Category: Mobility

Air China moving, slowly, to in-flight connectivity for international fleet

Zhihang Chi, vice president and general manager, Air China. Credit: Euroconsult
PARIS — A year ago Air China, one of the world’s top-10 airlines when measured by passenger count, gave a list of reasons why it was hesitating to install in-flight-connectivity (IFC) on its fleet.
The cost and weight of the equipment and the irregularity of service were among he reasons. Company officials reasoned that zero service was better than a service of uneven quality:  http://bit.ly/2IOr2Zn
Since then, China’s principal satellite operator, China Satcom, has launched Chinasat 16 with IFC as part of its business plan.
The companion Chinasat 18 also had a payload intended for IFC, but it failed soon after launch: http://bit.ly/345bhpb Chinasat has signed an agreement with Viasat Inc. for IFC deployment.
Hong Kong-based APT Satellite Holdings, owned by Chinese interests, is scheduled for launch in 2020 and was designed in part by Panasonic Avionics for IFC. Gogo has also leased part of the satellite’s payload.
So it’s clear that China is moving toward a broad IFC offering. As for China Air…
The company now says it is looking at adopting IFC for is long-haul flights to North America — in five years. The company is still unclear on what business model works for IFC. Other airlines around the world have the same questions but are plunging ahead anyway.
China’s third largest airline, Air China has been keen to offer IFC to customers on international flights since 2013, when the company conducted a trial of connectivity offerings, only to learn the limitations of the technology and the complexity of choosing an inflight broadband solution.
“Our overriding challenge is that I don’t think anybody has found a successful business model that works for IFC,” said Zhihang Chi, vice president and general manager of Air China. Speaking at Euroconsult’s World Satellite Business Week conference here Sept. 9, Chi said IFC is still prohibitively expensive and that customers do not want to pay for it. “Quite frankly, when they do pay for it, they find that the experience is not that great.”
A year ago, Chi expressed frustration with the company’s lack of progress in finding an IFC solution. Today, he is optimistic that in-flight broadband will find its way onto Air China’s North American routes within five years.
“What triggered that was a total change in our thinking pattern; now it’s not about making a buck, it’s more about providing the customer experience that our customers expect,” he said.
“If you just focus on the commercial, you never get an answer, whereas if you think this is an infrastructure that you need to have, that so many different stakeholders can benefit from, especially on the operational side, the maintenance, flight operations and even customer service in terms of our inflight crew serving our customers — if you go down that path the thinking is a little easier.”
Technical challenges remain a key obstacle, notably the choice between a Ku- or Ka-band solution, or a hybrid, in combination with broadband terrestrial networks.  
“This is a very, very complex field and there are so many factors to consider. For example, our techies would say, ‘Hey, we should get Ka-band,’ and now it doesn’t seem that clear to me; perhaps it’s a combination of Ka-band and Ku-band,” he said. “Also, in China we know 5G is coming, and we know air-to-ground and ground-to-air might be a factor to consider.”
In addition, he said the company is concerned with the significant operational expense that comes with onboard connectivity.
“We don’t want to get into a situation where we promise something and we cannot deliver; to me that would be a total disaster,” he said. 

Intelsat files lawsuit against OneWeb & Softbank alleging fraud and trade-secrets misappropriation

OneWeb’s satellite production facility in Florida. Credit: OneWeb
PARIS — Satellite fleet operator Intelsat has filed suit against startup broadband satellite constellation operator OneWeb and its key investor, Softbank, alleging that the two companies conspired to steal Intelsat trade secrets with the intent of unilaterally ending a strategic cooperation agreement.
Intelsat’s lawsuit also alleges that Softbank assisted OneWeb in the theft of confidential information because the Japan-based investor no longer believed in the OneWeb business and wanted to protect its previous investment.
The best way to do that, Intelsat alleged, was for Softbank to help OneWeb pivot from its original business plan of providing global broadband service to a B2B model that relied heavily on the four markets that were given to Intelsat as part of the Intelsat-OneWeb agreement.
These markets — aero mobility, maritime mobility, oil and gas and government — are now the core of OneWeb’s business: http://bit.ly/2WwdaXM
Intelsat agreed to purchase a minimum of $100 million in OneWeb satellite capacity as part of the agreement between the two companies.
The root cause of the conflict is that OneWeb signed away an enormous piece of its future B2B business at a time when the startup, founded by Greg Wyler, believed that providing a global broadband service, especially to the world’s least-served regions, would in itself be a good business.
As it gradually dawned on OneWeb and Softbank that this thesis was no longer tenable, they pivoted to the vertical markets that many other satellite operators are looking at as the most promising.
The lawsuit, filed Sept. 10 in the New York Supreme Court, lays out a sequence of events in which OneWeb and Softbank asked Intelsat for confidential sales information related to customers in these four markets.
Believing that these requests were made as part of the Intelsat-OneWeb/Softbank agreement giving Intelsat exclusive rights to sell OneWeb services, Intelsat continued to furnish the information.
In hindsight, Intelsat now believes that as early as late 2018, around the time that Adrian Steckel became OneWeb’s chief executive — in September — OneWeb and Softbank had secretly decided to scuttle the Intelsat agreement. But they needed the Intelsat data to begin their own effort to sell OneWeb services to the vertical markets.
But trouble began even earlier, according to the lawsuit. In late 2016, Softbank agreed to purchase a 40% stake in OneWeb and invested nearly $1 billion in the constellation startup.
At the same time, OneWeb and Softbank negotiated an agreement under which Softbank would purchase all of OneWeb’s satellite capacity in a $4 billion take-or-pay deal, and be granted global distribution rights — a deal that violated the Intelsat sales agreement.
“OneWeb and Softbank agreed to the [Capacity Purchase Agreement] without discussing or clearing it with Intelsat,” the lawsuit says.
Intelsat responded by sending a breach-of-contract letter to OneWeb on Oct. 26, 2016. In response, OneWeb and Softbank agreed to honor the pre-existing Strategic Cooperation Agreement with Intelsat.
An amended agreement, in which Softbank and OneWeb accepted Intelsat’s exclusivity rights, was signed on Oct. 27, 2016.
The lawsuit says that it was “at the strong urging of OneWeb” that Intelsat entered into contracts for future use of OneWeb capacity with Gogo, GCI Communications and KVH Industries.
In February 2017, OneWeb, Intelsat and Softbank negotiated an agreement that would combine Intelsat, with a 52-satellite fleet in geostationary orbit, with OneWeb into a single satellite operator. As part of the deal, Softbank would invest $1.5 billion into Intelsat, which is heavily leveraged as a result of previous leveraged buyouts by private-equity companies.
Intelsat debt holders rejected the deal.
OneWeb, Softbank and Intelsat continued to negotiate the specific terms of the cooperation agreement. Intelsat said that in April 2018 it waived its rights to bill OneWeb for a $10 million investment Intelsat had made in antenna developer Kymeta — an example, said Intelsat, that it was continuing to act on behalf of the strategic cooperation agreement. 
During this time, OneWeb had sought, without success, to secure debt financing from an export-credit authority, notably France’s Bpifrance. OneWeb has since abandoned its efforts with export-credit agencies, saying it will instead seek more equity from its existing shareholders: http://bit.ly/2kBUecg
SoftBank CEO Masayoshi Son. Credit: Softbank
With nowhere else to turn, OneWeb approached Softbank for more funding. Softbank agreed, on the condition that OneWeb’s other existing investors, including Intelsat, matched the Softbank investment.
“At this time, Softbank no longer desired its global distribution rights and was no longer willing to abide by its $4 billion take-or-pay commitment with respect to OneWeb’s satellite capacity,” Intelsat says in the lawsuit.
“[D]uring the second and third quarter of 2018, Softbank was actively seeking to sell its investment in OneWeb to other satellite providers and had changed its view of the future business prospects for OneWeb.” 
Intelsat tentatively agreed to put in another $20 million — its original investment was $25 million — but only once a signed contract on the distribution details was concluded.
Intelsat says it was not until July 11 that it discovered that OneWeb was acting as if its agreement with Intelsat had been scrapped. The news came in a letter from Steckel to Intelsat Chief Excutive Steve Spengler in which Steckel demanded that Intelsat stop telling distributors that Intelsat had any exclusive distribution rights in the four vertical markets that were part of the cooperation agreement of 2016.
“[N]o capacity distribution obligations currently exist between OneWeb and Intelsat,” the letter said, according to the lawsuit.
The lawsuit includes a summons that OneWeb and Softbank answer the complaint within 30 days. Intelsat says it has not yet quantified what says are “signficiant damages and monetary harm” done by OneWeb and Softbank.
OneWeb declined to comment on the lawsuit.

Panasonic Avionics, Thales InFlyt Experience are investing in new satellites, but cautious about market take-up

Todd Hill, senior director for global satellite capacity planning, Panasonic Avionics Corp. Space Intel Report photo
PARIS — Two major in-flight-connectivity providers, Panasonic Avionics and Thales InFlyt Experience, are making major investments in satellite throughput but were cautious about whether trans-oceanic passengers will see free service anytime soon.
The problem, they said, has not changed: If passengers don’t demonstrate a willingness to pay and third-party sponsorships are not yet widespread, the airlines will not invest in the necessary hardware and will not stimulate satellite fleet operators to offer massive new bandwidth.
Electronically steered, phased-array antennas? Still too expensive, especially with jet-fuel prices at today’s modest levels.
“They keep getting closer to us in the air transport market, but they’re not quite there yet,” said Todd Hill, Panasonic’s senior director for global satellite capacity planning. “Instead of $1 million, now they’re a couple of hundred thousand dollars in the aero market. It needs to be $100,000.”
Given their lower drag, flat-panel antennas should be a natural for for commercial aero market. But their cost has kept them on the sidelines.
“If [fuel] pries go up in the next 5-10 ears, ou are going to see a much stronger push for ESAs [electronically steered antennas], and the business case will switch,” Hill said here Sept. 9 during Euroconsult’s World Satellite Business Week. “But right now, with prices low, you can’t beat the mechanically steered systems.”
Gustavo Nader, head of IFEC strategy, Thales InFlyt Experience. Credit: SES
Gustavo Nader, head of IFEC strategy at Thales InFlyt, said it’s already complicated for airlines to chart a profitable business model in introducing connectivity. “Bringing in another element that negatively affects the economics,” he said, will not be acceptable.
Panasonic XTS: one ordered, two more on the way
Panasonic Avionics has about 8 GHz of capacity leased on satellites around the world. After what looked like a period of hesitation as many connectivity providers invested heavily and lost money, Panasonic is pursuing its XTS of satellite payloads for higher throughput.
The first of these payloads is Hong Kong-based APT Satellite Holdings’s Apstar-6D, to be launched over Asia in 2020. Hill said Panasonic is “actively working on another two, one over the Americas and one over Europe and Africa. We’re not quite ready to announce that — hopefully by the end of the year.”
Competitor Gogo Inc. has also signed up for capacity on Apstar-6D, apparently riding on the tailored payload designed with Panasonic input.
Panasonic has an agreement with London-based Inmarsat to lease Inmarsat Global Xpress Ka-band capacity, available worldwide if in limited supply, and this will serve as a backup for the primmer XTS service in the event of a satellite failure: http://bit.ly/2mqsB6J
Thales InFlyt is an anchor tenant for fleet operator SES’s SES-17 satellite, to be launched over the Americas next year. Thales is the service provider to the regional JetBlue passenger Wi-Fi, which is free and uses Viasat Inc. Ka-band capacity.
Once SES-17 is launched, Thales will have additional SES capacity to provide backup.
But here too, while in-orbit backup would appear indispensable for a high-quality service, airlines will limit investment in it until the business model is proven.
“People want fast service and people want a low-cost service,” Hill said, adding that Panasonic has first-hand experience with scrambling to replace capacity after a satellite failure.
“In our relatively short period of time we have been involved in three in-orbit failures and two launch failures,” Hill said. “The resiliency of Ku-band was a big selling point for us.
“The [Intelsat IS-29e satellite] died a few months ago. On our primary network, which is automated, the switchover was seamless. People did not really even see a degradation of service. But on our older network, which is more manual, they definitely felt the impact. The question is: Will people pay for the difference?”
Credit: SES
Passenger take-up rates have still not reached a point to where more airlines can justify a substantial new investment in connectivity. And take-up is unlikely to improve until the service is better, an endless loop of frustration for passengers and airlines.
“Take-up rate has been low in part because the quality of the service is not what it needs to be,” Nader said. “As passengers realize the experience fan be better, increased take-up will happen. We’re beginning to see that with both free and fully monetizable models, including subsidization with partnerships. That’s what required for this industry to develop.”
For now, airline hesitation continues. Hill said Panasonic’s oldest satellite-Wi-Fi service has been flying for nine years.
“Imagine trying to use your nine-year-old cell phone. The real key is investing in the network and getting the price down so people can afford it. I am aware of five or six airlines that offer free service, but the are all regional carriers.”
Satellite capacity shortage ahead?
Market studies show what looks like an overcapacity of high-throughput satellite capacity worldwide, but Hill said he worried about a shortage given the lack of investment in geostationary-orbit satellites.
“With all the LEO [broadband] constellations, people have frozen their investments,” Hill said. “Traditional GEOs are now [ordered] at less than half the traditional rate. Getting to the next round of capacity building is a challenge. Who is going to invest in it?
“There seems to be a growing shortage of capacity for the early 2020s as existing GEO satellites run out and all the new promised stuff isn’t quite operational iyet. It seems like it is going to be a very tight time in the next half-decade.”

Intelsat to order new-generation satellite within weeks, updates on C-band spectrum cost, Eutelsat’s empty chair

Eutelsat’s Rodolphe Belmer, left, Steve Collar of SES and Intelsat’s Steve Spengler. Credit: Euroconsult
PARIS — Intelsat expects to order a replacement for its failed IS-29e satellite before the end of the year and will choose a one of the new-generation, flexible, lighter-weight designs being offered by multiple manufacturers.
Intelsat Chief Executive Steve Spengler said that the company is sticking with previous estimates that it will take a $70 million hit to its EBITDA this year, with a $50 million impact on revenue, as a result of the sudden failure of IS-29e in April.
In a Sept. 18 presentation to a Goldman Sachs investor conference, Spengler also discussed — as he must every time he speaks in public — the status of the C-band spectrum auction proposal now before the U.S. Federal Communications Commission (FCC).
Intelsat is drifting one of its own satellites to the North American arc as part of what Spengler called a “multi-pronged” strategy to compensate for the loss of the $400 million IS-29e at 50 degrees west. A second Intelsat satellite will be relocated to the region as well as part of the effort: http://bit.ly/2GzIRK8
Longer term, Intelsat will replace the high-throughput capacity of IS-29e, Intelsat’s first Epic-class satellite, with a new-generation flexible payload that several manufacturers are offering in hopes of luring operators of geostationary-orbit satellites back to the market.
In recent weeks, Boeing Satellite Systems International has introduced its 702X, Thales Alenia Space has showcased its Space Inspire product. Earlier this year, Airbus Defence and Space made the first sale of is OneSat design as part of a three-satellite contract with Inmarsat of London.
“The good news is that we are going to be able to acquire an Epic-class-type satellite to give us excellent economics in a short time frame,” Spengler said.
The new designs are being pitched as offering similar economics, measured by the cost per delivered megabit, as the current generation of much larger Ka- and Ku-band broadband satellites, but for much lower capital cost and, because of their lower weight, much less costly to launch.
Spengler said Intelsat and the other two members of the C-Band Alliance coordinating the cession and proposed auction of 180 MHz of C-band spectrum, plus a 20-MHz guard band, still expect an FCC decision this year. The other two members are SES and Telesat.
He reiterated earlier comments that the departure of fleet operator Eutelsat from the C-Band Alliance — http://bit.ly/2lAKnU1 — has had no effect on the FCC’s treatment of the auction proposal.
Eutelsat’s share of the estimated proceeds from the auction have been estimated at around 5%, following the agreed-to formula of using each company’s 2017 U.S.-based C-band review as the yardstick.
Eutelsat has not been clear about what it hopes to gain from quitting the alliance, leaving industry observers to speculate that the company is seeking a better split of the revenue than would be warranted by its 5% share of the market.
Eutelsat: Our share of the C-band auction proceeds needs to be discussed 
Eutelsat Chief Executive Rodolphe Belmer’s Sept. 9 explanation for his company’s move, made here during Euroconsult’s World Satellite Business Week, appeared to give weight to this idea.
“It’s true that most probably, the CBA will be the best possible, as the FCC calls it, ‘position facilitator’,” Belmer said. “That means it will be the best organization to organize and expedite as much as possible the C-band process in the U.S.
“That doesn’t mean that the rights of other players, which are legitimate, should be ignored. As for ourselves, we are not against CBA at all. We are not against the fact that ultimately CBA stays the facilitator. We don’t dispute that.
“The only thing is, we think some rights, including ours, are very important. This needs to be recognized in many different aspects — proceeds, decision-making process, the size of the bandwidth, contribution to the U.S. Treasury — all those elements should be taken into consideration.”
Spengler said that the FCC remains focused on getting a deal done quickly and that this overwhelms whatever complications might arise from Eutelsat’s departure. He said the C-Band Alliance would welcome Eutelsat back to its ranks.
“It is an international competitive issue for the United States,” Spengler said. “5G services are operating today in Korea in the mid-band spectrum, the same 3GHz spectrum [being discussed with the FCC]. China is about to roll out the same services in the same spectrum, very soon. There is an ecosystem of equipment and technologies being formed around it, so the US has to satay with that game and compete.”
Intelsat has estimated that the cost to all C-Band Alliance members of adjusting making sure their customers will not suffer from the loss of 200 MHz will be between $1 billion and $2 billion.
The cost includes building eight relatively small C-band satellites — four each for Intelsat and SES — and launching six of them to provide more orbital slots to compensate for the loss of spectrum to 5G terrestrial operators. Other costs include providing what Spengler estimated will be 90,000 filters for C-band receive-only Earth stations at 35,000 locations.
Intelsat: We’ll owe taxes on C-band proceeds in both US and Luxembourg
Wall Street is awash in estimates ranging from $2 billion to $50 billion and more on the gross proceeds likely from the C-band auction. The C-Band Alliance, in a move that Eutelsat opposed, has offered to make a voluntary contribution to the U.S Treasury of part of the proceeds.
Spengler said Intelsat, with headquarters in Luxembourg but is main operational facility in the United States, expected to owe taxes in both jurisdictions as a result of the auction. “Of course, we have some NOLs [net operating losses] in Luxembourg that we will be able to take advantage of in terms of this transaction.”

American Airlines assesses in-flight-connectivity experience with Viasat, Gogo, Panasonic Avionics

Vy Duong, Innovation and Revenue generation marketing, American Airlines. Space Intel Report photo
PARIS — The sooner American Airlines moves its fleet from slow air-to-ground connectivity to the faster satellite-delivered service, the sooner its current satellite customers will get high-quality free in-flight Wi-Fi.
That is the message that American Airlines delivered here in explaining the compromises that result from having multiple grades of in-flight connectivity: The airline wants to offer everyone the same level of connectivity, which is set by the slowest service.
American Airlines has perhaps the best view of any major carrier of what the various satellite-IFC offers look like. It made a major move from Gogo to Viasat at a time when Gogo did not have full availability of its new 2Ku service, and its earlier satellite service could not match Viasat’s Ka-band offer for North American air routes.
American now has more than 600 aircraft equipped with the Viasat offering, plus 160 Panasonic Avionics satellite-delivered connectivity and 146 planes with Gogo’s 2Ku. In addition, American has a 300-plane fleet of regional jets that use Gogo’s air-to-ground (ATG) service.
Vy Duong, American’s manager for innovation and revenue generation marketing, said the airline gets lots of feedback from passengers who recognize the difference between the Viasat, Gogo and Panasonic services.
“It’s a huge platform for customers to tell us if they like Gogo vs Viasat vs Panasonic,” Duong said here Sept. 9 at Euroconsult‘s World Satellite Business Week. She declined to rank them, but suggested that the fact that American has 600-plus Viasat-equipped planes gives an indication of what customer response has been. “We are now at 100% of your domestic main-line fleet with high-speed Wi-Fi.”
Comparing satellite IFC services is difficult because the service providers are all expanding their fleets and moving to high-throughput satellites. Any snapshot of performance may be temporary if the less-capable provider is about to upgrade to higher-bandwidth satellites. In addition, Panasonic and Gogo, using Ku-band, have broader global coverage than does Viasat.
Gogo has in fact argued that this is what happened when American switched to Viasat over Gogo just as Gogo was introducing 2Ku. Gogo has maintained that there is no material difference between Viasat’s Ka-band and 2Ku.
Maintaining four services delivered by three IFC suppliers complicates customer login, and American is retrofitting its aircraft to reduce the number of providers.
“Having three different passwords and logins is not customer-friendly,” she said “Less providers may be a good thing in some ways.”
With Viasat, Apple Music became a believer
Duong said the general quality of satellite IFC has improved in terms of speed and what while work still needs to be done to improve reliability, the Viasat service proved good enough that Apple Music committed to a free service on Viasat-equipped flights.
High cost and inconsistent quality were reasons keeping Apple Music away from an airline service.
“They couldn’t find an airline that had the speed and reliability they wanted to show their produdct on,” Duong said. “Through a lot of rounds of testing with the Apple Music engineers and the American Airlines tech-ops teams, we were able to prove that it does work on Viasat’s Ka-, and we were able to launch.”
The service launched in February and allows passengers to access Apple Music without purchasing a Wi-Fi pass.
Perhaps surprisingly, American found that the take rate for the Apple Music offer was the same as it was for free TV.
But an all-free IFC offer is not yet in the cards, not least because it cannot be rolled out to the entire fleet — “mainly because ATG cannot support free streaming,” Duong said.
“Even if we wanted to provide an entirely free Wi-Fi experience, the messaging to customers is going to be very difficult because the ATG customers will not have the same experience that they have on Viasat Ka or Gogo 2Ku. To provide a seamless experience, in a way we have to provide the very lowest time of Wi-Fi so that all customers can experience it in the same way.”

Speedcast’s Beylier on M&A ‘speeding ticket,’ Carnival contract issue, uneven bandwidth availability and IoT

P.J. Beylier. Credit: Speedcast and WTA
PARIS — Satellite services provider Speedcast has had a rough few months. The delayed rebound of the energy markets and a technical glitch in the ramp-up of its large Carnival Cruise contract, among other issues, caused a 65% drop in its stock price since late June: http://bit.ly/2ZqQbxF
Chief Executive P.J. Beylier survived a board shakeup that resulted in the departure of its chief financial officer and is now charged with turning a showcase M&A company into one focused on organic growth.
Beylier addressed these issues Sept. 10 during Euroconsult’s World Satellite Business Week. Here are excerpts from his remarks.
Why remain a publicly traded company?
“We have been publicly listed for five years. The first four years have been fantastic. The past 12 months have been painful. Other companies in this sector have gone through that. We’re not the only one.
“We decided five years ago to list. At that time it was opportunistic more than anything else. I think it has been good for us. With respect to the last 12 months, when you look at what happened, the situation with energy where we are expecting it to start recovering, there is an overreaction and the snowball effect of the public markets.
“Some of the pain was self-inflicted. We made some mistakes. Now we are very focused on organic growth, getting our systems and processes where they need to be. We’ve grown a lot, very quickly, integrating all the different companies. We’re getting a speeding ticket. Now we’re focusing on furthering integration. But we are excited and convinced about the power of the platform that we have been building over the last five years.
“The company is solid and we have capabilities that are second to none in the industry and we are in a very strong position to generate organic growth above what the market will achieve in the coming next ew years. We’re very focused on that and going through the pain but that is part of the experience.”
Speedcast provided a record 3.174 Gbps of throughput to the Carnival Horizon ship during the ship’s inauguration in 2018. But it was provided by several satellites while the ship was in New York harbor and is not reflective of average bandwidth available. Credit: Carnival
What happened with the Carnival Cruise contract that caused costs to rise?
“It’s an issue we will all be facing as an industry. We are a little bit ahead of the pack. To bring the level of bandwidth that our customers need, and the price points they expect, we need to go beyond what we have done in the past in the type of capacity we are using.
“We need the ability to go through a maximum number of options. On a cruise ship, we need to be able to use C-band, Ku-band and Ka-band. To do that we are using tri-band antennas, and there are some teething issues with that. They work on some Ka-band satellites but not as well on others.
“As we are fixing some of these communications it has led us to use higher-cost Ku-band capacity instead of the Ka- band we wanted to use. But we’re getting there.”
Despite all the new capacity coming into the market, you have difficulty duplicating the 1-Gbps-level bandwidth in the Caribbean or the Mediterranean during the trans-Atlantic passage?
Today we are serving ships with 4,000 to 8,000 people aboard, and 400-500 Mbps is becoming common. That is far from enough, because when I say 400-500 mbps this is adding both directions — so maybe 200 Mbps down.
We think this 500 Mbps will become a gigabit, or a gigabit and a half, and 2 gbps potentially. Today we are facing some limits to that. We have delivered 3.2 gigabit to one cruise ship, but this was using different satellites and to a place where we could use different satellites. [New York City harbor]
We are going to be faced with a situation where we can deliver a gigabit to a ship in the Caribbean, but we cannot deliver that 1 gigabit when that ship crosses the Atlantic to go to the Mediterranean. So there are regions where we have access to significant capacity, and there is more coming, and there are regions where we are lacking capacity.
So yes, there is a lot of capacity coming. But it’s not a homogenous picture. there are differences from region to region and frequency to frequency.
When you say a lack of capacity, do you mean there is no capacity available or that it’s too expensive?
Both. Over the crossing we have issues with the amount of capacity available and we have a price issue.
Do you see a long-term need to continue to use C-, Ku- and Ka-band, plus L-band?
We still use a lot of C-band and we would like to continue to use C-band. We have customers who want 99.97% availability for critical applications and we can achieve that only with C-band spectrum. L-band works as well but it’s not the same amount of bandwidth.
I could see customers dividing applications, with noncritical applications going to Ku and Ka and the more critical ones staying with C-band. We are very agnostic in terms of spectrum. For customers who need a lot of spectrum we need Ku-band and probably Ka-band as well to get to that price point.
So I think you will continue to see us using those three spectrums, L-band as a backup as a troubleshooting when things are down.
Our mission is not to fill assets in the sky. It is to satisfy the customer. We are dealing more and more with hybrid networks, with LTE, and in dozens of key ports, big wireless radio hubs so that when the ship is in port, where they may not be able to use the satellite, depending on the regulation, they have connectivity.
You reported having 20,000 IoT devices under contract. Is that a growth area?
We are seeing growth in IoT, meaning narrowband applications. For years we have been talking about more and more megabits, but there is a significant opportunity in IoT for narrowband to connect a growing number of objects.
What is the ARPU for your IoT business?
Let’s assume it is around $10 per month per device.
What’s your latest thinking about whether new flat-panel antennas will be a growth driver for your markets?
In cruise, flat panel is not key, nor is it for energy and offshore. But it could be interesting for commercial shipping and yachts with 60-cm antennas. Current antennas are complex to install, configure and maintain. The idea of an antenna that you throw on the ship with no maintenance because there are no mechanical parts is a game changer.
The same is true for land mobility. Having a small, low-cost antenna that we can install on various assets that move around with a decent amount of bandwidth Government, NGOs and the UN could use this too. That could be very interesting.

Airbus to in-flight-connectivity providers: Here’s what you need to do

Hugues Favin-Leveque, vice president, Airbus connectivity roadmap. Credit: Airbus
PARIS — Airbus has some advice for airlines and providers of in-flight connectivity on how to capitalize on growing demand. Much of it is predictable — lower costs, higher throughput — but it also calls for maintaining air-to-ground service and adding capacity from low-orbiting broadband constellations, of which several are being designed.
In addition, airlines need to consider dual Ka-band and Ku-band networks, as neither on its own is the best solution in the air, according to Hugues Favin-Leveque, connectivity roadmap vice president at Airbus. Related to that is the need to offer immediate backup capacity in the event of a satellite failure.
“It’s important that it’s fully secured, and not ‘One day it’s there, and the next it’s not,’” Favin-Leveque said during Euroconsult’s Smart Plain symposium here Sept. 9. “That means possibly parallel communication links.”
Here are Airbus’ other recommendations:
— Bandwidth needs to be 1 Gbps per plane for peak demand routes, and an average of 50-100 Mbps on average, fleet wide, when both single-aisle and long-haul aircraft are included.
— Cost needs to come down substantially.
“Collectively, we should do some design-to-cost exercise, targeting something like 100,000 euros ($111,000) capex per aircraft and opex in the range of 10 euros per aircraft seat, per month,” he said. “The reason why today only one-third of the fleet worldwide is equipped is because there is high up-front capex and high opex.”
— Outfitting aircraft with both Ka- and Ku-band connectivity likely will be needed.
“Both bands are suitable for aero, and Airbus would not recommend going exclusively with one or the other,” he said. “Both bands will coexist in the next 10 years.”
— Whether it’s line fit or retrofit, installation takes too long.
“Fitting the antenna onto the aircraft  is extremely complicated. It takes several maintenance hours — days. Your aircraft is grounded during these operations. And that’s just during maintenance or retrofit,” Favin-Leveque said.
“As OEM, our primary concern is on the line fit. If you visit our assembly line, you will see this is one of the most complex operations in the work flow. We want to find clever ways with the stakeholders to come to a solution where the integration can be done without having to screw 60 bolts on top of the aircraft. Collectively [the goal] is overnight installation of the terminal. And we should target an operator-agnostic, operator-interoperable terminal.”
— Flat-panel arrays can’t come soon enough.
Today’s mechanical gimbal antennas create drag that is equivalent to adding 250 kilograms to the weight of an aircraft.
“It’s very heavy, roughly [30,000 euros] of fuel per year for a single aisle,” he said.
 But flat panels have their own issues. They are less efficient than directional antennas, and cannot cover the full 360-degree range or 0-to-90-degree elevation. 
“If you want to access the mega constellations, you need a minimum of two beams,” he said. “If you want to have hybrid connectivity, you would need two beams for seamless handover. We have to go from single-beam satcom infrastructure on the aircraft to multi-beam. Here again, the flat panel should allow this. You could also imagine multiple flat-panel antennas, assuming they are cheap, to ensure seamless handover from one LEO satellite to another.”
— Standardization is the goal
Like just about every other player in the IFC ecosystem, Airbus wants to see more standardization and interoperability among the hardware providers, with airlines adopting roaming standards similar to what terrestrial mobile operators do.
 Modem technology is another area ripe for innovation, with the advent of software-defined radio technology paving the way for a completely agnostic piece of hardware on which airlines could load the software needed to communicate with different satellite operators’ gateways.
 “We could imagine a completely dynamic loading of software as a function of which satellite you’re talking to at a given moment,” he said, emphasizing the need to adopt standardization in areas beyond antennas and seamless broadband, including interoperable Ka-band antennas.
 “Why don’t we work on something similar in the aero-connectivity domain?” he asked. “My message is we are all interested in this ubiquitous connectivity.”  
 Contributing Editor Amy Svitak can be reached at aesvitak@gmail.com

U.S. military signs seven-year, $738.5-million unlimited-use contract with Iridium

Credit: Iridium
PARIS — Mobile satellite services provider Iridium has renewed its showcase contract with the U.S. Department of Defense for $738.5 million over seven years, a renewal that includes a 32% increase in annual commitments and a two-year increase, two seven years, in contract duration compared to the previous arrangement.
Under the contract, the U.S. military, which has long been Iridium’s biggest customer, will have unlimited use of the Iridium constellation, which has recently been refreshed with new satellites as part of a $3 billion capital program.
Iridium officials had long expressed confidence that the increased use of Iridium by the U.S. military — 51,000 in 2013 and 125,000 now — would be reflected in the new contract.
Some analysts had speculated that the deal might reach $1 billion.
At $738.5 million over seven years, the commitment is $105.5 million per year, compared to $80 million per year under the 2013 deal, which lasted for five years and was then succeeded b a six-month, $44 million agreement and a more recent $8.3 million extension.
In addition to putting to rest what might have been seen as a risk factor, the new commitment from the U.S. Air Force Space Command will enable Iridium to refinance its current debt, mainly with the French export-credit agency, Bpifrance, in favor of commercial loans.
Iridium Chief Financial Officer Thomas J. Fitzpatrick said the current economic climate is very favorable for Iridium, especially given that Iridium is now set for a 10-year period of no more than maintenance capex spending.
“Iridium’s relationship with the U.S. government has been the model of what a public-private partnership should look like in the satellite industry,” Iridium Chief Executive Matt Desch said in a Sept. 16 statement.
“The U.S. government has made significant investment in Iridium over the years, and likewise, we have invested billions of dollars to ensure our network remains the premier reliable, mobile satellite service with a proven ability to be deployed anywhere in the world. While this new contract will see continued adoption of Iridium, it will also drive ongoing innovation through collaboration between the U.S. government, Iridium, industry partners and user communities.”

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

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

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

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

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