Category: Broadband

LEO satellite constellations seen as a cyber security threat in vulnerable offshore industries

Joel Scanlan. Credit: ABC
WASHINGTON – The arrival of reliable, high-speed broadband from low-orbiting satellite constellations could lead to an increase in cyberattacks on ill-prepared industries seeking to adopt the new connectivity services.
 The offshore mining and maritime industries are especially vulnerable, said Joel Scanlan, a lecturer at the University of Tasmania in Hobart, because they are geographically dispersed, lack reliable and fast web access today and rely largely on legacy software with poor security.
 For maritime in particular, “there is a great business case to connect and monitor these vessels worth tens or hundreds of millions of dollars remotely, but they weren’t designed to be connected, and they often run code that is not particularly secure,” Scanlan said Oct. 25 during the International Astronautical Congress (IAC) here.
 For now, these industries make use of high-latency, low-bandwidth satellite connections in LEO and GEO for non-mission-critical tasks. But both the off-shore and maritime sectors are expected to transition to shore-based control and increased automation of shipboard systems when a spate of new broadband constellations proposed by SpaceX, OneWeb and Telesat are scheduled to come on line in the next few years.
 “Boats are still made with USB ports, and this is how malware gets in, with sailors charging their phones in the navigation system of the ship,” Scanlan said.
“Five years ago there was no connection at all. As an industry, maritime is not really ready, and yet they want to rapidly adopt the new LEO constellations.”
As an example of the challenges the maritime industry could face, Scanlan highlighted a June 2017 cyberattack that crippled Danish shipping giant Maersk. Dubbed “Petya,” the attack shut down information technology systems across multiple sites and business units.
“The biggest shipping company in the world, and every single server, the shore-based operations were all completely taken over by ransomware,” he said. “Happily, it didn’t affect any vessels because they weren’t connected. But jump to 2022-23, and can we say the same thing?”
As a result of the Maersk attack and other cyber incidents, the shipping industry has become more aware of the threat posed to its connected systems. To mitigate the potential consequences, a group of international shipping organizations has developed guidelines aimed at assisting companies in formulating their own approach to cyber risk management onboard ships. A compliance framework is in the works, but Scanlan said it is not expected to be in force before 2021.
“The vast bulk of this, while a good response, is very much in the context of the current systems and the current levels of network connectivity,” he said. “What is about to occur is a rapid paradigm shift in internet access, and not so much the status-quo rate of change.”
 He said ill-prepared industries will not be agile enough to respond in time to changes that new global high-speed broadband will bring to onboard network security.
A crewmember’s smartphone plugged into the ship’s console is the kind of thing the maritme industry wants to avoid. Credit: Joel Scanlan
 “I don’t know how broadly people truly understand what the impact of Starlink plus OneWeb could have, one to three years from now,” he said, referring to SpaceX’s proposed constellation of thousands of small internet satellites in LEO alongside OneWeb’s planned network of several hundred broadband spacecraft.
 “The industry may rapidly take on the new technology, as that will be fairly cheap and easy, but the existing systems and existing educational level about cyber risk is a bigger problem that will take longer to alter,” he said.
 In a 2018 maritime cybersecurity survey conducted by Jones Walker LLP, nearly two in five companies experienced an attempted or successful data breach in the preceding year. The survey, which polled 126 senior executives, technology officers and managers across the U.S. shipping industry, found that only a minority of companies have participated in government and industry initiatives designed to mitigate the risk of a cyberattack.
 But while higher bandwidth and more interconnected systems will no doubt increase the level of risk to maritime and other offshore operations, Scanlan says some sectors have managed the transition.
 “Migrating servers to the cloud, for example, changed the risk profile; many companies were fine, but we do also see a lot more data breaches these days than previously,” owing to multiple factors in addition to cloud computing, he said.
 The threat of cyberattack to the aeronautical sector, while less immediate, is another example of an industry mitigating risk, though Scanlan said few parallels can be drawn between ships and aircraft.
 “Cockpits in planes have duplicate controls to the implementation of duplicate controls that in a bridge on a ship are very different,” he said. “In aircraft they are truly redundant systems, but I have been on ships where they were merely copies and shared some resources, and thus were not truly redundant.”
 Much of the risk for any vessel, whether airborne or at sea, stems primarily from the crew and how well it is trained to avoid introducing malware into onboard systems via USB drives, mobile phones or other connected devices.
 “This, to my knowledge, has not been seen as much of an issue in aircraft, but several weeks or months at sea is very different to hours on a plane,” he said. “If SpaceX really does sell their antenna for ~$100 as has been suggested, the prospect of a crew member buying and setting up onboard is very real on a boat, but not a problem a plane would face.” 

Satellite broadband constellation startup LeoSat ends hunt for investors, shuts down; Thales Ka-band ITU filing at risk

Credit: LeoSat
UPDATE NOV. 13: This story was updated to reflect Telesat’s comment that it is not seeking equity investment from the future prime contractor for Telesat LEO.
PARIS — Startup satellite broadband B2B provider LeoSat has suspended operations — which in recent months has mainly consisted of looking for investors — and laid off all its staff in the wake of management and ownership changes at its two investors, Sky Perfect JSat and Hispasat.
LeoSat Chief Executive Mark Rigolle said both satellite operators have indicated that they have changed focus and could no longer support LeoSat under current circumstances. LeoSat’s efforts to close its $50 million Series A financing round have now ended.
The shuttering of LeoSat makes it all the more likely that the Ka-band filing registered with international regulators, which expires in January 2021, will be returned to the general pool and made available to others.
Rigolle said a central problem for LeoSat has been that the Ka-band radio frequency filing at the International Telecommunication Union (ITU), submitted through France’s National Frequencies Agency (ANFR), was registered to satellite builder Thales Alenia Space.
Because it owns the filing, Thales has long been the presumed prime contractor for LeoSat’s $3-billion, 84-satellite network, designed to deliver large amounts of data to corporate and government customers.
LeoSat’s B2B focus set it apart from other satellite broadband constellations including OneWeb, SpaceX’s Starlink and Amazon’s Kuiper. Telesat’s LEO system has a more B2B focus and relies less on a vast consumer market.
Mark Rigolle, chief executive, LeoSat. Credit: APSCC
“We built a successful book of business in terms of customer reservations but raising the capital has been a problem,” Rigolle said in a Nov. 12 interview. “The main reason for that was the amount we needed.” LeoSat had announced commitment letters totaling some $2 billion from prospective customers.
Industry officials have said for months that satellite operators Sky Perfect Jsat of Japan and Hispasat of Spain, which committed small amounts of capital to LeoSat in the expectation of much more to come, had been reluctant to accept a non-competed bid from Thales Alenia Space as system prime contractor. Both operators insisted that LeoSat reduce its capex requirements. The company was able to find a 15% savings but not much more.
LeoSat’s original agreement with Thales Alenia Space basically gave LeoSat access to the ITU-registered frequencies in return for a prime contract for Thales Alenia Space.
But unlike Airbus Defence and Space with OneWeb and industry officials’ description of current negotiations on a prime contractor for Telesat’s LEO — they say Telesat wants a large equity investment from LEO’s prime — Thales Alenia Space declined to invest in LeoSat equity.
Telesat on Nov. 12 said it is not seeking equity investment from its prime contractor.
Thales Alenia Space Chief Executive Jean-Loic Galle has said his company — prime contractor for the Iridium and Globalstar mobile communications constellations and the current-generation SES O3b broadband satellites — does not like to invest in its customers’ business.
That has not stopped Thales Alenia Space from making early-stage investments in the LeoStella satellite production facility with BlackSky in the United States, and in NorthStar Earth and Space Inc., a Canadian startup planning a constellation of satellites for Earth observation and space situational awareness from low Earth orbit.
But both these investments were relatively small compared to what LeoSat needed.
Rigolle confirmed that Sky Perfect JSat and Hispasat were not comfortable with a no-bid contract.
“Both these companies are used to managing competitive tenders,” Rigolle said. “That was a problem that we couldn’t solve. And then came the changes in management at both of them.”
Management changes at Hispasat, Sky Perfect JSat
Earlier this year, Red Electrica Corp., an electric utility, purchased a majority stake in Hispasat and more recently changed the company’s senior management.
Also earlier this year, Sky Perfect JSat named a new chief executive, whose early announcements about the company’s strategy made no mention of LeoSat.
Rigolle said both have confirmed that LeoSat is no longer a priority for them.
In October, LeoSat laid off its staff to reduce cash burn, Rigolle said. “Effectively, there is no one on the payroll anymore.”
Rigolle did not rule out a LeoSat revival but said it would be difficult given the January 2021 frequency deadline. He said other filings at the ITU are available for a LeoSat-type business, but whether LeoSat’s original investors would choose to pursue them is unclear.
He said France’s ANFR has made clear that it would not accept a “bringing into use” confirmation of the ITU frequencies on the bases of a small cubesat launched into LEO. “They want something more than that launched before accepting the filing,” Rigolle said of ANFR. Under current ITU rules, a cubesat operating in the same frequencies as the constellation could suffice, but ANFR apparently has a stricter policy.
“LeoSat is being mothballed,” Rigolle said. “At least we haven’t lost our shareholders hundreds of millions.”

OneWeb & SoftBank say Intelsat never had a contract to resell OneWeb capacity, seek dismissal of lawsuit

Credit: Intelsat
PARIS — OneWeb and SoftBank asked a New York court to dismiss Intelsat’s lawsuit alleging breach of contract, fraud and theft of trade secrets, saying Intelsat’s entire case is based on a contract that never existed.
Specifically, OneWeb and SoftBank said the “strategic cooperation agreement” under which Intelsat had exclusive rights to sell OneWeb services to four key vertical markets never came into effect because the parties were unable to agree to related purchase and service-level contracts.
Despite some 17 months of negotiations and several deadline extensions, Intelsat and SoftBank never agreed to the terms and conditions under which Intelsat would purchase OneWeb capacity from SoftBank. The latest deadline extension was March 31, 2018.
Until early 2019, SoftBank, a major OneWeb investor, had exclusive rights to sell OneWeb capacity worldwide.
Also left unsigned was an expected service-level agreement between Intelsat and OneWeb.
Credit: SoftBank
With a seat on OneWeb’s board following its $25 million equity investment in OneWeb, Intelsat signed off on both the arrival of SoftBank as global OneWeb capacity sales agent, and the termination of that agreement.
“Despite the passage of years since the parties entered into the 2016 Cooperation Agreement, Intelsat and SoftBank have never agreed upon a Purchase Agreement,” Intelsat and SoftBank said in their response to the Sept. 10 Intelsat lawsuit. “And Intelsat and OneWeb have never agreed upon an SLA,” or Service-Level Agreement. “Intelsat’s claim to exclusivity — in fact, any alleged right to purchase OneWeb services at all — depended on the parties reaching agreement on separate but interrelated” capacity-purchase and service-level agreements that were never concluded.
The two companies’ Nov. 8 petition that the Intelsat lawsuit be dismissed is accompanied by excerpts of OneWeb board meetings designed to show Intelsat’s full involvement in the OneWeb strategy, including the arrival of SoftBank as investor and global sales agent and the subsequent decision to terminate the sales deal even as SoftBank increased its investment in OneWeb.
Intelsat’s lawsuit makes occasional reference to negotiations with OneWeb over pricing and service-level details, but never mentions that these supplemental agreements were crucial to Intelsat’s rights to OneWeb capacity.
The Intelsat suit, for example, says Intelsat agreed to add $20 million to its initial $25 million investment into OneWeb, but that the fresh investment was “conditioned… upon the parties reaching a signed contract and concluding their negotiations, which had commenced between OneWeb and Intelsat n 2015 and 2016 and were later continued between Intelsat and SoftBank in 2017 and 2018.”
At another point, Intelsat’s lawsuit says that in April 2018, “the parties had reached agreement on many of the material terms, including pricing,” but that the negotiations with SoftBank were “put on hold” before an agreement was reached.
Intelsat’s suit against OneWeb and SoftBank, filed in the New York State Supreme Court September, alleges breach of contract, fraud and theft of trade secrets: http://bit.ly/2kFXJP3
The Intelsat legal action was triggered by what Intelsat characterized as duplicitous negotiations by OneWeb with prospective customers active in the four verticals to which Intelsat claimed exclusive OneWeb sales rights — aviation, maritime, oil and gas and government. 
Intelsat added fraud and breach of confidentiality to its claim without detailing the events that would buttress the claim.

As U.S. C-band auction proposal nears home stretch, Eutelsat proposes new formula for dividing the proceeds

Credit: FCC
PARIS — Eutelsat told U.S. regulators that the proposed auction of satellite C-band spectrum should return “up to 50%” of its proceeds to the U.S. Treasury, with the rest being distributed to the C-band satellite operators based on a formula that has been rejected by the C-Band Alliance.
Instead of dividing the proceeds based on 2017 C-band revenue in the United States, as the CBA has proposed, Eutelsat would employ a more complex formula that takes into account the amount of capacity each operator has in orbit and the age of its satellites, regardless of whether this capacity has any customers.
In a Nov. 7 letter summarizing its Nov. 5 meeting with the U.S. Federal Communications Commission (FCC), Eutelsat says the CBA’s formula “would introduce unnecessary legal risk.”
“[R]regardless of revenue from CONUS C-band customers, C-band satellite operators are relinquishing spectrum, will face a fundamental change to their authorizations, and have made sunk capital investments in satellite capacity to serve the United States, which they will be required to abandon if the Commission moves forward with this transition,” Eutelsat said.
Here’s how Eutelsat proposes to divvy up the proceeds from an auction of C-band spectrum. With a younger fleet, Eutelsat would stand to benefit from this formula compared to the C-Band Alliance’s proposal to base distribution on 2017 revenue from each operator’s U.S. C-band business.
Industry estimates are that Intelsat and SES together generate a bit more than 90% of the satellite revenue from C-band business in the United States, with Eutelsat and Telesat dividing the rest.
For Eutelsat, abandoning rights to spectrum to which each operator has equal access should be compensated regardless of whether the operator is managing much of a business. The investment counts, too, not just the revenue, according to Eutelsat.
Eutelsat’s fleet over the Americas is younger than the other CBA members, and weighting newer satellites more than older ones also would produce a more favorable outcome.
Eutelsat left the CBA in September, citing numerous issues including an undefined complaint about the proposed revenue share — which CBA members said Eutelsat had agreed to, in writing, before it changed its mind.
Eutelsat: The U.S. Treasury get up to 50% of the C-band auction proceeds
Another issue Eutelsat raised to this FCC, this time in an October meeting, was that the “voluntary contribution” to the U.S. Treasury not exceed 50% of the proceeds, which most observers believe will total at least several billion dollars as 5G terrestrial operators seek mid-band spectrum for their network deployments.
Intelsat Chief Executive Steve Spengler told an investor call that he had never heard the 50% figure being raised and could not explain its origin.
The Eutelsat Nov. 7 letter suggests that Eutelsat itself is the source for the 50% figure.
The CBA has said that clearing 300 MHz of the 500 MHz now allocated to satellite transmissions between 3.7 and 4.2 GHz would cost about $3 billion in launching eight new satellites, financing the introduction by broadcasters of new signal-compression techniques and installing filters on thousands of customer antennas.
With relatively little business to protect in the United States, Eutelsat has reason to propose to the FCC that each operator handle its customers’ transition on its own, without the need for CBA involvement.

Viasat: Consumer broadband ARPU up 17%; in-flight connectivity revenue could be $3 billion a year by 2028

Credit: Viasat
LONDON — Satellite broadband hardware and service provider Viasat Inc. asked investors to picture a world where Viasat’s current 29% share of the in-flight connectivity market in U.S. narrow body aircraft is extended worldwide while the global aircraft fleet doubles and passenger traffic increases by 2.3x.
And the percent of IFC-enabled aircraft rises considerably from today’s 30%.
“It’s a very big addressable market,” Viasat Chief Executive Mark D. Dankberg said. “IFC alone can be a multibillion-dollar annual business during the life of Viasat 3,” the company’s three-satellite 1-Tbps-per-satellite program scheduled to launch in 2021 and 2022 for global coverage. “At 30% globally, 2028 revenue would be $2 billion to $4 billion annually.”
Viasat said its U.S. narrow body market share was 21% a year ago and just 10% in September 2016, making it the only one of the four established IFC providers to have increased market share in the past three years.
Viasat’s comparison is with Gogo, still the market leader but now with less than 50% of the installed base; Global Eagle Entertainment (GEE) and Panasonic Avionics.
Including 85 Boeing 737 MAX aircraft, which have been grounded as regulators evaluate its safety, Viasat has 1,438 aircraft fitted with its IFC system, with another 700 under contract. That’s a 51% increase from a year ago.
Credit: Viasat
In addition to its own satellites, the company uses capacity provided by partners in Europe and the Asia-Pacific in advance of the Viasat-3 arrival.
IFC is inside Viasat’s Satellite Services division, which includes fixed consumer broadband and the company’s expanding business providing Wi-Fi hotspots in emerging markets.
Viasat said that as of Sept. 30, its U.S. consumer broadband business counted 587,000 subscribers, a figure that hasn’t grown much in the past couple of years but is expected to return to growth when the first Viasat 3 satellite, to be stationed over the Americas, arrives in 2021.
But while the subscriber count has languished, Viasat has been increasing its per-subscriber yield. As of Sept. 30, monthly subscriber revenue was $86.94, up 17% from a year ago.
In a Nov. 7 investor call, Dankberg said Viasat has been able to transfer some Viasat-2 capacity from lower-demand regions to regions where it is more likely to find the high-dollar subscriber that Viasat prefers.
Although some bandwidth is lost in the process, he said the trade is favorable given the appetite subscribers in high-demand areas for the premium service.
Viasat has not disclosed what orbital slots it will use for the Viasat 3 satellites over Europe, the Middle East and Africa; and the Asia-Pacific.
Industry officials said Viasat has been leasing a satellite from Avanti Communications of London to occupy different orbital positions for the regulatory minimum period before moving to another position to perform the same function.
But beyond the company’s current partnerships with Telebras of Brazil, NBN in Australia and China Satcom, Viasat is going it alone for Viasat 3 in these new regions. The company’s consumer and IFC broadband partnership with fleet operator Eutelsat is winding down. Eutelsat ordered its own high-throughput satellite instead of sharing a Viasat 3.
“We are in a temporarily stable situation,” Dankberg said of the Eutelsat relationship. “We have an accommodation with them. They use our network, we use their satellite. It’s probably not the long-term solution. We are working with them on what the end state will be.”
More generally, he said the plan for the global Viasat 3 network is “to bring the satellites to market ourselves,” with regional partnerships.
Viasat did not discuss any implications for its IFC business with China Satcom of the loss of the Chinasat 18 satellite earlier this year: http://bit.ly/345bhpb

C-Band Alliance warns of legal action against any FCC-led auction, says Eutelsat is on board

Credit: C-Band Alliance
LONDON — The C-Band Alliance of satellite operators seeking U.S. regulatory approval for a CBA-managed auction of satellite spectrum told the U.S. Congress that an FCC-run auction — an alternative some CBA opponents have proposed — would face legal challenge from many quarters, starting with the CBA itself.
In a Nov. 7 letter to the U.S. House Subcommittee on Communications and Technology, the CBA it doubted whether the U.S. Federal Communications Commission (FCC) had the authority to reclaim spectrum licensed to satellite operators and distribute it to 5G terrestrial wireless operators.
“Several parties, including the CBA, have raised concerns that the FCC lacks the authority to confiscate C-band spectrum without compensating the satellite operators that currently use the spectrum.”
Signed by CBA Executive Vice President Peter Pitsch, the letter said proceeds from an FCC-managed auction to 5G bidders would by law go directly to the U.S. Treasury.
That being the case, the auction winners “would likely need to directly negotiate and fund [spectrum] clearing with the multiple C-band operators and thousands of Earth stations.”
The letter’s was ostensibly intended to correct what CBA said were inaccurate statements made by witnesses at an Oct. 29 subcommittee hearing. It reasserts its previous message that China is advancing quickly in 5G and could overtake the United States if U.S. regulators did not act quickly. 
The letter also addressed the “holdout problem” that results from the fact that any auction would need to compensate all eligible C-band spectrum license holders, since the licenses grant each of them access to the full 500 MHz of spectrum, 3.7-4.2 GHz, covered by their operating licenses.
That means all eligible satellite operators with C-band licenses in the United States need to be compensated.
The CBA now has three members — Intelsat, SES and Telesat. Fleet operator Eutelsat has left the alliance, raising the issue of whether Eutelsat could itself constitute a “holdout” and complicate a CBA-managed auction.
But while Eutelsat has quit the alliance, seeking a larger share of the CBA-led auction proceeds, it has not challenged the CBA’s position.
In an Oct. 3 letter to the FCC, Eutelsat said its chief executive, Rodolphe Belmer,  “stressed the legitimacy of the CBA to act as the transition facilitator and would therefore agree to rejoin for the transition stage of the process.”
While Eutelsat has questioned CBA’s offer of a “voluntary contribution” to the U.S. Treasury of a share of the proceeds — and has said any contribution should not exceed 50% of the proceeds net of costs to transition customers to a small slice of the C-band spectrum — it is not opposed to it.
“Mr. Belmer clearly expressed his agreement to a significant contribution,” the Eutelsat letter to the FCC said.
Intelsat has said it has no idea where Eutelsat came up with the 50% figure, and has warned Eutelsat that staying out of the CBA could compromise its rights to the eventual auction proceeds: http://bit.ly/2pnHecE
Credit: C-Band Alliance
Intelsat said the CBA’s latest proposal of clearing 300 of the 500 MHz, including a 20-MHz guard band, would cost the satellite operators about $3 billion to modify broadcast customers’ Earth stations and launch eight new satellites — four each from Intelsat and SES as part of a planned joint procurement by the two companies.
Aside from launching satellites to allow current C-band customers to continue their current programing with 40% less spectrum, CBA said it would need to design and install some 100,000 filters for 35,000 antennas in the continental United States and implement new-generation signal-compression technologies.
There is no other scenario, including an FCC-managed auction, that would assure this investment would be made, CBA said.

OneWeb delays 34-satellite launch to late January, moves to dismiss Intelsat lawsuit

OneWeb Satellites’ facility in Florida. Credit: OneWeb
LONDON — OneWeb has delayed the launch of the first batch of satellites built at the new Florida facility to late January to give time for additional checks on the spacecraft before shipment to Russia’s Baikonur Cosmodrome in Kazakhstan.
Separately, OneWeb and its principal investor, SoftBank, said they would move to dismiss a lawsuit filed against it by Intelsat alleging fraud and theft of trade secrets and breach of contract: http://bit.ly/2kFXJP3
The launch of 34 150-kilogram OneWeb satellites aboard a Russian Soyuz rocket from Baikonur had been scheduled for mid-December.
OneWeb launched an initial six-satellite batch in February from Europe’s Guiana Space Center, on the northeast coast of South America, as part of a 21-launch contract with launch-service provider Arianespace of Europe.
These satellites were part of an initial production run of 10 spacecraft built at Airbus Defence and Space’s Toulouse, France, production facility. Airbus is a 50% owner, with OneWeb, of OneWeb Satellites.
The rest of the 648-plus satellite initial constellation of 150-kilogram Ku-band broadband satellites is being manufactured at a new OneWeb Satellites facility in Exploration Park, Florida. OneWeb said the launch delay was decided to give the company more time to make the necessary verifications on these satellites.
The company has told prospective investors and customers that it would be conducting Soyuz launches with Arianespace on a monthly basis starting in December, and that initial coverage of the Arctic region, including Alaska, would start in 2020.
Arianespace officials have said they are confident that Soyuz launches, from several Russian-controlled spaceports, can maintain a monthly OneWeb launch cadence in 2020.

KVH’s bundled maritime satcom service advances, as do costs of moving to HTS satellite fleet

Credit: KVH
PARIS — Maritime satellite connectivity hardware and service provider KVH Industries reported a doubling of revenue from its no-commitment, connectivity-as-a-service AgilePlans offer, introduced in April 2017, but cautioned that the business will continue to incur operating losses as it moves from conventional to high-throughput (HTS) satellites.
Similar to what satellite broadcasters face in the transition to HD format, KVH will need to maintain its current legacy network of satellite capacity, contracted with Viasat Inc. and others, until it moves its customer base to HTS.
The operating loss includes a $2.2 million reserve, booked in the April-June quarter, on its TracPhone V-IP product line, which is being dropped as KVH focuses on the HTS service. Credit: KVH
“We expect to incur substantial losses in the near future as we continue to bear the expenses of maintaining two satellite networks during the transition of our mini-VSAT customers” to HTS, KVH said in an Oct. 30 filing with the U.S. Securities and Exchange Commission (SEC).
KVH said it is also seeing an increase in customers cancelling or suspending service, especially for oil-service vessels with the drop in crude-oil prices.
 
For the three months ending Sept. 30, KVH reported a 15% increase in mini-VSAT broadband subscribers and an 11% increase in associated revenue compared the same period a year ago.
Credit: KVH
For the nine months ending Sept. 30, KVH reported total mobile connectivity revenue of $92 million, up 6.6% from a year earlier. Services accounted for 74% of that revenue and were up 8%. Product sales, expected to decline as AgilePlans takes hold, were up 2%.
The company said AgilePlans now accounts for 24% of KVH subscribers and were 70% of is commercial maritime VSAT shipments in the three months ending Sept. 30.
“This is remarkable, considering that we launched AgilePlans just over two years ago,” KVH Chief Executive Martin Its van Heyningen said in an Oct. 30 investor call. He said he expected that AgilePlans take-up among subscribers would remain around 70%, reflecting the fact that not all customers want that kind of service.
“We still have customers who prefer to purchase” the VSAT hardware,” Kits van Heyningen said. “We don’t really care as long as we get the subscriber.”
KVH is introducing two new services, a lower-bandwidth IoT service, called KVH Watch, for remote equipment monitoring and maintenance; and the TracVision UHD 7 service that employs KVH’s Triad antenna that receives Ku- and Ka-band signals from three DirecTV satellites at once.
The IoT service is entering service trials with inaugural customer Kongsberg Digital.
KVH said the cost of sales in its mobile connectivity division increased 9% in the three months ending Sept. 30, mainly because of increased airtime cost as it adds HTS satellite capacity.
KVH launched its HTS service with satellite fleet operators Intelsat and Sky Perfect JSat. Its global footprint includes capacity from Telesat Canada, EchoStar, Hispasat, SES, Eutelsat, Nilesat, Measat and Indosat of Indonesia.
The company is a reseller of mobile satellite services provided by Iridium and Inmarsat, even as it competes with both those companies for IoT and broadband customers.
In addition to these two companies, KVH’s competitors include Marlink, Speedcast and Global Eagle Entertainment.
Competitors on the hardware side include Intellian, Cobham Satcom, Orbit Communications Systems, Jotron AS, KNS and AddValue.
The company said it was ready to absorb the impact on operating margins on behalf of securing a global HTS footprint.
“We intend to continue to invest in the mini-VSAT broadband network on a global basis,” it said in its SEC filling. “[W]e would plan to seek to acquire additional satellite capacity from satellite operators.. and hire additional personnel.”

Rumors about Arianespace v. SpaceX launch of small GEO satellite indicates how desperate market could become

Ovzon-3, a Maxar Technologies all-electric SSL-500 Legion satellite platform, is expected to weigh 1,500 kilograms at launch. Credit: Maxar
WASHINGTON — The August announcement by startup Swedish satellite operator Ovzon AB that it had moved its first satellite from a SpaceX Falcon Heavy in 2020 to an Arianespace Ariane 5 rocket in 2021 created a big splash for such a small spacecraft.
The Maxar Technologies-built Ovzon-3, an all-electric satellite, is expected to weigh 1,500 kilograms at launch.
Ovzon has said that a direct-go-GEO launch on a Falcon Heavy would have meant starting service sooner than the GEO transfer-orbit drop-off provided by Ariane 5, but Ovzon has said the satellite’s electric propulsion will still give it a 20-year life: http://bit.ly/2U0XivR
For Europe’s launch-service provider, there is no sweeter victory than one over SpaceX. Because a 1,500-kilogram payload is not always a comfortable fit for Ariane 5 and its need to find two compatible passengers going to GTO orbit, rumors began circulating.
What promises did Arianespace make to steal this customer away from its arch-rival?
Officials affiliated with Arianespace competitors — not just SpaceX, it was also International Launch Services (ILS) — suggested that Arianespace guaranteed Ovzon an on-schedule launch even if that meant flying Ovzon-3 solo on the Ariane 5.
That such a rumor would be believed is a measure of how dismal the GEO-satellite market looks for all launch service providers in 2020 and 2021. SpaceX at least has its constellation of low-orbiting Starlink broadband satellites to fill its manifest in those years.
But even SpaceX, which has always been a price leader, has been offering missions at surprisingly low cost to customers. One prospective customer said it was offered a Falcon 9 launch to low Earth orbit for a 900-kilogram satellite for $40 million, as the mission’s main customer, as an incentive to lure the customer from the PSLV rocket operated by India’s ISRO.
For Arianespace, offering to launch a 1,500-kilogram satellite a dedicated Ariane 5 launch would not be well-received by European Space Agency (ESA) governments, which are preparing a fresh set of Ariane 5 and Ariane 6 support programs as Arianespace transitions from Ariane 5 to Ariane 6 between 2020 and 2022-23.
“We would be, let’s say, very surprised if that were the case,” said one European government official.
In an Oct. 22 briefing here during the International Astronautical Congress (IAC), Arianespace Chief Executive Stephane Israel dismissed the Ovzon-3 solo-passenger idea.
“I can strongly deny that,” Israel said. “It’s a dual launch, and there is absolutely no ambiguity about that. It’s a classical dual launch, with a co-passenger. I am surprised that people would say that.”
Ovzon-3 aside, the near-term manifest for Arianespace has never been less transparent. The company has scheduled the launch of two telecommunications satellites — the Egyptian government’s Tiba-1 and the Inmarsat GX-5 telecommunications satellites — for an Ariane 5 scheduled for Nov. 22.
Satellite delays make predictions of launches after that impossible, Israel said. Will there be an Ariane 5 launch in December?
“It’s not the most probable scenario, but let’s wait and see,” Israel said. “I can see pretty clearly for November, but December is too far away.”
Arianespace has a mid-December launch planned of a Soyuz rocket from Russia’s Baikonur Cosmodrome carrying around 34 OneWeb broadband satellites to low Earth orbit.
It will be the second of 21 OneWeb Soyuz launches contracted with Arianespace. Most will occur from Russian spaceports, but the first, last February, and several others are also possible from Europe’s Guiana Space Center in French Guiana, on the northeast coast of South America.
A second Soyuz launch in December, this one from the European spaceport, could carry Italy’s Cosmo Skymed-2 radar Earth imaging satellite along with ESA’s Cheops exoplanet-hunting satellite.
The UAE’s Falcon Eye 1 satellite is shown here in prelaunch preparation at Europe’s Guiana Space Center. The satellite was destroyed in Vega launch failure, putting pressure on Arianespace to launch the identical Falcon Eye 2 as soon as possible. Credit: Arianespace
Arianespace’s Vega rocket has been grounded since its July failure carrying the United Arab Emirates Armed Forces’s Falcon Eye 1 optical reconnaissance satellite. An identical Falcon Eye 2 is ready for launch, but Israel said it remains uncertain as to when this will occur.
The Falcon Eye spacecraft were built by Airbus Defence and Space and Thales Alenia Space, with Airbus acting as Arianespace’s formal customer for the launch.
Vega is expected to return to flight in March. But whether the launch will carry the second Falcon Eye, Spain’s Seosat-Ingenio optical Earth observation satellite, or the 42 satellites sharing the inaugural Small Spacecraft Mission Service (SSMS) is still not certain.
Arianespace and ESA are eager to fly the first SSMS mission given the remarkable growth in demand for smallsat missions, especially at a time when the market for large satellites is in a prolonged slump.
“We have different options and we want to discuss with customers to see what their best scenario is for them,” Israel said. “SSMS is a possibility.”
“for Falcon Eye 2, our direct customer is Airbus, and the UAE is their customer. We are 100% mobilized to offer the best solution for the UAE. Falcon Eye 2 is a very important mission and it is obvious that we have to offer different options to the UAE. They will choose the one in their best interests.”

For Eutelsat, solar array failure may have outsize effect on this year’s financial forecast

Eutelsat Chief Financial Officer Sandrine Téran. Credit: Eutelsat
PARIS — Satellite fleet operator Eutelsat said it should know by late November whether the solar-array defect on the Eutelsat 5 West B satellite launched Oct. 9 will result in a total or partial loss.
The company said that the 5 West A satellite, which 5 West B was designed to replace, has enough fuel to remain in three-axis stabilized orbit until December. Eutelsat said multiple options are being considered in the event of the definitive loss of 5 West B, including keeping the 5 West A on station, but in inclined orbit, which would affect some, but possibly not all, of the satellite’s current revenue base.
The company said it was also uncertain as to whether the 5 West B anomaly, which it did not describe, could affect the other solar array.
“We have not yet identified the source of the incident,” Eutelsat Chief Financial Officer Sandrine Téran said in an Oct. 30 investor call on Eutelsat’s financial results for the three months ending Sept. 30.
The 5 West A generated 30 million euros ($34.1 million) in revenue for the 12 months ending June 30, 2019. The 5 West B, whose platform was built by Northrop Grumman, was to replace this and to add the equivalent of 7 million euros per year over 15 years in a contract with the European Commission to host a GNSS positioning, navigation and timing payload to overlay services provided by the U.S. GPS and Europe’s Galileo medium-Earth satellite constellations.
Téran said 5 West B was insured for up to 173 million euros.
Industry officials said a satellite like 5 West B likely would be unable to perform most of its revenue-generating function if one of its two solar arrays remained out of service.
Asked whether Eutelsat would expect to declare 5 West B a total loss in that event, Téran said: “This is one of the questions being looked at by the inquiry. We need to understand the source of the incident to assess if it may have an impact on the second one [solar array].”
For the three months ending Sept. 30, a performance “slightly below expectations.” Credit: Eutelsat
The loss of 37 million euros in revenue for the year ending June 30, 2020 may be enough to affect Eutelsat’s forecast of stable performance in its broadcast segment, which accounts for 62% of Eutelsat’s total revenue.
That is all the more true given the mixed results for the first three months of Eutelsat’s current fiscal year. The broadcast division reported a 1.7% decline in revenue following a contract termination in Zimbabwe and the return, by a Russian customer, of two transponders. Eutelsat Deputy Chief Executive Michel Azibert said the Russian capacity is likely to be resold, minimizing that impact.
Eutelsat’s broadband segment — which along with IoT service is Eutelsat’s stated future growth engine — was down 3.3%. The Ka-band Konnect satellite over Africa, which had been set for launch this year, has slipped to early 2020, reducing its contribution to 2019-2020 fiscal-year revenue.

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