. He said the hardware for Vega’s next flight — in particular the Z23 stage — will be sent to Europe’s Guiana Space Center before the end of the year.
Credit: Avio
The failure’s cost to Avio and the broader Vega contracting team is yet to determine. Ranzo said it’s possible that part of the cost would be covered by ESA. Avio has prudently decided to commit to only 5 million euros ($5.7 million) of its approved 9-million-euro share-buyback plan to keep cash available if needed.
Assuming a return to flight by March, he said the inaugural flight of the more-powerful Vega C rocket would occur by June. It’s possible that there will be a second Vega flight before the introduction of Vega C.
Launch-service provider Arianespace has yet to settle on a 2020 manifest for Vega.
For the six months ending June 30, Avio reported a net profit of 7.1 million euros, up 14% from the same period a year ago. Revenue was up 6%, to 189 million euros.
Ranzo said that Vega production is only about 25% of Avio’s revenue, with the remaining 75% coming from production of components for the heavy-lift Ariane 5 rocket and development work related to Vega C and the Ariane 5 replacement, Ariane 6, whose inaugural flight is scheduled for late 2020.

Promus, Seraphim say venture funding still plentiful; wider investor pool awaits successful exits

Mike Collett, founder, managing partner, Promus Ventures. Space Intel Report photo
PARIS — Managers of two space-focused venture funds said the space sector has yet to generate interest beyond a relatively small investment class of wealthy individuals and companies with a strategic interest in the technology.
The wider pool of investors, they said, is likely waiting to see evidence of successful exits by early investors before jumping in.
That may be a problem at some point. But for the moment, Mike Collett, founding and managing partner of Promus Ventures; and Mark Boggett, chief executive of Seraphim Capital, said VC capital remains plentiful. They addressed the Euroconsult World Satellite Business Week here Sept. 11.
“There is a huge amount of interest remaining in this sector,” Boggett said. “That has been demonstrated by the face that the B-round series was the fastest-growing area in this market last year. Lots of new investors are coming in despite the fact that there is little by way of evidence of exits.”
74 Earth observation startups funded in past 12 months
Lots of investors, and also a continued large flow of new projects seeking funding. Boggett said his company is aware of 74 Earth observation startups raised funds in the past 12 months — and probably triple that number that were seeking funds but did not find investors.
But the lack of successful exits remains an issue that is a factor in keeping a larger pool of investors from entering the space sector.
“There are not a whole lot of us who invest in space,” Collett said. “You have to ask yourself: Why is that? Why isn’t Silicon Valley coming in? The realistic answer is that there are very few business models right now among the startups that show sticky, recurring-revenue models.
“That doesn’t mean they can’t come,” Collett said. “We are certainly betting that the ones we are invested in are going to prove that out. But it is a difficult environment [even though] the market to raise is a good one. It is just as hard to raise capital as a space company now as it was last year.”
Mark Boggett, chief executive, Seraphim Capital. Credit: Euroconsult
Boggett agreed that a few successful exits by investors “would obviously be helpful in bringing non-specialist VCs into the market. The more important point is bringing the appetite to the LP [limited partner] investors in venture funds.”
Boggett said sovereign venture funds and strategic investors are still the main investors.
The relative lack of identified customers has been an issue for the so-called mega-constellations of broadband satellites. But Collett said this issue is widespread.
“Are there a lot of good business models that are showing top-line growth that is doubling every year with a sticky, recurring-revenue model? Are there constellations show that the investment needed to get the constellation up is really paying off — not only in government-type work but consistent corporate, recurring seven-figure-type contracts? The more of that we have, the better.”
Boggett said Seraphim is mainly looking at startups that have closed Seed-round funding and are preparing a Series A round. For these companies, immediate revenue is not a priority.
“A Seed-stage company might not earn revenue until they are in their C- or D-round,” Boggett said. “So we have to look at other metrics.”
For its portfolio, Seraphim aims for an internal rate of return of 20%. Boggett said at  least a third of the businesses selected by the fund fail during Series-A funding rounds. “At the Seed stage it’s more like 50%, 60% or 70%.”
Collett said Promus has a similar experience. “If you don’t have around a 30% loss ratio for your portfolio you are not taking enough risk,” he said.

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British military announces competition for Skynet 6 operations without a Skynet 6 program, adds SigInt to a proposed radar constellation

British Defence Secretary Ben Wallace. Credit: Wikimedia
PARIS — The British Defence Ministry has added signals intelligence to the payload it wants on a future high-resolution radar intelligence, surveillance and reconnaissance system.
Given the political turmoil in Britain, whether the multi-satellite system will be contracted anytime soon is unknown. But the Defence Science and Technology Laboratory (DSTL), an arm of the Defence Ministry, has awarded Airbus Defence and Space a contract to design cluster of satellites to carry both a synthetic-aperture radar (SAR) and radio-frequency collection payload.
“This addition to our capability is a valuable part of the future of Defence Space. Partnership between DSTL and Airbus on this project secures UK jobs as well as continuing to exploit advances in the UK space sector.”
The project, called Oberon, is intended to enable Airbus to produce a demonstration payload in 2022, with an operational system “as early as 2025,” Airbus said in a Sept. 11 statement.
Colin Paynter. Credit: Airbus
“Project Oberon builds on Airbus’s expertise in space radar technology developed over 40 years,” said Colin Paynter, managing director of Airbus Defence and Space UK. “I look forward to seeing this study leading to a new world-class surveillance capability for the UK MOD, helping to protect our armed forces across the world.”
The UK military’s interest in a radar system, which it does not currently have, has been known for some time. Airbus and is subsidiary, Surrey Satellite Technology Ltd. (SSTL), in 2018 launched the NovaSAR satellite, which has been used by British defense authorities to test a future operational system of several satellites.
But the signals-intelligence payload appears new. It follows the launch this year of the first spacecraft for two commercial SigInt systems, Hawkeye 360 in the United States and Unseenlabs in France. Both companies view the military market as among their most promising.
Also on the British Defence Ministry’s agenda is what to do about the next-generation milsatcom system, Skynet 6. Airbus’s multi-year contract to manage the current four-satellite Skynet 5 network expires in 2022, and the ministry has said it wanted a competition for the follow-on contract.
That is what Defence Secretary Ben Wallace announced Sept. 11.
In a speech to the DSEI conference, Wallace said:
“Fifty years ago Britain put its first satellite, Skynet 1, in space. Today we’re having to deal with increasing threats to satellite-based navigation. So the need for robust communications has never been more vital.
“That’s why we’re developing Skynet 6, which will give our forces unparalleled capacity to talk to each other in any hostile environment. And I can announce the launch of a new competition for an industry partner to operate and manage the ground stations, infrastructure and technology involved in this program.”
It is unusual for a customer to announce a competition for a services contract before the hardware whose services are to be managed is decided. But that is the case here.
Airbus in 2017 was awarded a design contract for a single Skynet 6A satellite, which was supposed to be a gap filler between the current Skynet 5 and the future Skynet 6 systems. But more than two years later, there is still no Skynet 6A construction contract, and British defense authorities remain undecided on what the full Skynet 6 system will look like — a partnership with private industry, as in Skynet 5; a conventional procurement of hardware to be operate by the ministry, as seemed to be the ministry’s priority; a defense payload on a satellite system built in partnership — no decision has been made.
Still, Airbus made the best of the Wallace statement.
“We welcome today’s announcement from the UK MOD that they are looking for a supplier to provide the next-generation secure milsatcom service as part of the Skynet 6 military satellite program,” said Richard Franklin, head of secure communications at Airbus. 
“Airbus has an outstanding track record of being the pioneer of secure milsatcoms within a commercial framework – having provided the UK MOD and its allies with resilient and secure milsatcom services and support for more than 15 years under the Skynet 5 program. 
“As well as taking the technical, commercial and financial risk, on behalf of the MOD, we have developed the system from two Skynet 5 satellites to a fleet of four providing near global coverage when combined with the previous Skynet 4 generation spacecraft.  Airbus operates and manages services for a fleet of seven spacecraft giving the MOD access to the most secure satcom services in the world enabling operational effectiveness. A capability which will endure far beyond the contractual end date offering outstanding value for money.”

Maxar CEO defends decision to stick with commercial GEO product line, despite everything

Daniel Jablonsky, CEO, Maxar Technologies. Credit: Maxar Technologies
PARIS — Daniel Jablonsky took over at Maxar Technologies in January at a time of near-existential crisis at the company and had wide latitude in determining its future direction.
He elected to end a NASA contract for in-orbit servicing because it would have required substantial Maxar investment, but to retain the loss-making commercial telecommunications business after selling off part of the Palo Alto, California, site and making staff reductions.
The commercial, geostationary-orbit satellite telecommunications market, despite what looks like a rebound from the no one-lives-here levels of 2017 and 2018, is not seen as ever returning to its fat years of the 1990s and 2000s.
The Palo Alto facility burned $100 million in cash in 2018 and is still forecasted as reporting a negative cash flow for this year, and somewhere around a break-even in EBITDA terms, Maxar said.
Credit: Maxar’s Q2 2019 earnings presentation.
The market’s uncertain prospects and Maxar’s need for more U.S. government business provoked what threatened to be an exodus of talent from the Palo Alto facility. Maxar reacted by spending what it estimates will be $20 million this year on retention efforts.
Why did Jablonsky keep a business that, even with a rebound, has never been one of large profit margins, and one in which better-financed competitors — Airbus, Boeing, Lockheed Martin, Northrop Grumman, Thales Alenia Space — appear ready to commit self-funded R&D to meet evolving customer demand?
Jablonsky has addressed this question to investors in the past nine months, but on Sept. 11 here at Euroconsult’s World Satellite Business Week, he gave a distilled version of his thesis: A small number of commercial successes combined with NASA and other government work using Maxar’s commercial satellite platform, combined with a lower cost basis, will be enough to operate a profitable business:
“The company has a little more debt than I’d like and we’re working on that,” Jablonsky said. “But I am a believer in optimal capital structures, in optimal returns for shareholders. I looked at every program in the company and asked what makes the most sense for returns to our shareholders, and what doesn’t.
“If it’s not accretive in a certain time horizon and doesn’t have the right business case to it, then they’re not things we’re going to do. The RSGS [NASA satellite-servicing] case is one of those.
“It doesn’t mean we’re giving up on robotics. There are five robotic arms on Mars right now. We built all five. We just won the first two study contracts for Canadarm 3, the dextrous plus the heavy-lifting arm on the Lunar Gateway, the Artemis program. So we’re very embedded in the R&D and what future robotics looks like in space, and potentially in-orbit servicing. We’re doing DARPA contracts for refueling. These are things that we continue to have a unique expertise in.”
Maxar has now become a U.S. company eligible, alongside the big U.S. aerospace primes, for civil and military work. Maxar may be arriving at a good time. The U.S. Defense Department is preparing to recapitalize just about all of its satellite programs, leaving a possible opening for a newcomer like Maxar.
That may be one reason to keep the commercial satellite line and to reinforce its synergies with future government work.
Credit: Maxar’s Q2 2019 investor presentation
“In terms of what happened with what we used to call SSL — It’s Maxar now — we looked at the addressable market and the cost structure we had,” Jablonsky said. “We looked at the opportunity to invest in, and grow, the business. We said: We’re not sure exactly where the commercial geo-comms market is going.
“We have 92 geostationary commercial satellites on orbit, which is astounding. They’re all working and they’re all doing their missions.
“But we needed to retrench a little bit, and get on the right cost footprint for that piece of the business with a mix of awards in GEO comm and LEO comm, our own constellation, the NASA program, defense programs.
“When we put all that together we said: We can break even at something we’re very sure about: one two two GEO awards a year or 1300 [satellite] buses a year. NASA’s Artemis is a 1300 bus program, $375-million, and it qualifies as one of those.
“We also just one our first Legion form factor GEO award [for new satellite operator Ovzon of Sweden], and it’s a digital payload. That’s a new offering we have. It’s not the traditional 1300 bus.”
Ovzon’s satellite uses a satellite platform designed for the next generation of high-resolution optical Earth observation satellites for Maxar’s DigitalGlobe. Repurposing this platform for a GEO order was a surprise early victory for the new Maxar.
“Now we’re doing NASA hosted payloads and we think the pipeline is also good for additional awards there as we pick up the other pieces of the business such as robotics.
“I am very exciting about the business. It has to be at the right cost footprint. It wasn’t before. It was single-threaded into one market segment and that’s not the way to survive.

Northrop Grumman Innovation Systems: GEOStar small-geo platform, satellite mission extension anchor commercial offer

Frank DeMauro. Credit: Northrop Grumman Innovation Systems
PARIS — Northrop Grumman’s purchase of Orbital ATK in 2018 raised the question: What does Northrop want to do with the commercial space business that came along with the sale?
The deal occurred in the teeth of a sharp downturn in commercial satellite sales industry-wide, and a Pentagon prime contractor like Northrop was never going to be impressed by the thin operating margins in that business.
But the new Northrop Grumman Innovation Systems division has plans for the commercial space sector and Orbital’s GEOStar line of commercial telecommunications satellite platforms. A recent two-satellite win from Space Norway was a reminder to the market that the Orbital heritage has not been shelved.
On a related track, Northrop-owned SpaceLogistics LLC is about to pioneer an effort to refuel aging but otherwise healthy large geostationary-orbit telecommunications satellites. The first launch is scheduled aboard an International Launch Services Russian Proton rocket within two weeks.
Frank DeMauro, vice president and general manager of the Space Systems Division; and Joseph Anderson, vice president of operations and business development at SpaceLogistics, discussed the company’s positioning in the commercial market, and why they were attending Euroconsult’s World Satellite Business Week here.
Small geostationary satellites are in fashion. Boeing, Thales, Maxar and Airbus are offering small-GEO platforms . What is Northrop Grumman doing to stay competitive?
DeMauro: It’s going to remain an area in which we still stay focused. The GEOStar platform originally was for payloads of less than a kilowatt of power. Over the years we’ve evolved that capability, up to and including our GEOStar-3 platform to accommodate payloads in the neighborhood of 8 kW, and the first of those was launched early last year and it’s performing extremely well.
GEOStar-3 is the basis on which a lot of our current opportunities will be bid. It’s reliable, it has a lot of heritage and we think it will remain attractive to operators for years to come. It’s flexible, we can do a dual-launch configuration with that platform, so we can reduce launch costs for the operators. The payload power it offers is attractive to a lot of the customers, particularly those replacing existing assets that may be coming to their end-of-life. Our plan is to continue to offer a range of capabilities from the smaller size to what we refer to as the medium-size platform, which we think GEOStar-3 is. We think our approach is cost effective, not only from the price of the spacecraft but the ability to do multiple satellites on a single launch, so we intend to remain in that market with that platform.
How do you see the market shaping up for small GEO in the near- to mid-term?
DeMauro: It has been very slow. We see the market rebounding an already this year. I think there have been 11 [GEO-orbit satellite] awards. We’re almost at the end of the year but there could be others. While we may not see a rebound to where we were when people were ordering 25 satellites a year, we don’t think it’s going to remain as it had been the past couple years. We see a modest rebound of the market. We think there’s a place for the GEOstar platform to play, and not only as a bent-pipe payload provider. We can also accommodate processed payloads on that platform. GEOStar could become a building block to additional platforms that might be smaller and have a shorter life, but are more attuned to what some of the customers are looking for in terms of smaller, more flexible satellites.
What products or services does Northrop Grumman think are best suited for today’s commercial market? 
DeMauro: If you start at the component level, we have a components business unit that does solar arrays and structures, propellant tanks and thermal systems, which we sell as a merchant supplier. Not only are we vertically integrated, but we also sell satellite systems in which we integrate those vertically integrated products. Other products we procure around the world to support not only our bus platforms but the payloads we offer. We’re able to provide those systems, and we’re also able to provide satellite servicing offerings as part of our SpaceLogistics business.
Inaugural commercial space-refueling mission for Intelsat launch launches Sept. 30, second-generation system to launch in 2020
Anderson: We see a lot of interest in our satellite servicing. It’s a new market. We have just shipped to the launch base our first-of-a-kind Mission Extension Vehicle (MEV-1). We’re looking at Sept. 30 as our launch date for the first MEV. That MEV will rendezvous and dock with an Intelsat satellite in January, the IS-901 spacecraft. This is our customer base: not only are we selling new satellites, we’re also selling satellite services.
Joseph Anderson. Credit: Northrop Grumman Innovation Systems
A year or so ago we introduced our next-generation of life-extension products as well. We call them Mission Extension pods. We’ve got a couple of term sheets in place for those now — customers interested in procuring those services — and part of that is a robotic vehicle that will be able to perform other types of services in orbit, such as simple repair missions. We see moving beyond just the life extension product to other types of satellite augmentation.
GEO operators seem to be trending away from extending the life of satellites in orbit.  
Anderson: You see a wide spectrum of interest out there. We see quite a bit of interest in life extension because they’ve been waiting on doing their replacements and so now they’re looking for, “How do I continue to extend that delay while we’re waiting for that next generation of technology to come out before we do the investment, waiting to see if LEO markets evolve that will influence GEO demand.” One of the new things emerging is smaller, flexible spacecraft. [Customers are] looking to adapt to their marketplaces quickly, and satellite servicing is another method to provide that. In our next-generation satellites that I’m working with Frank’s team on including things like power-data adapters, so we can change the payload over time. You could still go with a long-life spacecraft bus but interchange payloads as another way to achieve the same basic interests.
Has the U.S. government committed to any launches? 
Anderson: MEV-1 is booked for the first five years with Intelsat. We are launching MEV-2 in the spring of next year. Again, Intelsat is the first user of that asset. The U.S. government is picking up interest and we are talking to them about potential services. I don’t know how much more I can say about that at this point, but there is definitely an interest and you can see in some of their procurements that are coming out now, they are looking at prototypes to demonstrate in-orbit servicing and so I do see it working its way into their architecture more in the future.
There are a lot of firsts there – we had to change the whole regulatory environment for that as well. In the U.S. we have agencies for regulating GEO comsats, agencies for regulating Earth observation satellites. And EMV is quite different from either one of those. So we had to work through the process, the State Department, the FCC, and NOAA together to figure out how to license it. And so we did that, we are fully licensed, the FCC will be our oversight agency from an Outer Space Treaty perspective, but we also have a license with NOAA to license our imager; to do the rendezvous with our clients, we have imaging payloads. So we worked out a method for doing that. Likewise, insurance – this type of product has never been ensured before, being a commercial business, we did work with the underwriters and our broker and we developed new loss formulas, new ways to insure this product. So we’ve got our launch plus one year insurance established, so we’re ready to go here a month from now.
DeMauro: When you couple that with the technical challenges of rendezvousing two vehicles in space, it’s something we now do on a regular basis in LEO, with the Space Station and our Cygnus vehicle, but it’s a different environment in GEO. The client is very different, with different vehicles for almost every docking. So we needed to develop a rendezvous and docking system that was flexible enough to be able to support that. Validating it on the ground and in a few short months we’ll have the exciting day of the first rendezvous.
Does this capability have the potential for orbital debris removal?
Anderson: There is limited potential. The vehicle is designed for docking to satellites that are stable. Most orbital debris would probably be more tumbling. It would be difficult for our initial MEVs to do that. Our next generation system with the robotics, the mission robotic vehicle that would install these pods I mentioned, that has more potential for capturing that debris and removing it out to the graveyard orbit. We are focused today on the GEO belt, the GEO market, that is where the main market is. Broader active debris removal really requires a customer, who’s going to pay for the debris removal. That’s the challenge for a commercial business like SpaceLogistics is finding that customer. Clearly the things we are developing will enable us to achieve that when there is a commercial market to do that, – and we can do that in any obit, not just GEO. So we are developing those capabilities.
Space Norway: HEO broadband with payloads for Inmarsat, US Air Force as well. Credit: Northrop Grumman Innovation Systems
DeMauro: The main thing for us is trying to be as responsive as we can to what the customer is looking for. If they are looking for a replacement spacecraft, when they’re in our class of satellite, we think we have an extremely competitive offering. When they’re looking to extend the life of on-orbit assets, we’ve got the SpaceLogistics business to provide that. In looking to the future, in terms of the flexible payloads, we’re looking at how we can support that market based off the products that we currently offer.
You recently won a contract with Space Norway for two broadband satellites that will carry three payloads each and operate over the poles in an unusual, highly elliptical (HEO) orbit. What advantages did Northrop bring to the competition?
DeMauro: It’s a procurement we are extremely proud to take part in. We’ll be providing the spacecraft platform, integrating part of the payload on our own to the specifications of the customer, procuring the hardware, assembling the payload and testing it. We’ll also be integrating other payloads that were procured separately, one of which is going to be built by Northrop Grumman Aerospace Systems – a payload procured by the U.S. Air Force. It will essentially be delivered by the customer to us, even though it’s made by a sister sector. Then the Missions System sector part of Northrop Grumman will build part of the ground system for the spacecraft. Those procurements were all done separately.
One of the benefits we think Space Norway saw in having a single Northrop Grumman solution was the clear interfaces that we’ll have, managerially, across the company. We’re the prime integrator, we’ll get that payload for the U.S. Air Force mission delivered to us, we’ve got other payload components delivered to us, we’ll integrate it together and we’ll deliver a system to the customer. We think the GEOStar platform that we offered was the most competitive out there, so we think on its own it was an attractive offering. But when we coupled together the other parts of the scope from the other pieces of Northrop, we think it made it that much more attractive. The other aspect we think we offered that made it attractive was the dual launch configuration that we can fly in.
What are the upcoming milestones for the project?
DeMauro: We kicked that program off in July, and so far it’s going very well. We’ll have our preliminary design review in the early part of next year. Hardware is in procurement to support the build of the bus and the payloads.
Will the mission require modifications to the GEOStar-3 platform?
DeMauro: The only modification we have to make to the platform itself is to support the HEO orbit. The primary drivers are the attitude control system to fly in a different orbit and then there are some environmental differences in that orbit vs. GEO. We don’t see those as significant developments but they are updates to the platform that they will be making.

In major victory for ITU, Avanti and Arabsat settle Ka-band interference dispute

Avanit-Arabsat agreement on coverage in Europe, Africa and the Middle East.
PARIS — Satellite fleet operators Avanti and Arabsat have concluded an agreement that ends the Ka-band interference threatening both companies’ business in Africa and the Middle East by agreeing to a division of coverage satisfactory to both.
The agreement, which comes after months of negotiations — http://bit.ly/2xIi9tC — constitutes a rare victory for the International Telecommunication Union (ITU) as a mediator of disputes involving two powerful members — in this case, Britain and Saudi Arabia — and two satellite fleet operators.
Often maligned as toothless and unable to force administrations into negotiated settlements, the ITU’s Radio Regulations Board in this case was able to create the conditions that brought Avanti and Arabsat to the negotiating table.
Arabsat CEO Khalid Balkheyour. Credit: Arabsat
Arabsat Chief Executive Khalid Balkheyour commented “Our teams’ coordination meetings were held in a very professional way that resulted in a productive agreement,” Arabsat Chief Executive Khalid Balkheyor said in a statement announcing the agreement. “We are looking towards more future business cooperation and partnerships.”
Kyle Whitehall, London-based Avanti’s chief executive, said: “Avanti and Arabsat have been working together constructively since the start of the year under the auspices of the ITU to find a solution that enables both companies to serve their core markets.
“The agreement with Arabsat on Hylas 3 and   3, combined with Hylas 4 — which was unaffected by these discussions — puts Avanti in an optimal position to continue to serve its existing customers and to expand confidently in the future.”
Arabsat had claimed frequency priority over Avanti by alleging that it “brought into use” Ka-band frequencies on the Arabsat 5A satellite, launched to 30.5 degrees east in 2010. The latest satellite is just a continuation of that business, Arabsat said.
Avanti Chief Executive Kyle Whitehall. Credit: Avanti
Britain’s Ofcom telecommunications operator and Avanti challenged the Arabsat’s claim, saying no one anywhere has registered any Ka-band transmissions from Arabsat 5A.
When challenged on this point by Ofcom/Avanti written statements to the ITU, Arabsat invoked the ITU’s Article 48, used to denote military services that are not subject to ITU inquiries.
The ITU has been powerless in the past in getting nations to back down from Article 48 invocations, even in the face of evidence that some claims are on shaky ground.
The abuses of Article 48 have become frequent enough that the subject is on the agenda of the quadrennial World Radiocommunication Conference (WRC-19), scheduled Oct. 28-Nov. 22 in Sharm el-Sheikh, Egypt. Given the reluctance of the world’s major powers to cede any of their rights, it is unlikely that the ITU will be granted any major new prerogatives.
But officials hope that some of the worst abuses may be curbed.
The Arabsat-Avanti dispute became a matter of urgency for both companies with the entry into operations of the Arabsat 6A satelite following its April launch aboard a SpaceX Falcon Heavy rocket.
Arabsat 6A, with a Ka-band payload including mobile spot beams, operates from 30.5 degrees east, just half a degree away from Avanti’s Hylas 2 at 31 degrees east.
With the same frequencies beamed from satellites so close together and with overlapping footprints, interference was all but inevitable. Avanti said it had already started suffering interference on Hylas 2.
Even more interference was expected when Avanti’s Hylas 3 payload arrived at the 31 degrees east slot.
The Avanti payload is on a satellite that the 22-nation European Space Agency (ESA) and Airbus Defence and Space call EDRS-C, which was launched on Aug. 6. It carries a laser communications terminal to speed data from low-orbiting Earth observation satellites to ground operators as part of a commercial service called the Space Data Highway.
By allowing Avanti to develop most of its planned business from Hylas-3, the Arabsat-Avanti agreement makes it more likely that Avanti will pay ESA the $30-million “embarkation fee” associated with placing the Avanti payload on the EDRS-C satellite.
Avanti will be able to cover some of the business lost with the Arabsat agreement by training beams from its Hylas 4 satellite at 33.5 degrees west over that territory. A slot that far away from Arabsat 6A poses no risk of interference.

After 4 years of unwanted excitement, Spacecom looks to return to normalcy; Amos-17 operational in November

Spacecom Chief Executive David Pollack. Credit: Spacecom
PARIS — Israeli satellite fleet operator Spacecom has weathered its own plague of frogs and can now wish for nothing more than stability.
The company reported a nearly 4% increase in revenue, to $41.2 million, for the first six months of 2019 compared to the previous year. Gross profit was up 23%, to $15.3 million. The increase was mainly due to an uptick in revenue from the Amos 4 satellite at 65 degrees east.
Its new, Boeing-built Amos-17 satellite, launched by SpaceX on Aug. 6, is healthy in orbit and scheduled to enter commercial service in November — a longer-than-usual testing period to give Spacecom time to get used to the satellite’s digital channelizer.
As of Sept. 1, Spacecom had booked $61 million in orders for Amos-17, which is replacing Amos-5 at 17 degrees east.
So, a string of relatively normal events for a company that has not had a normal life for several years:
The 2015 in-orbit failure of its Amos-5; the 2016 on-pad failure of the SpaceX Falcon 9 rocket, destroying the Amos-6 satellite and scuttling an African partnership with Facebook; turmoil at its largest shareholder; dithering by the Israeli government on future satcom demand; an abandoned buyout offer by a Chinese investor — Spacecom has had to contend with all of this.
It’s issues now are more garden variety, including building a business in a rough, highly competitive African market, and waiting for the Israeli government to decide whether communications satellite manufacturing is a strategic national priority.
David Pollack has been Spacecom’s chief executive through all of these travails. With light now appearing at the end of the tunnel, Pollack was able to discuss business as a “normal” satellite operator.
When will Amos-17 enter commercial service?
In November. We will have a long payload test procedure. This is the first time we are using a digital channelizer. We want to check all its possibilities.
Were you kept informed of the inquiry into the failure of the Intelsat IS-29e satellite, which like Amos-17 is a Boeing 702MP model?
We were as much a part of the investigation as we could be. We followed it very, very closely. We had a U.S. citizen who was authorized to be part of it with the Boeing team. We were updated as much as ITAR permits. But our American representative was fully updated and we were assured everything was OK.
The IS-29e situation was known before we purchased our [Amos-17] insurance and the insurers were very involved in this. They received all the answers to their many questions. And Boeing performed some additional checkouts for the satellite after what happened.
You’re looking at lots of markets in Africa for Amos-17, which has C-, Ku- and Ka-band capacity. What are the most promising?
I am still grieving the loss of Facebook as our customer for Amos-6. Unfortunately, I do not yet have another Facebook. But we changed the design of the satellite [compared to Amos-6] because we know that nothing stands still. So the Amos 6 design, which Facebook liked, we don’t have any more. We have HTS on C-band and we are targeting large customers for in-country C-band in several nations. C-band isn’t easy to put many beams on because the equipment is larger, but the guys who designed this did a very good job.
We are already in discussions with potential large customers on C-band. I believe that shortly after the satellite starts commercial operations, we will have some large contracts. Not 5MHz or something like that, but larger.
Amos-17 during testing. Credit: Boeing/Spacecom
On the Ka-band also — this is different from the Amos-6 Ka-band, resulting from lessons learned. Many are going in the Amos-6 design with multi-beam Ka-band in Africa today. Everyone is going there. But our Ka-band is different and I think most of it will be sold soon after commercial start.
We did not plan to fill the satellite immediately. I believe we will follow that path.
Is a 50% fill rate within a year of operations reasonable?
In general, for a satellite that is not a replacement but has to build an orbital position, 50% is aggressive.
What is the most promising market for Amos-17 in the first five years?
MNOs definitely will be big.
Africa is already competitive, and more competition is coming, including your former Amos-6 customer, Eutelsat, with its Konnect satellite, and Viasat in 2022.
My wish is that both Eutelsat and Viasat win each other’s business! We are a bit away from the crowd there, so that we don’t repeat the Amos-6 payload concept.
What do you mean by that?
A Ka-band multi-beam satellite is for a specific market and everybody will compete there for low prices to see who can produce the cheapest megabit. A lot of capacity is required, I just hope that people don’t bring in more capacity than is required.
What is the level of preorders you have for Amos-17?
It’s about $61 million.
How is business on the Amos-3 and Amos-4 satellites?
You have forgotten Amos-7.
I meant the native-born Spacecom assets. Amos-7 is leased from AsiaSat.
Amos-3 and Amos-4 are full right now. Amos-7 is in good shape. We need to have more customers in Africa on Amos 7 and we will have.
Is there any news on an Amos-8, which has been stalled by Israel’s debate over industrial policy?
That is a semi-political question. All the parties are still talking and there may be a decision soon. What we are looking for is to replace Amos-3. Amos-8 should have replaced Amos 2 or Amos 6 but now we are looking at another concept and a the replacement of Amos-3. We might have partners fore Amos-8. So we cannot make our own decision on this.
Your Amos-7 contract with AsiaSat goes to 2020. Will you renew it?
It is too soon to say because AsiaSat is the owner and we have not yet worked out with them the possibilities.

OneWeb gives up on Bpifrance export-credit financing for now, plans more equity raises in coming months

OneWeb Chief Financial Officer Tom Whayne. Space Intel Report photo
PARIS — Startup satellite broadband constellation startup OneWeb has given up on securing export-credit financing from France’s Bpifrance and will conduct several new rounds of funding from current and prospective equity investors in the coming months to complete its Phase 1 capex plan, OneWeb Chief Financial Officer Tom Whayne said.
Whayne conceded that the universe of investors willing to support OneWeb is not large given the company is building a greenfield infrastructure with no existing customers.
What Whayne did not say, but what has been said by bankers looking at OneWeb for months, is that the company has a risky business plan and a major investor — Softbank of Japan — whose own debt is classed as junk by the major rating agencies and whose role in OneWeb remains unclear.
OneWeb has raised $3.4 billion with the latest $1.25-billion round completed in March. To complete its first-generation network, what OneWeb calls Phase 1, of 650 low-orbiting satellites, the company needs around $5 billion.
Given that OneWeb has partnered with Airbus Defence and Space to build the OneWeb fleet, and with France-based Arianespace to launch the constellation, albeit mainly aboard Russian rockets from Russian territory, OneWeb sought the support of Bpifrance.
Offering broadband to the world’s poorest regions was never going to be an easy sell, and industry officials said the lack of customer commitments made it tougher. OneWeb has since tweaked is business model to go after vertical markets including aeronautical and maritime customers. But these markets already coveted by multiple other satellite operators.
One industry official said OneWeb’s hopes for Bpifrance support were all but abandoned months ago.
Addressing the World Satellite Business Week conference organized by Euroconsult here Sept. 9, Whayne said the search for new equity investors has already begun, as well as preparations to seek more capital from the existing equity owners.
“We are in active discussions with our existing investors as well as some new potential investors for an equity financing. We’ll do one in the next few months. We are also having conversations with a number of third-party debt providers and we’ll do some debt financing in the next few months. And we’ll do a fair amount of equity at some point next year.”
An easier-to-tell story once monthly launches start
Whayne said investor sentiment toward OneWeb should improve as the company starts launching satellites on a regular basis.
Six OneWeb satellites are in orbit and working well, the company has said. Monthly launches of 30-plus satellites each on Russian Soyuz rockets from three Russian spaceports are scheduled to start in December.
Stephane Israel, chief executive of Arianespace, said here Sept. 9 that Arianespace, on the strength of its agreement with Russian entities, was selected because of Russia’s demonstrated capability to launch Soyuz rockets at sustained high levels. OneWeb has contracted for 20 Soyuz launches, each carrying 30 or more 150-kilogram OneWeb broadband satellites.
“When we sit here next year, we will have half our constellation deployed,” Whayne said. “We think that will be very interesting for new equity investors. Export credit finance will not form the bedrock of our phase-one deployment, but it is something we are actively thinking about for our Phase 2 and Phase 3 deployments once we’re fully operational.”
OneWeb founder Greg Wyler has already been talking about what a more-capable next-generation system would look like.
But outlining tomorrow’s architecture does not do much for financing today’s constellation design.
Whayne said educating investors on the OneWeb story has been no easy task. He said the technical and financial due diligence has been “the most exacting I have ever seen.”
The fact that [several original OneWeb investors] stepped forward and continued to support the company in a big way — most having participated in multiple rounds — says a lot,” Whayne said.
“Given where we are in the deployment phase, and how much capital we have raised and how much we have to continue to raise, we cannot go tap many sources. It’s a very unique story — something for equity or debt providers willing to roll up their sleeves and understand the story.
“And like our existing investors, they have to be willing to get behind the fact that we have a decided, multi-year advantage versus anybody else that’s going to be a potential competitor, and have comfort int eh commercial opportunities that we have, and our business plan and our ability to defend it.”
OneWeb’s $1.25-billion equity round, which caused some original investors to write down the value of their stakes in the company, included $500 million from Softbank, $300 million from Grupo Salinas of Mexico, $200 million from Airbus, $98 million from Qualcomm and $27 million from the government of Rwanda.

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