PARIS — Satellite fleet operator SES has awarded Boeing a contract to build seven satellites as part of SES’s second-generation medium-Earth-orbit constellation, formerly known as O3b, according to industry officials.
The selection of Boeing Satellite Systems International is a blow for O3b’s incumbent prime contractor, Thales Alenia Space of France and Italy, which built all 12 O3b satellites currently in orbit and has eight more under construction.
It is also something of a revenge for Boeing after Thales Alenia Space’s win of a contract to build London-based Inmarsat’s fifth Global Xpress Ka-band broadband satellite. Boeing built the first four Global Xpress spacecraft.
“The selection of Boeing is an illustration of how different the second-generation O3b will be compared to the first,” said one industry official. “SES is heading in a different direction with this. These are very high-throughput satellites, making it a terabit-per-second constellation.”
The SES-Boeing contract is expected to be announced in Paris on Sept. 11 as part of Euroconsult’s World Satellite Business Week.
SES has targeted the U.S. government, and specifically the U.S. Department of Defense, as a major future customer for O3b, but industry officials said there is no take-or-pay element to the SES-Boeing contract. Boeing’s Global Xpress contract with Inmarsat includes a take-or-pay provision under which Boeing guaranteed a certain volume of U.S. government business to Inmarsat and must pay Inmarsat from its own pocket if the volume falls short of actual sales.
Each Boeing satellite is expected to weigh some 1,200 kilograms at launch — much heavier than the current 700-kilogram O3b spacecraft despite the use of an all-electric propulsion system. The seven satellites are scheduled for launch starting in 2021.
The current constellation operates in an equatorial orbit some 8,000 kilometers in altitude — an unusual orbit that trains O3b’s Ka-band spot beams on territories around the equator to provide broadband connectivity.
The second-generation version is designed to expand into a wider swath of Ka-band from the same orbit, with a second orbit to provide near-global coverage from higher inclination relative to the equator. It would fly at the same approximate altitude, but with these future satellites at a 70-degree inclination relative to the equator.
SES has told the U.S. Federal Communications Commission (FCC) that it would launch up to 24 satellites as part of the second generation in equatorial orbit. Boeing’s is the first seven of these. The company has said its higher-inclination system would feature up to 16 satellites.
One industry official said that, in keeping with a recent industry trend of forcing satellite builders to accept tougher contract terms and conditions, Boeing’s contract payments will be back-loaded.
SES has been telling investors for the past year that medium-Earth-orbit offers a major growth opportunity that will not cannibalize the geostationary satellites’ revenue stream. While promising investors that its capital spending will drop in the coming years, SES has announced plans to spend 1.43 billion euros ($1.63 billion) on placing new satellites into orbit between 2017 and 2021, with medium-Earth orbit taking a sizable share of the total.
SES Chief Executive Karim Michel Sabbagh has said the O3b architecture can be scaled to meet demand without locking the company into a commitment over 15 years as is the case for large geostationary-orbit satellites. Sabbagh has said medium-Earth orbit offers many of the advantages of low-orbiting systems, including low signal latency, without the drawback of having to cover the entire world and thus wasting part of each satellite’s orbit over unpopulated areas.