Category: Mobility

European Commission primes Defence Fund pump with cyber, space situational awareness, satcom funding

Credit: European External Action Service
PARIS— The European Commission, in what it hopes will spur approval of its proposed seven-year, 13-billion-euro ($14.9-billion) European Defence Fund, has earmarked spending more than 200 million million euros for work in 2019-2020 on projects including space situational awareness (SSA), positioning, navigation and timing and secure communications.
The funding will be added to the relatively modest amounts already being spent on pooling military satellite telecommunications bandwidth needs and a similarly organized effort in SSA using existing European facilities.
The European Defence Fund has won initial approval from the the organizations that must approve it — the commission, the European Parliament and the council of European heads of state. But there has been no final agreement as negotiations continue both on its size and whether it can fit into the overall seven-year European Union budget.
The work approved March 19 is for co-funded projects that, if all are subscribed, carry a value of up to 525 million euros, the commission said.
Of this figure, 25 million euros has been set aside for a dedicated research effort on “Electromagnetic Spectrum Dominance and Future Disruptive Technologies.” The use of the word “dominance” suggests that language commonly employed in Washington has made its way across the Atlantic.
Commission officials have said that space applications will be knitted into both the defense and civil research areas in the seven-year budget, and that it’s up to Europe’s space sector to insert itself into consortia leading project bids.
The 2019-2020 work includes:
— Cyber and space situational awareness and early warning and maritime surveillance, budgeted at 182 million euros. The space-based SSA and satellite communications piece of this will have a budget of 22.5 million euros.
— Air or space intelligence, surveillance and reconnaissance and tactical drones, with a budget of 43.7 million euros.
— Positioning, navigation and timing and satcom, budgeted at 44.1 million euros.
The European Defence Agency will begin issuing calls for proposals on the the early research topics, with a deadline of late August for proposals. Grants could be agreed to by the end of 2019. A second series of proposals will be issued in June, with grants awarded by the second half of 2020.
European Parliament elections are scheduled for May 23-26 in the 27 European Union nations, assuming the United Kingdom’s planned exit means it does not take part.
For both the civil and defense budgets, commission officials have said they wanted to get as much support as possible confirmed before the elections in the event that the new parliament and commission are less enthusiastic about defense spending and space technology.

FCC’s O’Rielly to cable broadcasters: Don’t get greedy on C-band; ties issue to unlicensed Wi-Fi spectrum

FCC Commissioner Michael O’Rielly. Credit: C-Span video
PARIS — U.S. Federal Communications Commissioner Michael O’Rielly told a U.S. cable broadcast group that its concerns about compensation for lost C-band spectrum in a propose satellite operator-managed clearing were valid but could only be resolved if the FCC approves the proposal.
He also said any clearing of the 3.7-4.2 GHz C-band spectrum now used by satellite operators “will need to be accompanied by efforts to expand unlicensed services into the corresponding uplink band at 6 GHz.
“This spectrum, along with 5.9 GHz, provides the best chance o expand current Wi-Fi and other unlicensed operations,” he said.
Addressing the ACA Connects — formerly American Cable Assn. — conference on March 20, O’Rielly sought to reassure cable networks that their legitimate worries about the Intelsat–SES–Eutelsat–Telesat proposal have been heard.
“If you don’t get greedy or seek unfair enrichment in the allocation, your concerns will have to be fully addressed,” O’Rielly said.
The FCC has made no commitment about when it will decide the issue, but most industry observers expect a decision sometime this year. Outstanding issues that have been raised in recent months include how current C-band spectrum users will be compensated, by how much, and who makes the decision.
The C-Band Alliance of satellite operators has committed itself to compensating customers, including retrofitting thousands of antennas and launching additional satellite capacity for that portion of their mid-band C-band allocation that remains to them, if the alliance’s proposal wins FCC approval.
The current C-Band Alliance proposal is to cede 180 MHz of spectrum, plus a 20-MHz guard band, for terrestrial wireless use as the United States adopts 5G technology.
The alliance has stressed that whatever else may be said about its proposal — and a lot has been said — there is little doubt that its mechanism of private sales to terrestrial network bidders will clear the band more quickly than any alternative.
The alliance has also emphasized the fact that given the FCC’s intention to make a slice of this bandwidth available to terrestrial wireless networks, the alliance-proposed scenario is the most likely one to produce compensation to current C-band users.
C-Band Alliance response to O’Rielly
In a statement issued after O’Rielly’s comments, the alliance said:
“With a huge effort and heavy investments, based on newly launched satellites, tens of thousands of filters on Earth stations, re-groomed spectrum and protecting guard band, we conclude that 200 MHz is what can be delivered for 5G in 18 to 36 months from a final FCC order. The remaining portion of the band is needed for broadcasting.
“The CBA proposal is by far the best and fastest way to clear C-band spectrum for the roll out of 5G in the US. All other proposals are technically unfeasible, unrealistic, legally impossible or far too slow, if not impossible to implement. It would, for example, be extremely difficult to deploy a solution that results in cities having more cleared spectrum than suburban and rural areas. The reason is that the C-band signals blanket the US ubiquitously, and cannot be ‘turned on or off’ in certain distinct zones. We are pleased that the FCC understands that complexity and supports our goal to protect the video ecosystem while clearing a good portion of the spectrum for 5G. We look forward to explaining the technology realities to all stakeholders so that everyone understands the challenge in clearing this spectrum and the unique advantages and benefits of the CBA solution.”
O’Rielly did not lean one way or another in his remarks, but said: “The open issues pertain to the appropriate mechanism and time frame to make the process happen. I ask that you keep an open mind and work with the commission to bring this to a speedy conclusion.”
O’Rielly implied that the FCC could select a band-clearing formula without having settled all the legitimate compensation issues beforehand.
“For instance, many have asked for greater specifics about how the ‘market-based’ or C-Band Alliance proposal can protect incumbents,” he said. “Those details will have to be fleshed out if or when the commission moves forward with that or a similar approach.
“The key is not having a knee-jerk reaction in opposition while the complex issues are being considered and resolved.”

Canadian government cites LEO constellations as part of 13-year, $1.25-billion broadband proposal

Credit: Kativik Regional Government
PARIS — The Canadian government’s 2019 budget proposal features a nearly Australian-scale commitment to full broadband coverage in Canada’s remotest areas by 2030 and a 13-year program specifically evoking low-Earth-orbit satellite constellations as an enabler.
Announced March 19 by Finance Minister Bill Morneau, the plan features a 13-year Universal Broadband Fund with a budget of 1.7 billion Canadian dollars ($1.25 billion).
“The government will look to top-up the Connect to Innovate Fund program and to secure advanced, new low-latency low Earth orbit satellite capacity,” the document says. “This process will be launched in the spring [of this year] and will help bring reliable high-speed internet access to even the most challenging rural and remote homes and communities in Canada.”
While it might seem remarkable that a government trying to secure access to remote Canadian communities should be concerned with low latency, the wording couldn’t be more perfect for satellite fleet operator Telesat, which is designing a global broadband constellation called Telesat LEO.
Telesat Chief Executive Daniel S. Goldberg said in a March 19 statement that Telesat LEO “will revolutionize how Canadians, now matter whether they are located, experience and leverage the internet.”
The budget document said Canada would spend some 5.5 billion Canadian dollars over 10 years to assure broadband access for all Canadians.
Part of the funding would be through cost-sharing efforts such as Connect to Innovate, in which the federal and provisional governments take equal shares in specific projects, such as a 2018 project in Quebec using undersea cable and fiber to connect remote communities, with a total budget of 125 million Canadian dollars. The Kativik Regional Government also contributes to the project financing.
The goal is to have 95% of Canada’s population of 37 million people connected with broadband speeds of 50 Mbps downlink and 10 Mbps uplink by 2026, with the remaining 5% covered by 2030.
Separate efforts by the Canadian Infrastructure Bank to offset capex in rural/remote broadband infrastructure is also foreseen.
The only equivalent program among nations of any size is the government of Australia’s NBNCo., which is managing a government-sponsored infrastructure including fiber, microwave and satellite links, with the satellite connectivity reserved for the remotest addresses. Two large Ka-band satellites are in geostationary orbit for the purpose.
Reaching Canada’s Far North would be a challenge for satellites over the equator, but there are several proposals being made for a network of three or four satellites in highly elliptical orbit, including Space Norway, that would serve the region.
The government of Norway and the U.S. Air Force have agreed to invest in Space Norway. Canada’s armed forces have been in discussions with the project’s sponsors.
The OneWeb LEO constellation, whose first satellites are in orbit, is also focusing on Arctic broadband connectivity.
Telesat LEO is a multibillion-dollar undertaking whose financing has not been secured. The company reported 903 million Canadian dollars in 2018 revenue, with EBITDA equivalent to 83% of revenue.
Telesat’s debt ratio as of Dec. 31 was 4.02 times consolidated EBITDA.
Telesat’s 62.7% shareholder, Loral Space and Communications of New York has been trying for years to monetize its investment through a Telesat stock offering but has been blocked by the minority shareholder — but majority voting rights holder — PSP Investments.
In a March 18 filling with the U.S. Securities and Exchange Commission (SEC), Loral listed the usual benefits and risks associated with Telesat LEO without estimating the network’s cost. Loral has made no commitment to supporting the project.

Fleet operator APT reports stable 2018 revenue, EBITDA, minimal hit from Apstar-6 solar array failure

The Apstar-5C/Telstar 18V satellite entered service in December and did not materially contribute to APT’s 2018 revenue. Credit: APT Satellite Holdings
PARIS— Satellite fleet operator APT Satellite Holdings Ltd. reported a slight increase in revenue in 2018 despite the mid-year loss of half the capacity on its Apstar-6 satellite following the failure of its south solar array.
Hong Kong-based APT took a non-cash impairment charge of 150 million Hong Kong dollars, or 50% of the satellite’s book value, against its 2018 accounts but said the arrival of the long-planned replacement, Apstar-6C, in July limited the revenue effect of the failure.
APT launched two satellites in 2018 — Apstar 6C and 5C.
The Apstar 6C satellite entered operations in July. Shown here is its Ku-band footprint over China. The satellite took over traffic from the Apstar 6 satellite whose south solar array failed in May. Credit: APT Satellite Holdings
Apstar-6C, a DFH-4 model built by the China Academy of Space Technology, has 26 C-band and 19 Ku-/Ka-band transponders. It entered service in July.
APT said it had filed an insurance claim for the Apstar-6 loss and that “claim procedures are nearly completed.” APT reported an insurance payment of 128.7 million Hong Kong dollars — $16.5 million — with the final amount awaiting confirmation by APT’s insurance underwriters. Apstar-6 is operating in inclined orbit.
The large Apstar-5C, co-owned with Telesat Canada, which calls it Telstar 18 Vantage, was launched in September but did not enter service until December and did not contribute materially to the 2018 results. APT owns 57% of the satellite’s capacity.
Apstar-5C includes a standard-Ku and C-band payload with seven wide beams and a regional high-throughput Ku-band beam over Southeast Asia, meaning it provides substantially more net capacity than the Apstar 5 satellite it is replacing. Apstar-5 is now in inclined orbit.
Fo the 12 months ending Dec. 31, 2018, APT reported revenue of 1.24 billion Hong Kong dollars, or $158 million at year-end exchange rates. That’s a 2.5% increase over 2017. But pretax profit was down 0.3%, to 619.6 million Hong Kong dollars.
EBITDA, at 1.03 billion Hong Kong dollars, was 83.4% of revenue, down from 84.4% a year earlier. Available cash at Dec. 31 was 686.9 million Hong Kong dollars, down 29% from the previous year.
Revenue by region was 47% Southeast Asia, 28.5% greater China, 9.4% Hong Kong and 15% elsewhere.
APT has entered into an agreement with Chinese mainland interest to fund what is intended to be a fleet of geostationary-orbit satellites to provide global aeronautical and maritime mobility services.
But so far, only the first of these spacecraft, Apstar-6D, has been funded and is under construction in China. Construction is scheduled to be completed late this year but no launch date has been announced.
APT Chairman Li Zhongbao drew the by-now-habitual picture of an oversupplied, hyper competitive East Asian satellite market. No revenue uptick from the two new satellites was predicted.

Fearing interference with military broadband satellite, France asks ITU regulators to annul Greek license

HellasSat-4/SaudiGeosat-1 in final production at Lockheed Martin. Launched Feb. 5, it is now expected to be operational by early June. Credit: HellasSat video
PARIS — The French government asked international regulators to cancel a Ka-band satellite reservation that Greece and Saudi Arabia are about to activate for a military payload that will interfere with — and suffer interference from — a Franco-Italian military satellite.
The argument is ostensibly between France and Greece, which for years have been negotiating, unsuccessfully, to resolve the problem of operating a Greek satellite using the same Ka-band frequencies as a Franco-Italian spacecraft separated by only 1 degree in geostationary orbit.
But the HellasSat-4/SaudiGeosat-1 satellite launched on Feb. 5 and now making its way to final orbital position at 38 degrees East is a dual-payload mission whose military Ka-band is for the Saudi government. It is this payload, and not the Ku-band payload to be used by Greece’s HellasSat fleet operator — which is owned by Arabsat of Saudi Arabia — that is the source of the dispute.
The Franco-Italian Athena-Fidus military broadband satellite was launched in February 2014 and operates from 39 degrees East.
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The International Telecommunication Union (ITU) is the indispensable rampart against orbital-slot and radio-spectrum chaos. But its actions often combine the worst of the United Nations with the habits of a secret society.
Radio frequencies are more coveted than ever, with heated battles between terrestrial-wireless and satellite network operators. Multiple satellite constellations are seeking global licenses for spectrum used by existing services. This makes the ITU’s job of preventing interference and assuring equitable spectrum allocation ever-more complex even as its rulings become crucial to national economies.
Credit: ITU
The ITU’s top decision-making venue is the quadrennial World Radiocommunication Conference (WRC), a four-week marathon where spectrum access deals are made well past midnight, in rooms where only a few are paying attention.
“True radio-spectrum expertise is rare, maybe 100 or so experts really know their stuff,” said a European government official. “You don’t hear much about them. But every four years they become among the most valuable people in the world for government and business.”
The next WRC meeting is scheduled for Oct. 28-Nov. 22 in Sharm el-Sheikh, Egypt.
In the run-up to WRC-19, Space Intel Report will be publishing an occasional series of articles illustrating the challenges confronting the ITU and the specific satellite-related policies on the WRC-19 agenda.
The series will highlight how nations often game the system — changing frequencies without coordination, using a single satellite to “bring into use” multiple orbital slots, declaring as operational a satellite that has never existed, and disguising commercial missions as “military” to avoid ITU scrutiny.
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Well before Athena-Fidus was launched, HellasSat, through the Greek government, filed Ka-band reservations for a future satellite at 38 degrees east.
Without a satellite of its own to secure the slot and the frequencies by the International Telecommunication Union (ITU) deadline, HellasSat leased the Nimiq-2 satellite from Telesat Canada.
Under ITU rules, a satellite operator running late with its own program can satisfy ITU’s “bringing into use” regulation by placing a satellite — any satellite — at the intended orbital slot and broadcasting in the assigned frequencies for three months.
Telesat and other operators have carved out niche businesses by allowing their satellites to be used in this way. So it was that Nimiq-2, launched in December 2002, found itself at 29 degrees East in October 2013. It left in January 2014.
HellasSat subsequently told the ITU that its Ka-band reservation for 38 degrees East had been confirmed.
Nimiq-2 was gone by the time Athena-Fidus began operations at 39 degrees East, but the French National Frequencies Agency (ANFR) was concerned about HellasSat’s future Ka-band intentions.
The Greek government told France that yes, Greece and HellasSat intended to develop Ka-band at 38 degrees East. HellasSat’s ambitions in particular were broadened a year earlier, when Saudi Arabia-based Arabsat purchased the Greek operator for $281 million.
Coordination between satellites separated by 1 degree is difficult in the best of cases. France asked Greece: Could you not move eastward by a few degrees? The Greeks responded that no, their Ku-band broadcasts had no room to operate any further east given Russian and Turkish satellites. How about if France moved Athena-Fidus westward?
Negotiations went nowhere. In 2015, HellasSat and Arabsat jointly purchased, from Lockheed Martin Space Systems, a large Ku-/Ka-band satellite to be used by both operators from 39 degrees east.
The Saudi government would use the Ka-band spot beams for military purposes, while HellasSat would use the Ku-band capacity to expand its current business from the HellasSat-3, launched in February 2017. The joint satellite would be called HellasSat-4/SaudiGeosat-1.
For France, what had been a theoretical problem now became real.
Whether by real need or only to buttress its argument against HellasSat, France in 2016 signaled that it, too, might want to lease Nimiq-2. But first it needed to verify exactly what Ka-band capacity it carried.
Lockheed Martin, which also built Nimiq-2, in November responded with the satellite’s technical details.
Telesat’s Nimiq-2 has had a varied career being used to “bring into use” orbital-slot regulatory filings for numerous operators. It has generated regular revenue for Telesat by doing this. The French government argues that every operator using Nimiq-2 has declared the same Ka-band frequencies to international regulators — except one. Greece’s HellasSat declared that its use of Nimiq-2 in 2013 brought into use a broader range of Ka-band frequencies that it now intends to use from HellasSat-4/SaudiGeoSat-1, launched in February to 39 degrees East. That would interfere with the Franco-Italian Athena-Fidus satellite, one degree away at 38 East. Credit: French ANFR submission to the ITU Radio Regulations Board.
France also dug into the history of Nimiq-2, which has been used by several operators for “bringing into use” purposes.
According to a document that France’s ANFR presented for the ITU’s March 18-22 Radio Regulations Board (RRB) meeting, every other operator using Nimiq-2 listed only a modest Ka-band frequency range, of 19.7-20.2 GHZ on the transmission side and 29.5-30 GHz on the reception side.
HellasSat and the Greek administration was the sole exception, saying the satellite covered the full Ka-band spectrum — 17.7-21.2 GHz and 27.5-31 GHz.
Armed with this information, France asked Greece how it could claim it brought into use such a wide swath of spectrum when there was no record of any satellite being at 38 degrees East in Ka-band but Nimiq-2?
France said Greece never responded to their inquiry.
Concluding that bilateral discussions were going nowhere, France on Feb. 25 made a formal request to the RRB that it move to annul the Greek Ka-band license at 39 degrees.
In its letter, France referred to the “strategic importance of the Athena-Fidus satellite network for French national security and defense policy.” Negotiations on coordinating Ka-band with satellites just one degree from each other “have reached an impasse.”
Greece, which separately had asked the RRB to grant a four-month extension of the revised deadline for its Ka-band reservation, to October 6 — the satellite was late in launching aboard an Arianespace Ariane 5 rocket — said it was “absolutely astonished” by the French RRB petition.
“This official challenge by the French administration … seriously questions, if not puts into jeopardy, the good faith demonstrated by Greece … during the past six years for a viable settlement of the problem.”

Britain’s Avanti, Saudi Arabia’s Arabsat head toward in-orbit satellite interference over Ka-band rights

The Arabsat-5A satellite before its June 2010 launch. Any Ka-band there? Credit: CNES-ESA-Arianespace
PARIS — Satellite operators Avanti of Britain and Arabsat of Saudi Arabia are heading for an in-orbit confrontation that will undermine both companies’ business once the Arabsat-6A satellite is placed into service sometime this year.
It is the latest instance in which one satellite operator, and its government, accuses another of making false claims to international regulators about what it has in orbit and covering it up by labeling it “military.”
At issue in this case is whether the Arabsat-5A satellite has been broadcasting in Ka-band for the last decade, as Arabsat claims, or has never done so and in all likelihood doesn’t even have Ka-band capacity, as Avanti alleges.
Arabsat-5A was launched in June 2010 into Arabsat’s 30.5 degrees east orbital slot.
Two years later, in 2012, Avanti launched its Ka-band Hylas-2 into a position just half a degree distant, at 31 degrees east.
Neither company alleges frequency interference from the other, and that’s part of the problem. Avanti says that its satellite would have met with substantial interference if Arabsat-5A were operating in Ka-band at such close proximity.
—————————————————————————————————————————————————————————–
The International Telecommunication Union (ITU) is the indispensable rampart against orbital-slot and radio-spectrum chaos. But its actions often combine the worst of the United Nations with the habits of a secret society.
Radio frequencies are more coveted than ever, with heated battles between terrestrial-wireless and satellite network operators. Multiple satellite constellations are seeking global licenses for spectrum used by existing services. This makes the ITU’s job of preventing interference and assuring equitable spectrum allocation ever-more complex even as its rulings become crucial to national economies.
Credit: ITU
The ITU’s top decision-making venue is the quadrennial World Radiocommunication Conference (WRC), a four-week marathon where spectrum access deals are made well past midnight, in rooms where only a few are paying attention.
“True radio-spectrum expertise is rare, maybe 100 or so experts really know their stuff,” said a European government official. “You don’t hear much about them. But every four years they become among the most valuable people in the world for government and business.”
The next WRC meeting is scheduled for Oct. 28-Nov. 22 in Sharm el-Sheikh, Egypt.
In the run-up to WRC-19, Space Intel Report will be publishing an occasional  series of articles illustrating the challenges confronting the ITU and the specific satellite-related policies on the WRC-19 agenda.
The series will highlight how nations often game the system — changing frequencies without coordination, using a single satellite to “bring into use” multiple orbital slots, declaring as operational a satellite that has never existed, and disguising commercial missions as “military” to avoid ITU scrutiny.
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The lack of interference between Arabsat-5A and Hylas-2 “can only mean that Arabsat-5A has not been transmitting in the receiving bands of interest for at least three years,” Britain’s Ofcom telecommunications regulator told the ITU in a March 4 submission.
In the pecking order of satellite fleet operators, Arabsat is a large regional player; Avanti is a smaller one. The London-based company might have declared “no harm, no foul” with respect to Arabsat-5A but for the fact that Arabsat is using its alleged Ka-band heritage on Arabsat-5A to launch the Arabsat-6A this year.
The launch, aboard a SpaceX Falcon Heavy rocket, has been delayed several times and is now set to occur sometime between April and June, the Saudi government regulator said in a March 18 statement to the ITU.
Ofcom told the ITU that Avanti had sought meetings with Arabsat to find a coordinated commercial approach that would permit Hylas-2 and the coming Arabsat-6A to operate without interference, only to be rebuffed.
Avanti’s interest in finding a solution is all the more important because its much-delayed Hylas-3, also carrying a Ka-band payload, is scheduled for launch this year, also into the 31 degrees east orbital slot.
Ofcom and Avanti said they have combed the professional literature and hired satellite broadcast frequency specialists to confirm whether any Ka-band emissions have been coming from Arabsat’s 30.5 degrees location. They found none.
In its March 18 submission to the ITU’s Radiocommunication Bureau, Arabsat said that’s only to be expected: The frequencies were always reserved for military use and thus kept secret.
The U.K. administration “could not find any real information regarding Arabsat-5A operations because this is a governmental network,” the Saudi Communications and Information Technology Commission said in its March 18 ITU submission. “We emphasize that no really information is available in the public domain. The coverage available in the public domain is for illustration only.”
During its construction and launch, Arabsat always described Arabsat-5A as designed to operate from either of two orbital slots, with 24 Ku-band and 28 C-band transponders.
Here is Arabsat’s map of the Arabsat-5A satellite’s Ka-band steerable beam coverage. Britain’s Ofcom says any coverage like this would have caused considerable interference to Hylas-2, in orbit since 2012. No interference was recorded. Credit: Arabsat
Ofcom’s statement to the ITU is dated March 4, two weeks before the Saudi submission. Ofcom makes no reference to an alleged military mission for Arabsat-5A, which suggests that Arabsat had not made this point until now.
Ofcom says that even if Arabsat had placed a Ka-band payload on the satellite and then had stopped using it, ITU regulations require operators to inform the ITU of that fact, and must bring back into use the service within three years.
Failing to do so means the ITU cancels the registration.
“Since it is clear that these assignments have been left unused for more than three years — January 2016-January 2019 — they should be suppressed,” Ofcom said.
The Saudi filing, arriving the day the Radiocommunication Bureau began its quarterly session — March 18-22 — seeks to close down discussion by invoking  Article 48 of the ITU Convention. Invoking Article 48 — claiming a network is military in nature — means the ITU cannot challenge it.
“Due to the nature of the service and the application of Artile 48, the administration of Saudi Arabia is not in a position to provide further information,” The Saudi statement concludes. It suggests that Ofcom and Avanti re-initiate coordination talks.
Letter of reference from Sudan
The Saudi statement includes a letter from the Sudanese Telecommunications & Post Regulatory Authority vouching for the military Ka-band on Arabsat-5A.
“The administration of Sudan confirms the quality of service availability of Ka-band governmental services over the territory of Sudan fro the orbital location of 30.5E,” the Sudanese regulator said. “These services have been provided occasionally on the steerable beam, based on demand.”

OneWeb raises additional $1.25 billion from SoftBank, Grupo Salinas, Qualcomm and Rwanda

Credit: OneWeb
PARIS — Startup broadband satellite constellation operator OneWeb said it has raised $1.25 billion in new capital from existing shareholders SoftBank Group Corp., Grupo Salinas, Qualcomm Technologies and the government of Rwanda, bringing total equity financing to $3.4 billion.
The announcement did not include any mention of OneWeb backers Virgin Group, Airbus and Hughes, which may have been part of an unannounced funding round of several hundred million dollars completed before the Feb. 27 launch of the first six OneWeb satellites.
OneWeb Chief Executive Adrian Steckel made passing reference to these investors in statements before the launch, saying they had “just re-upped their commitments.”
As currently configured, OneWeb is a 650-satellite constellation of low-orbiting satellites offering broadband connectivity in areas of the world that are now unserved or poorly served.
The inability of the company to secure project finance loan guarantees from Bpifrance, the French export-credit agency, has raised questions about whether lead investor SoftBank remained as committed as it was in the past.
Also of concern was the fact that OneWeb had not secured commitments from prospective customers for large chunks of OneWeb capacity — a commitment that a loan-guarantee source like Bpifrance would want to see before backing a project with a capital cost estimated at $4 billion to $6 billion.
The March 18 announcement may have quieted those concerns. OneWeb did not detail the level of investment of each shareholder. But Steckel said the latest ground “makes OneWeb’s service inevitable and is a vote of confidence from our core investor base in our business model and the OneWeb value proposition.”
The first six OneWeb satellite, all reported healthy in orbit, are migrating from their carrier rocket’s drop-off point to their final orbital positions at 1,200 kilometers in altitude. Once they arrive there and begin broadcasting for at least 90 days, the company will have secured International Telecommunication Union (ITU) registration of its operating frequencies — a key milestone that OneWeb had hoped would unlock further investor commitment.
OneWeb’s spectrum rights have long been considered the company’s key asset.
Marcelo Claure, chief executive of SoftBank Group International, said in a statement about the financing:
“OneWeb has extended its first-mover advantage and is on track to become the world’s largest and first truly global communications network. At SoftBank, our aim is to invest in transformative companies at the leading edge of technology disruption.
“OneWeb’s potential is undeniable as the growth in data from 5G, IoT, autonomous driving and other new technologies drives demand for capacity above and beyond the limits of the existing infrastructure.”
With the continuous quality improvements in high-throughput broadband satellites operating in geostationary orbit, it is unclear how much of a service advantage OneWeb will have in less-developed countries once the constellation is operational in 2021-2022.
Also still to be tested is whether OneWeb’s architecture is relevant to 5G, IoT and the coming autonomous-vehicle market.
OneWeb’s first six satellites were built at partner Airbus Defence and Space’s Toulouse, France, facility as part of a 10-satellite lot.
The remaining satellites are to be built at two production lines housed in a new factory in Exploration Park, Florida, which is scheduled to be open in time to produce satellites in volume by the end of this year.
The OneWeb statement referred to the “near-completion of our innovative satellite manufacturing facility,” and said the company would be launching 30 satellites a month starting in the fourth quarter.
OneWeb has contracted with Russia’s Glavkosmos and Europe’s Arianespace launch service providers to fly 20 Russian Soyuz rockets carrying more than 30 OneWeb satellites each.
Virgin Group Chairman Richard Branson said after the Feb. 27 launch that OneWeb had “already raised over $2 billion. That is sufficient money to see it to profitability and it should be relatively easy to raise further money.”

Global Eagle contends with Boeing 737 MAX, India’s Jet Airways issues, explains maritime deals

Global Eagle’s 2018 performance was hurt by concessions it made in maritime cruise line contracts and delayed entry into service of aircraft. Credit: GEE
PARIS — The grounding of the Boeing 737 MAX aircraft worldwide and the financial distress of India’s Jet Airways are two issues that aero- and maritime connectivity and content provider Global Eagle Entertainment (GEE) would not have predicted at the beginning of the year.
GEE said neither is likely to prevent the company, which by mid-2019 will have laid off 25% of its work force and shut down eight facilities, from reaching cash-flow break-even by the end of this year.
GEE, which has focused its connectivity business on single-aisle aircraft, said it has little exposure to the grounding of the 737 MAX fleet in part because customers pay regardless of whether the planes are in service.
Of its 1,022 aircraft connected to its service as of Dec. 31, only 26 are 737 MAX, with another six awaiting to be put into use.
Many of these planes are operated by customers paying GEE on a set monthly basis and “are not dependent on flight segments operated or on passenger sessions,” GEE Chief Executive Josh Marks said in a March 14 conference call with investors.
Another 40-50 737 MAX aircraft had been expected to enter service with GEE’s connectivity service this year, nearly one-third of the total aircraft installations the company is forecasting for 2019.
“As of today, we have not been informed of any changes to shipment dates related to the Boeing line-fit program,” Marks said. “We’ve been told to maintain our expectations about equipment delivery and equipment shipments.”
Jet Airways issued this statement on March 14 denying that India’s civil aviation authority has asked the airliner to cease accepting advance bookings.
GEE had told investors it had begun installations on 70 Jet Airways planes and was poised to be the first to crack India’s in-flight-connectivity market following regulatory approvals.
But Jet Airways in recent days has been fending off issues related to non-payment of aircraft leases, creating confusion about how many planes — and which ones — will continue in the Indian operator’s fleet.
GEE has an operating license for the Jet Airways service and has purchased satellite bandwidth to handle the business. But its customer’s financial restructuring makes it risky to continue with full installation.
“Given the ongoing conversations between Jet Airways and their aircraft lessors, it is important for us to confirm which aircraft are going to be in the fleet long term before we begin putting antennas onto aircraft to complement the in-cabin systems that are already installed,” Marks said. He expressed optimism that Jet Airways would work through its issues and said GEE would continue its ongoing in-flight-entertainment service to Jet Airways as the connectivity issues are resolved.
Marks told investors that the equipment giveaways and other freebies that connectivity providers offered to customers in the past, and which resulted in bad financial performance, are a thing of the past throughout the industry.
But he said GEE was forced to include unplanned sweeteners to secure the renewal of its contracts with Norwegian Cruise Lines and Disney Cruise Lines in late 2018.
For both deals, GEE applied contract rates and service credits retroactively, to the beginning of October, even though the contracts were not signed until late November.
These concessions reduced cruise-line WiFi revenue by $3 million in the last three months of 2018 compared to the previous year.
Given the renown of these two customers, GEE has no regrets.
“We had to do what we had to do in maritime to get the long-term visibility in those contracts,” Marks said. “There was fierce competition for those flagship accounts. We got there by… making investments in those customers and now we’re in a position to benefit over the long term.”
A new antenna and a newly installed Air France fleet went into service in January. Credit: GEE
GEE’s long-awaited connectivity deal with Air France entered service in January, with 15 planes activated as of mid-March. GEE had said it hoped customers flying intra-European routes on Air France would notice the difference in performance between the high-throughput GEE service and competitor Inmarsat’s lower-bandwidth Global Xpress, which has landed Lufthansa as a customer.
A new three-axis antenna, which GEE says functions well from the equator to high latitudes, “is now in commercial service, operating with reliability and high throughput,” Marks said, a development that GEE hopes will further accentuate the throughput advantage.
GEE said it spend more than $100 million in 2018 on securing bandwidth.
Chief Financial Officer Paul Rainey said an unspecified number of planes scheduled for installation in late 2018 had been delayed to the first half of 2019, leaving the company with more bandwidth than it needed.
That cut into connectivity revenue and profit margins.
The company’s latest work force reduction, announced in mid-February, covered 200 people and will cost $4.5 million in severance, most of it to be paid in the first half of 2019, GEE said. In addition to the eight facilities that were closed in 2018, another 10 will be shut down in 2019.

Maritime connectivity provider OmniAccess is first customer for Telesat’s LEO satellite network

Credit: OmniAccess
PARIS — Maritime connectivity provider OmniAccess, a longtime customer of satellite fleet operator Telesat Canada, has signed a “major, multi-year” contract to purchase capacity on Telesat’ LEO constellation of low-orbiting broadband satellites.
OmniAccess is the first commercial customer for Telesat LEO, which is optimistically scheduled to enter commercial service in 2022. Telesat is expected to select a prime contractor for the LEO network later this year.
OmniAccess did not immediately respond to questions about whether it had taken an equity stake in Telesat LEO, whose financing remains unclear, or had agreed to a take-or-pay contract. The network is expected to cost several billion dollars.
The two companies said in a statement that OmniAccess “will become an important partner for Telesat LEO, and the agreement provides OmniAccess with certain limited exclusivity to serve the super-yacht market.”
Based in Lama de Mallorca, Spain, OmniAccess has been a regular customer for Telesat’s geostationary-orbit capacity for several years, well before the maritime service provider became part of the larger Marlink Group, in March 2018.
In late 2016, OmniAccess booked capacity on Telesat’s Telstar 12 Vantage high-throughput satellite for customers in the Caribbean. It has also booked capacity on Telstar 11N and Telstar 14R. Its VSAT-based service uses capacity on more than 30 satellite beams in C- and Ku-band with up to 500 mbps of throughput to certain customers.
OmniAccess was an early supporter of Panasonic Avionics’s planned XTS, or Extremely High Throughput, network, whose status is unclear.
Marlink has an extensive service portfolio that also uses Iridium, Inmarsat, Thuraya and Telenor satellite capacity for its customers. Marlink has 1,000 employees and reported 2017 revenue of around $500 million. It said OmniAccess would continue to operate as an independent company focused on the yacht and small-cruise-line markets.
OmniAccess said its customer base includes more than 350 vessels.
OmniAccess founder and Chief Executive Bertrand Hartman said Telesat LEO’s architecture will offer “ultra-low latency that rivals, our even exceeds, the fastest of today’s land-based fiber connections.
“For the first time in history, on-board systems and services will no longer be restricted by the limits imposed by today’s GEO and MEO-based technologies, finally bridging the digital divide that has held back on-board IT applications for so long,” Hartman said. “This will be a major game-changer for the maritime industry.”

Inmarsat is key to Iridium’s ambitions for Certus maritime broadband

Do you feel abused and fatigued by the dominant maritime supplier? Iridium feels your pain. In fact it’s counting on it. Credit: Iridium
PARIS — In Harry Potter, the principal adversary was the one “who must not be named.” For Iridium, the adversary must be named constantly: Inmarsat.
Serial high-seas-customer abuser, purveyor of clunky FleetBroadband terminals that need cranes to install, competitor to its own partners and since-forever sole holder of International Maritime Organization (IMO) certification as a provider of Global Maritime Distress and Safety System (GMDSS) service, Inmarsat is more than ever on Iridium’s mind and in its crosshairs.
“They haven’t felt us yet. They’ll feel us in the coming years,” Iridium Chief Executive Matt Desch said during the company’s March 7 Investor Day. “It’s all up-side for us. We’re the ones new to the market.”
With its $3 billion Iridium Next satellite constellation up and running, Iridium is readying its Certus broadband platform. A headline goal for Certus is to increase Iridium’s current 4% share of maritime broadband connectivity to 14% by the end of 2021, with an annualized revenue of $100 million.
Iridium’s goal of $100 million in annualized revenue in late 2021 is based on reducing Inmarsat’s dominant maritime market share. Credit: Iridium
“We have reasonable expectations. We’re not taking it all away,” Desch said of the currently dominant market share held by FleetBroadband. But he said the majority of Iridium’s maritime Certus broadband revenue gain “is share taken away [from Inmarsat] because that’s the easiest, lowest-hanging fruit.”
Inmarsat Chief Executive Rupert Pearce, in an earnings call also held March 7, outlined ways Inmarsat would use selected price concessions and a lighter, less-expensive terminal to maintain FleetBroadband’s market relevance. But he also said Inmarsat is focusing on VSAT-type service with its Global Xpress Ka-band satellite constellation. The company would rather move FleetBroadband customers to the higher-speed Fleet Xpress.
Inmarsat acknowledged the threat to parts of its maritime business and said its response will include FleetBroadband promotions and a redesigned terminal. Credit: Inmarsat
“Maritime is still 40% of our business. It was 60%,” Pearce said. “The real value in this industry is predominately VSAT in the next 5-10 years. Our whole strategy is increasing market share in VSAT.”
‘GMDSS gives us street cred’
Bryan J. Hartin, Iridium’s executive vice president for sales and marketing — he showed a picture of himself holding a Cobham-built Certus maritime terminal like it was a birthday cake, while next to it was a huge Cobham-built FleetBroadband 500 terminal — said Iridium’s expected 2020 GMDSS certification was a big deal.
IMO certification is not a money spinner. But Inmarsat fought Iridium’s certification process and Hartin explained the label’s intrinsic value.
“Inmarsat had a monopoly on that for 40 years,” Hartin said. “We can tell that the marketplace has a different view of us with that GMDSS recognition. GMDSS gives us street cred. When they see that GMDSS approval that will help us ramp.”
Iridium is offering Inmarsat maritime customers an easy path to convert to Iridium. Inmarsat has similar incentives for its services. Credit: Iridium
Hartin said Iridium estimates the market for wholesale maritime mobile services is estimated to be $620 million in 2021. Today, Iridium’s OpenPort service has a customer base of some 9,500 ships. Hartin said the end-2021 goal is more than 20,000 vessels producing $8.400 million a month in revenue to get to the $100 million annualized rate. “It’s a reasonable expectation over the course of the next few years.”
Armed with the higher-speed Certus platform, Iridium is going after merchant shipping above all — oil tankers, container ships, bulk carriers, and then leisure lines and super yachts.
Certus as a ‘VSAT Companion’
What to do about shipowners wanting Ku- or Ka-band VSATs for higher bandwidth?
Iridium is pushing maritime Certus as a VSAT Companion, the one that does not fail in high rains, and can be relied on if the VSAT antenna loses sight of the geostationary satellite it’s connected to.
Hartin mentioned maritime satellite service provides Speedcast, Satcom Global, Marlink and others as poised to jump at the chance to move away from Inmarsat toward Iridium.
“They can make better margin with Iridium Certus than with Inmarsat broadband or VSAT,” Hartin said. “And Inmarsat will compete with them, and that’s where it gets very awkward.”
Inmarsat on direct and indirect sales model
Inmarsat years ago began acquiring service providers in its supply chain and adopting a more-direct marketing strategy while maintaining a large group of independent service providers.
Pearce made no apologies for the policy, but said it was part of a broader Inmarsat strategy.
“We do believe in direct/indirect distribution,” Pearce said. “It’s Important that we have a capability that lives and dies on Inmarsat. It allows us to establish foothold in [Global Xpress]. But it’s not the only way. We have take-or-pay [contracts] and strategic alliances that can get the same degree of power. So we are not messianic.
“We are also keen that we treat our channel fairly, it’s a genuine team effort. Don’t want to create internecine warfare. Some competitors are vertically integrating. We watch that closely. Our our channel could roll itself up and integrate itself to get pricing power” over Inmarsat.
Inmarsat’s planned capex — $614.1 in 2017, $590.7 in 2018 — will moderate only slightly in the coming three years as the company invests in new satellite systems. Credit: Inmarsat
Inmarsat used to say of Iridium that it has always been an entity not operating in the real world — a network purchased out of bankruptcy for pennies on the dollar that benefited from France’s Bpifrance export-credit loan guarantees to finance its $3 billion Iridium Next.
But the company now has Iridium Next in service, and Chief Financial Officer Thomas J. Fitzpatrick said the Bpifrance facility and its tough loan covenants will be replaced by a low-interest commercial loan later this year.
Happy capex holiday. Iridium says this will last for a decade. Credit: Iridium
Iridium, Fitzpatrick said, is about to embark on a 10-year capex holiday during which it can accelerate its penetration into selected markets, pay down its debt and distribute dividends to its shareholders.
Inmarsat had also wanted a capex holday after its four-satellite — now five — Global Xpress constellation was in orbit. But it has two L-band satellites under construction and recently decided to contract for a series of Global Xpress coverage-fill-in satellites starting this year. No holiday as of yet.

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