Category: News

U.S. C-Band Alliance proposes to auction 9 20-MHz blocs; 3 can be cleared within 18 months

The C-Band Alliance proposes to divide the 200 MHz it is offering to sell to terrestrial 5G operators into nine 20-MHz blocs, called Partial Economic Areas (PEAs), plus a 20-MHz guard band. Credit: C-Band Alliance
LUXEMBOURG — The C-Band Alliance of satellite operators proposing to auction off 180 MHz of C-band spectrum to 5G terrestrial network operators in the United States proposed to auction the frequency in nine 20-MHz blocs that it said would optimize the participation of rural and urban bidders.
Three of the nine blocs could be released for 5G deployment within 18 months of an order by the U.S. Federal Communications Commission (FCC), the CBA said.
In a May 21 submission to the FCC, the CBA said the number of C-band dish antennas in these three Partial Economic Areas (PEAs) is low enough to permit them to be refitted with filters to allow terrestrial 5G within 18 months without disturbing the C-band satellite distribution that would continue in the remaining 300 MHz — and without launching new C-band satellites.
The CBA, led by satellite fleet operators Intelsat and SES and including Telesat and Eutelsat, has committed to financing the antenna retrofits and other costs incurred by their current customers to avoid signal interference as 5G terrestrial broadcasts enter what is now their exclusive C-band territory.
The CBA has said it could make the entire 200 MHz — 180 MHz after accounting for a 20 MHz guard band separating satellite and terrestrial users — available within 36 months of an FCC decision approving the auction.
For certain areas, the spectrum clearing will take more time and require the launch of new satellites. Intelsat and SES have committed to ordering eight small C-band telecommunications spacecraft if the FCC OKs the auction. Six of these would be launched:
“All incumbent C-band satellite users will be served by a denser satellite network delivery capacity similar to the planned pre-relocation C-band satellite fleets, but in the remaining 300 MHz,” the CBA said in its May 21 filing to the FCC.
The nine-bloc scenario is still subject to modification pending ongoing discussions with the interested parties, CBA said. The goal, the alliance said is to optimize the participating of bidders in both rural and urban areas.
Each block is small enough to allow regional players a shot at winning a bid, and large enough to appeal to bidders seeking to aggregate spectrum for seamless coverage in larger areas.
The CBA said the 20-MHz bloc size is compatible with 3GPP, an organization that develops mobile communications standards.

Airbus says 3 orders prove geostationary-satellite market’s continued viability, describes new GEO-market product

Nicolas Chamussy. Credit: Euroconsult
WASHINGTON — For Airbus Defence and Space, the market for geostationary-orbit satellites is, if not well, at least alive and likely to remain so for the long term as manufacturers develop software-defined payloads smaller, less-costly satellites in GEO orbit.
Airbus announced three GEO-orbit satellite orders on May 6, two of them won in cooperation with Thales Alenia Space for the Spanish Ministry of Defense — — and one for Malaysia’s Measat commercial fleet operator including Measat’s first HTS payload and an L-band GPS-overlay hosted payload for the Korea Aerospace Research Institute (KARI).
“These are GEO satellites, even if they are with a new-generation platform and flexible payloads,” said Nicolas Chamussy, head of Airbus Space’s satellite division. “If you want a demonstration that there is still a need for these big satellites — this is it.”
Chamussy is leaving his post as of June 1 and will be reassigned, presumably within the Airbus Group but he declined to talk about his future during a briefing here at the Satellite 2019 conference.
Given the state of the geostationary-satellite market — less than 10 GEO-orbiting satellites ordered in 2018 worldwide — Chamussy is going out with a bang. The two Spainsat NG satellites were in negotiation for a long time. Airbus is providing two Eurostar NEO all-electric platforms, with Airbus and Thales Alenia Space both prodding the X-, UHF- and military-Ka-band payloads.
Industry officials said Airbus has also won a competition to build at least two or three midsize, identical Ka-band satellites with flexible payloads for mobile satellite services provider Inmarsat of London. A contract announcement is expected in the coming weeks:
Airbus expects to deliver four GEO-orbit telecommunications satellites this year: the Telstar-16 satellite for AT&T’s DirecTV; the Eutelsat 5WB, using a Northrop Grumman Innovation Systems platform and an Airbus payload; and two military satellites that Chamussy declined to name.
The two are almost certainly for Egypt’s military, here too in cooperation with Thales Alenia Space; and the KMilSatcom satellite for South Korea’s Defense Acquisition Program Administration (DAPA).
The Korean contract resulted from an unusual sequence of events in which Lockheed Martin was to provide the satellite as part of a wider deal to provide F-35 Joint Strike Fighters, with a satellite thrown in. Lockheed transferred the satellite piece to Airbus after running into delays:
Chamussy said Airbus has designed a new product, called OneSat, intended to capitalize on GEO orbit’s advantages — wide coverage — while reducing its disadvantages — high cost, long manufacturing cycles and the stranded-asset problem as GEO satellites’ 15- to 20-year operating lives are too long to keep up with technology advances.
OneSat is a midsize satellite platform — 10- 12 kilowatts of power, no more than 3,500 kilograms’ launch mass, and a delivery time of 18-24 months from contract.
“This would be focused on one mission, with a kind of series production of a couple of satellites per year of the same size and the same frequency band,” Chamussy said. “The idea is to avoid bespoke satellites, and especially bespoke payloads. Instead it is a recurring design with fully flexible payloads.
“It’s not just a bus, but a full satellite with as much recurring [from satellite to satellite] as we can. We want a standardized satellite that we do not need to tweak too much. We want to deliver a high megabits-per-dollar solution.”
Chamussy declined to comment on the Inmarsat competition beyond saying Airbus had proposed the OneSat product to Inmarsat and to other satellite operators. Fleet operator SES in particular is preparing a competition for a similar product.
Airbus is also under contract to Inmarsat to deliver two large Inmarsat-6-generation L-band satellites to maintain Inmarsat’s core L-band mobile communications business.
Other manufacturers are working on similar designs as OneSat as satellite operators seek to cut costs and remain competitive.

With Dish transaction, EchoStar is now Hughes Network Systems and little else

Charlie Ergen. Credit: CNET via Youtube
PARIS — EchoStar is selling almost all its EchoStar Satellite Services (ESS) business to sister company Dish Network in a transaction that formalizes what has been true for some time: EchoStar is now Hughes Network Systems and little else.
EchoStar and Dish on May 20 said all the ESS satellite assets and tracking, telemetry and command services that now are used for Dish Networks’ direct-broadcast television service will be transferred to Dish.
In return, Echostar shareholders will receive 22.9 million shares of Class A Dish stock in what EchoStar describes as a tax-free transaction.
Dish and EchoStar separate in 2008, but Dish has remained the dominant customer for ESS. In 2011, EchoStar — like Dish, majority-owned by Charlie Ergen — paid $2 billion to purchase broadband ground hardware and services specialist Hughes.
Since then, the ESS business has been unable to get much traction in the United States market or break into the dominant businesses of competitors SES and Intelsat.
In recent years, the U.S. market for fixed satellite services operators has been especially battered by the move to streaming services and the broader decline in the market for geostationary-orbit television satellites.
ESS revenue has declined, while Hughes’s has increased.
EchoStar Chief Executive Michael T. Dugan said the decision to hive off ESS and to focus on Hughes is a reflection of that reality.
“This transaction will allow EchoStar to focus our efforts on our high-growth business of broadband services and other initiatives, while eliminating a negative growth component of our financial performance and the risk associated with providing services to a solitary customer,” Dugan said in a May 20 statement.
ESS will not disappear entirely. EchoStar Mobile of Ireland, which is commercializing an S-band mobile service in Europe, will remain with EchoStar.

Panasonic challenges flat-panel antenna builders Ball Aerospace, Kymeta, Phasor on cost & interoperability

Lisa Kuo, Panasonic Avionics Corp. director of technical sales. Credit: Panasonic
WASHINGTON — Electronically steered antenna designers Ball Aerospace, Kymeta and Phasor and aero-connectivity provider Panasonic Avionics said affordable mass-market products were still some ways off for user terminals and that reliability is already an issue for mechanically steered antennas.
Lisa Kuo, director of technical sales at Panasonic, said airlines want antennas and modems that are future-proof, meaning at least 10 years of service before they are obsolete. That means hedging between Ku- and Ka-band equipment.
In a statement repeated multiple times here during the Satellite 2019 conference, Kuo said hardware builders need to move to interoperability even if that means sacrificing some early market advantage.
“I get it: You want to dominate the market with a proprietary system,” Kuo said. “But that is not in the interest of the customers. How can we make sure these systems can all work together?”
One path to standardization would be to design a dual Ka-/Ku-band system to permit users to remain connected as they move in and out of a given satellite’s coverage, or to switch immediately in the event of a satellite failure.
The phased array antenna builders said they are working on both.
“When we started, around 2012, Ka-band was very recent in orbit,” said David Garrood, senior vice president of business development at Phasor. “That’s why we went to Ku.
“But Ka is increasingly seen as important, and as offering lower-cost satellite capacity. So it is definitely a market we are looking at and we propose start that development in the next few months.”
Peter Moosbrugger. Credit: Ball Aerospace
Ball Aerospace has been building electronically steered antennas for military applications for years and is now positioning itself for commercial applications including low-Earth-orbit satellite constellations and 5G terrestrial networks.
Ball recently tested such an antenna to communicate with satellite fleet operator Telesat’s experimental LEO Phase 1 satellite. Ball said in January that its antenna tracked the satellite over several passes.
Peter Moosbrugger, Ball’s chief technologist for phased array and RF technology, said has already demonstrated ground user hardware for Ku- and Ka-band systems. He said the goal is to leverage the large volumes needed for 5G network antennas to bring down the unit cost of satellite user terminals.
“We are building a supply-chain ecosystem that can address a pretty wide range of supply,” Moosbrugger said. “That includes 5G and different satcom market verticals. We focus our [second-generation] architecture on something that could scale from an ecosystem that needs to be ITAR-compliant — export-control compliant — to address a worldwide market at really high volumes.”
Kymeta Corp. made a splash in the electronically steered antenna market in 2017 by saying it had deployed hardware to customers, military and commercial. Kymeta has been working with satellite fleet operator Intelsat on antennas to operate with OneWeb’s constellation of low-orbiting satellites, in Ku-band.
Lilac Muller. Credit: Kymeta Corp.
“Kymeta started with Ka-band development and pivoted to Ku for our business partnership with Intelsat,” said Lilac Muller, Kymeta’s vice president of product management.
“But when you look at what [satellite] capacity is going up in the next few years, it’s a lot of Ka capacity. We’re pursuing a Ka product in parallel to Ku. Interoperability is a big question. We’re going to tackle interoperability between GEO and LEO first, before we go to interoperability between Ku and Ka. So for us right now it’s two product lines.”
Panasonic and mobile satellite services provider Inmarsat in September 2018 announced a strategic collaboration that would enable each of them to offer the other’s in-flight connectivity solutions. Panasonic’s IFC package is in Ku-band, Inmarsat’s Global Xpress fleet is in Ka-band.
There was much industry speculation at the time over whether this was Panasonic’s way of conceding that Ka-band was the future, or was Inmarsat’s concession that it needed Panasonic’s customer base to succeed.
Kuo said it was Panasonic’s way of hedging its bets.
“We are not looking at this as Ku vs Ka,” Kuo said. “There are a lot of technologies out there and we need to diversify our portfolio. We picked Inmarsat as our first step because they are very established in the industry. This is a strategic first step that we chose. It’s really not about the frequency band.”
Unit cost vs life-cycle cost of ownership
Moosbrugger said the cost discussion between electronically and mechanically steered antennas often forgets the total cost of ownership of mechanical systems.
“I’ve seen numbers o mechanical systems that are in the 80,000- to 100,000-hour range” of commercial lifespan, Moosbrugger said. “You go on line and find the calculator for reliability and how many planes are going down [for servicing] a year, and with 10,000 planes, it’s a pretty significant number.”
Muller said Kymeta has seen similar problems with the land-transportation market where Kymeta is focused. Kymeta is not targeting the aero market yet.
“Just for reference: There are about 100,000 new or refurbished inner-city buses purchased each year,” Muller said. “That gives you a sense of the volume. You want to talk higher? RVs [recreational vehicles] — 1 million a year. Two million trucks going city to city in a year.”
While these current rooftop systems are less expensive than the electronically steered antennas, they hold out the promise of longer service life.
“The number one complaint [of railroad customers] is the amount of time they have to pull it out of service,” Mullen said. “They have guys on top of the locomotives messing around with various mechanical systems that are wearing down.
“They can’t wait for all our technologies to be out in the market to stop messing with mechanically steered systems.”

Eutelsat: Yes, we missed our revenue target again. Judge us instead on EBITDA margin, cash flow, ROIC

Credit: Eutelsat
PARIS — Satellite fleet operator Eutelsat said its core broadcast market remains solid and that its poor track record in forecasting annual revenue is less important than hitting its key performance targets on EBITDA margin, free cash flow and return on invested capital.
Paris-based Eutelsat surprised the market on the downside yet again by saying its total revenue for the fiscal year ending June 30 will not be flat from the previous year, but down 3%.
But the company reiterated its EBITDA margin target of at least 78% of revenue, and a 5% average annual growth in free cash flow between 2017 and 2020.
“Even though we have missed on the revenue [forecasts] in the past, we have met all the non-revenue KPIs,” Chief Executive Rodolphe Belmer said. “Cash flow and EBITDA  have not been missed. We are delivering a financial performance that is leading the pack. Our EBITDA margin stands significantly higher, with a better orientation, than our competitors.”
That is mainly true relative to its biggest competitors, SES and Intelsat. But it’s not true for Telesat, whose EBITDA margins are better than 80%.
Eutelsat did deliver one positive surprise: an expected favorable French government tax ruling that would add 70 million euros ($78.6 million) to Eutelsat’s cash flow. A final confirmation of that assessment is expected within weeks, before Eutelsat closes its fiscal-year 2018-19 books.
In May 14 conference calls, Belmer said dismissed suggestions that Eutelsat join SES, Intelsat and Telesat in investing in non-geostationary orbit satellite broadband constellations.
While some mobile broadband applications might be well served by lower-orbit constellations, Eutelsat’s focus on fixed broadband and video distribution are immune from these new satellite architectures.
“The video segment will be untouched by LEO,” Belmer said. For fixed broadband, which is a focus of the mega-constellations, Belmer said low- and medium-Earth orbit systems will be unable, for now, to provide low-cost antennas acceptable to consumers.
Belmer also said Eutelsat is in fact making a small step into the non-GEO market with a test satellite to launch this year for a planned IoT constellation with Sigfox. Eutelsat is evaluating bids for a group of several satellites to launch as soon as 2020-2021, to be followed by a constellation of 20-30 satellites.
Belmer said these satellites will be built and launched at a price of less than 1 million euros apiece.
Credit: Eutelsat
Eutelsat’s Video division accounts for 67% of total revenue and was down 2.5% in the three months ending March 31 compared to the same period a year earlier. But the company reported stable revenue from its core broadcast business. The division total was dragged down by the continued fall in professional video, which continues to show double-digit percentage revenue reduction. It is now 8% of the division total.
Total video channels on Eutelsat’s broadcast fleet increased 2%, to 7,021 as of March 31, including 1,509 high-definition channels, up 16% from a year earlier. HD channels are now 22% of Eutelsat’s total broadcast portfolio.
Eutelsat said the total consumption of its broadcast business, measured in megabits per second, was up 2% over a year ago.
The uptake of MPEG-4 compression remains well ahead of HD channel count, meaning Eutelsat should not see a large drop in megabits used as HD expands.
Credit: Eutelsat
Eutelsat’s Konnect Africa consumer-broadband business has yet to gain traction following a remarkable string of bad luck.
Eutelsat had leased capacity on Israel-based Spacecom’s Amos-6 satellite, which was destroyed in a September 2016 on-pad explosion of a SpaceX Falcon 9 rocket. The company then leased capacity on United Arab Emirates-based Yahsat’s Al Yah 3.
Al Yah 3 was late in launching and when a European Ariane 5 rocket conducted the launch, it placed the satellite into a wrong orbit. It wasn’t until May 2018 that Yahsat declared Al Yah 3 ready for service.
But in recent months, elections in several large African markets have effectively shut down internet access. In other markets, regulations on importing satellite two-way terminals have been unclear or non-existent, blocking distribution.
Those are temporary glitches, Belmer said, and served to validate the strategy of starting small in Africa with leased capacity before the launch — now set for December — of Eutelsat’s own Konnect satellite, with a throughput of 70 Gbps.
But during the interim, Yahsat has created a joint venture with satellite broadband specialist Hughes Network Systems for Africa, the Middle East and West Asia, using the same Al Yah 3 satellite whose capacity is leased by Eutelsat:
Hughes and Yahsat have expanded their relationship to Brazil with a second joint venture.
Hughes and Yahsat have said their African venture is doing well but they have not gone into any detail. Even so, the combination of these two companies was not foreseen when Eutelsat ordered its Konnect satellite in early 2018.
“We are in competition with Yahsat for the distribution of connectivity services in Africa,” Belmer said. “We both have capacity on Al Yah 3. “Hughes has associated itself to the distribution of this service, so we are de facto in competition with Hughes.”
Belmer said that once Konnect is in service by mid-2020, it will enable Eutelsat to cut prices and stimulate growth. “Al Yah 3 only covers a portion of Africa,” he said.
The Konnect satellite will also target Europe, where Eutelsat’s Ka-Sat satellite is running out of capacity on beams covering some of the highest-demand markets.
Eutelsat is scrapping part of its wholesale distribution strategy for Ka-Sat after concluding that its distributors did not always have the incentive to maximize sales. A Preferred Partner Program with distributors that are focused on satellite internet has been put into place with promising early results, the company said.

3 years later, Global Eagle reconsiders its $550-million purchase of maritime connectivity/content provider

Global Eagle Entertainment is considering the sale of its non-aviation business. Credit: GEE
PARIS — Commercial airline in-flight connectivity and content provider Global Eagle Entertainment has hired Barclays Capital to assess the possible sale of GEE’s non-aviation business, including the maritime division for which it paid $550 million just three years ago.
Los Angeles-based GEE said it expects to conclude its evaluation of what it says have been several offers by this summer but is under no financial or other pressure to conclude a transaction.
The company said the grounding of the Boeing 737 MAX planes affects 26 aircraft using GEE connectivity, with another 40-50 737 MAX aircraft scheduled to be line-fit this year.
GEE Chief Executive Joshua Marks said the 737 MAX issue is likely to reduce GEE service revenue by $3 million to $4 million in 2019, and to cut profit by $1.5 million to $2 million, assuming the aircraft reenters service in August.
GEE reported $166.6 million in revenue for the three months ending March 31, up 6.6% from a year ago. EBITDA was $18.5 million, up 7%.
Twenty-five percent of top-line revenue, and 48% of connectivity revenue, came from the maritime, enterprise and government business that GEE is now putting up for sale.
The company said it had $51 million in cash as of March 31 and more than that as of its May 14 investor call, more than enough to manage the business this year.
GEE purchased maritime content and connectivity provider EMC in July 2016 for $550 million in cash and stock on the assumption that satellites beaming bandwidth and content to airlines could add maritime service. The merged company would generate $15 million in cost synergies in 2017 and $40 million per year from 2018.
GEE and the entire in-flight connectivity market has since been through financial stresses from which it is now recovering. It has reduced staff and other operating expenses and closed facilities.
But while the logic of buying satellite capacity and using it for both aeronautical and maritime connectivity remains valid from a pure bandwidth-purchase perspective, other areas of the business are different enough to make a sale at least potentially attractive.
At the time of the EMC purchase, several industry veterans, including P.J. Beylier of Speedcast, had warned that the aero and maritime markets were very different animals and that the synergies are not obvious:
GEE Chief Executive Joshua Marks now seems to agree, especially as the aero business moves toward high-throughput (HTS) satellites and the maritime business
“[T]he cruise business continues to be competitive,” Marks said. “[C]ruise lines procure a lot of bandwidth. That said, the importance of integrating multiple satellite networks, of having redundancy, has become critically important with the recent failure of different satellites. There are areas where we have taken advantage of joint procurement in the past. For example bandwidth… has been an area where there has been good opportunities between aviation and the maritime enterprise and government unit.
“We have kept the legal and operational structure of the [maritime, enterprise and government] entity separate. Part of that is driven by the fact that aviation connectivity continues to be a very unique business, one that requires a very significant amount of engineering know-how and an area where we have differentiated ourselves in program execution. It’s very, very challenging to drive aviation connectivity from concept through to certification and then successful live passenger service.
“So we have a maritime enterprise and government unit that has contributed a lot of great technology and a lot of great capabilities…. It is on a very strong trajectory right now in terms of cash flow improvement. So we’re actively considering what we’re doing but we’re under no pressure to do so. We’re being purely opportunistic about how we’re approaching it.”
Aviation uses modems that are not the same as the maritime, enterprise and government division and separating them will not be difficult, Marks said.
GEE said its aviation connectivity revenue grew by 12%, to $45.3 million, in the three months ending March 31. That business has grown by 30% since the trough in mid-2018.
Credit: Air France
Southwest Airlines and Air France activated a combined 22 aircraft with GEE connectivity gear in Q1, with 15 more awaiting activation. The company forecasts that it will have added more than 100 new aircraft by the end of the year, in addition to the Q1 additions.
GEE advertises its Airconnect Ku-band service as capable of delivering 500 Mbps to a given plane.
Marks said moving to HTS satellites allows the company to fine-tune its bandwidth purchases, avoiding large capacity buys in advance of customer use. “In essence, we can now be more surgical in our bandwidth acquisitions,” he said, adding that bandwidth-lease contracts in general are renewed at lower rates.
GEE said it had recently won an unnamed, large new customer in Europe for connectivity services both Boeing and Airbus single-aisle aircraft. This customer, which is already using GEE-provided content, is set to become the company’s second-largest customer after Southwest. Installations will become in 9-12 months.
GEE President Per Noren said the new customer will likely exceed the Air France order for 113 planes.

UrtheCast says its Deimos Imaging subsidiary, up for sale, had high operating loss in Q1

UrtheCast has opened bidding for the sale of its Deimos Imaging division, including the Deimos-1 and Deimos-2 satellites. Here are the financial results from Deimos. Figures are in thousands of Canadian dollars. Credit: UrtheCast
PARIS — Satellite geospatial imagery and service provider UrtheCast Corp. said its Deimos Imaging subsidiary, which it is trying to sell, reported a 15% increase in revenue in Q1 2019 but a still-substantial operating loss.
UrtheCast said Spain’s Banco de Sabadell has eased some repayment requirements for the loan, valued at 25 million euros ($28 million), taken out in 2015, but the Spanish company’s indebtedness will weigh heavily in negotiations for the sale of Deimos.
In a May 14 report to shareholders, Canada-based UrtheCast said it hopes to generate sufficient proceeds from the Deimos sale to pay off the Sabadell loan.
The Deimos-1 satellite was launched in 2009 and has a designed operational life of 10 years. The higher-resolution Deimos-2, launched in 2014, has at least a seven-year life. Earth observation satellites usually exceed their estimated operating lives, but the likely need to replace the two spacecraft in the near term will be another factor in the sale.
Here are Deimos’s contract obligations as of March 31. Credit: UrtheCast
UrtheCast’s decision to sell its principal satellite assets to shed Deimos’s operating costs is part of UrtheCast’s planned path to regain financial viability and build its own UrtheDaily optical satellite constellation and, later on, its OptiSAR radar satellites using proprietary technology:
The company had just 2.96 million Canadian dollars ($2.2 million) in cash as of March 31, insufficient to carry it though 2019 and maintain the business. It is seeking additional financing beyond a $12-million, one-year loan from Balzano  Investments Ltd., which carries a 14% interest. Balzano was given a seat on the UrtheCast board.
UrtheCast management contributed to the transaction in exchange for share-purchase warrants.
UrtheCast reported net finance charges of 1.64 million Canadian dollars in Q1 2019, compared to 158,000 Canadian dollars a year ago, reflecting the weight of the $12-million loan.
Another source of UrtheCast revenue is processing and distributing imagery for the PanGeo Alliance of Earth observation satellite operators.
What UrtheCast’s relationship will be with the PanGeo group after the sale of Deimos is unclear. The company said “ a material portion of its EO business revenue will be derived from the distribution and value-added services it provides… other operators in the PanGeo Alliance.”
In a statement filed May 14 with the Toronto Stock Exchange, UrtheCast said it booked no engineering or value-added revenue in the three months ending March 31, compared to 3.25 million Canadian dollars a year earlier.
The company said “progress delays incurred by its key subcontractors in completing milestones under its engineering and value-added services contract” was the reason.
UrtheCast reported a net operating loss of 1.4 million Canadian dollars in Q1 2019 on revenue of 4.425 million Canadian dollars.

U.S. DARPA says Blackjack LEO constellation demonstrator on track with Airbus, Telesat, Blue Canyon; selection of winner in 2020

Credit: DARPA
WASHINGTON — The U.S. Defense Department’s Blackjack program to launch a fleet of small, commercially built low-orbiting satellites to test various military sensors is on track to complete its preliminary design review by year’s end before moving to satellite construction.
“I couldn’t be happier with the progress,” said Paul Thomas, Blackjack program manager at the U.S. Defense Advanced Research Projects Agency (DARPA). “I have more payloads and buses than I expected. It’s going to be hard, going into Phase 2 and Phase 3, to start thinking about how we’re going to do the down-selects, to narrow down to what is actually going to fly.”
DARPA in late 2018 signed one-year study contracts with two contractors building separate mega-constellations of broadband satellites: Airbus Defence and Space, for the OneWeb constellation’s satellite bus; and Telesat of Canada, which is designing its LEO constellation.
Blue Canyon Technologies, which builds small satellite platforms, is the third Blackjack partner. All three companies were awarded contracts valued at between $1.5 million and $3 million each in late 2018.
How Blackjack ultimately will fare in a tug of war between the U.S. Air Force and the Pentagon’s new Space Development Agency (SDA) is anyone’s guess. The Air Force’s Space and Missile Systems Center is already a Blackjack partner, and Thomas said SDA appears to share the program’s goals.
Paul “Rusty” Thomas. Credit: U.S. Air Force
“I wouldn’t want to speak for exactly where SDA is going, but I do believe some of the elements coming out of Blackjack will be foundational for what SDA wants to do,” Thomas said here May 8 during the Satellite 2019 conference.
Blackjack is not a hosted-payload program. Rather, DARPA would purchase satellites coming off the OneWeb or Telesat LEO or Blue Canyon production lines, strip out payload of no interest to Blackjack, insert DARPA sensors and then launch them separately.
The goal is to spend no more than $6 million per satellite including its launch.
Blackjack is a manifestation of an increasingly common view among U.S. military space officials that a network of small satellites can perform many of the duties now given to larger satellites, while reducing the risk of having large, identifiable targets in space.
“A lot of different missions — IR sensors, EO IR, PNT [positioning, navigation and timing, such as GPS], RF systems — all benefit form the LEO proliferated approach,” Thomas said. “A 1-meter sensor in GEO [orbit] can be reduced to a 3-centimeter aperture at 1,000 kilometers,” the presumed orbit for the initial Blackjack satellites.
The current schedule is to complete the Phase 1 preliminary design reviews this year, move to critical design review in 2020 and then launch in 2021 and 2022.
This diagram shows one way the DARPA Blackjack satellites would integrate with a commercial LEO broadband constellation, communicating with teh commercial satellites but operating military payloads in potentially different orbits. Credit: DARPA
Blackjack envisions ordering two satellites first before contracting for 18 more for a 20-satellite initial constellation.
The savings would come from letting the industrial contractors absorb the nonrecurring engineering charges for the platforms’ development, with DARPA coming in the the middle of these companies’ production runs with a 20-satellite order.
Even so, the current Phase 1 of Blackjack includes multiple design reviews of the satellite buses as well as potential DARPA-selected payloads. For example, Blackjack wants its satellites to communicate with each other in space, whereas OneWeb’s first generation does not include inter-satellite links.
“Their bus does a wonderful job of talking to Ku- and Ka-band, but it doesn’t have 30, 40 or 50 kilograms of extra space,” Thomas said, referring to OneWeb. They have a wonderful application for hosted payloads. But Blackjack is not a hosted payload. We want to put payload combinations at different altitudes, in different orbits, and not just be exactly where the commercial folks are.”
The Blackjack satellites would not operate the commercial service planned by the commercial constellation operator, but they will have enough payload commonality to be able to communicate through the commercial network, once having added military encryption.
Thomas’s background is worth noting: He was director for SpaceX’s Dragon capsule, a director of technical operations at the former Orbital Sciences, now Northrop Grumman Innovation Systems, and manager of launch systems at Teledesic, a late-1990s attempt to do what OneWeb, Telesat LEO — and SpaceX, with its Starlink constellation — propose to do now.

Avio reports 10%-plus increase in revenue, EBITDA for Q1 2019; expects Ariane 6 contract soon

Credit: Avio/Arianespace
PARIS — Rocket hardware builder Avio S.p.A. reported double-digit increases in Q1 revenue and adjusted EBITDA compared to last year and said it expected to sign contracts for its work on 14 Ariane 6 rockets in the coming months.
Avio is prime contractor for Europe’s Vega light-lift vehicle, which has been successful in its first 14 flights, the latest being in March. An upgraded Vega, called Vega-C, is scheduled to make its inaugural flight in early 2020.
Avio’s Vega first stage also serves as the strap-on booster for the heavy-lift Ariane 6 rocket, which comes with two-booster and four-booster versions.
Ariane 6 is scheduled to make its first flight in mid-2020. A contract for the first 14 rockets after that inaugural launch had been held up for months as the Ariane 6 contracting team, led by ArianeGroup, pressed European governments for concrete guarantees on Ariane 6 missions between 2021 and 2023.
A recent agreement by European Space Agency (ESA) governments permitted ArianeGroup and Arianespace to sign a 14-rocket production contract on May 6.
Avio said it will in turn sign contracts for its work on the 14 rockets with ArianeGroup in the coming months.
The question for Avio is whether the Vega rocket will be able to capture the currently booming small-satellite launch market by keeping its prices competitive and its Vega launch rate high enough.
The vehicle is expected to launch four times in 2019, including two launches of the United Arab Emirates FalconEye optical reconnaissance satellites.
Vega’s Small Satellite Mission Service (SSMS) is designed to provide relatively low-cost launch to low Earth orbit for cubesats stacked onto a dispenser and then released one by one.
The first SSMS mission is now sold out and is scheduled to carry more than 40 satellites for its first launch in September.
The ESA agreement that cleared the way for the 14-rocket Ariane 6 order included a clear demarcation between payloads to launch on Vega-C, and those to launch on the Ariane 62 rocket, which is fitted with two strap-on boosters.
Payloads weighing 200-2,350 kilograms — the Vega-C limit — will be assigned to Vega-C by Arianespace. Satellites weighing more than that will be assigned to Ariane 62. Payloads weighing less than 200 kilograms will be assigned to whichever vehicle has the earlier launch availability.
For the three months ending March 31, Avio reported revenue of 82.6 million euros ($73.6 million), up 10% from the same period a year ago. Adjusted EBITDA was 7.1 million euros, up 13% from a year earlier and equivalent to 8.6% of revenue, compared to 8.3% a year ago.
Avio said that as of March 31 it had cash and equivalents totaling 48.7 million euros, unchanged from Dec. 31.
Avio Chief Executive Giulio Ranzo said 2019 is a crucial year for the company as it conducts a planned total of four Vega and five Ariane 6 missions.

Gogo sees higher passenger Wi-Fi use; ADS-B deadline is IFC headwind; says IS-29e satellite failure shows Ku- advantage

Gogo’s 2Ku antennas during installation. Credit: Gogo
WASHINGTON — In-flight connectivity provider Gogo Inc. reported increased passenger take-up rates on commercial flights but said last-minute U.S. airline purchases of ADS-B aircraft surveillance gear to meet a regulatory deadline had slowed IFC installations on U.S. business aircraft.
Gogo also pointed to the recent failure of the Intelsat 29e satellite as evidence of the inherent superiority of Ku-band and its large installed base of satellites compared to Ka-band.
In a May 9 investor call, Gogo Chief Executive Oakleigh Thorne and Chief Financial Officer Barry Rowan portrayed the company has emerging from the de-icing problem that took many Gogo terminals out of service in 2018, the American Airlines decision to drop Gogo’s air-to-ground system in favor of Viasat Inc.’s Ka-band satellite solution and the profitability issues that affected all IFC providers.
Thorne said the de-icing issue, in which aircraft de-icing fluid seeped into the Gogo gear, is now over, with 22,000 flights conducted after Gogo’s remedial service, all without incident.
The 550 American Airlines planes that are quitting Gogo for Viasat will all have had their Gogo equipment dis-installed by mid-year.
The business model challenges for IFC providers that had put some of them on a watch list of possible failures have now eased as Gogo and its competitors have pulled back from money-losing deals.
Now is the time for cleaning up the balance sheet. Gogo recently closed a $925-million debt offering at 9.875% due 2024, replacing 12.5% notes.
Gogo told investors in February that it was likely to conclude a transaction by May with strategic of financial investors to cut its debt:
The May date now looks unlikely, but Rowan said discussions have narrowed to a strategic investor.
“This is an extension of conversations we had last fall,  when we were thinking about selling a division,” Rowan said. “Now it looks more like a strategic investment in the company that would come along in conjunction with some kind of commercial arrangement. It would bring in some capital to the company.”
Gogo said passenger take rates — the percent of passengers on Gogo-equipped flights that use the service — increased to 13.9% from 10.5% a year ago on U.S. commercial flights, and to 13.6% from 12.2% on flights in the rest of the world, where Gogo’s growth lies.
Thorne said just 35% of commercial aircraft outside North America are IFC-equipped by Gogo and its competitors, leaving a long runway for growth in the coming years.
Thorne said Gogo has detected what may be a trend in airlines moving to offer free Wi-Fi to passengers, which will increase take rate and could be used as a marketing argument. Gogo customers Virgin Australia and Japan Air Lines have done this, and he suggested that JAL’s market-share lead over rival ANA is in part due to the free-Wi-Fi policy.
The U.S. Federal Aviation Administration (FAA) set an end-2019 deadline for business aircraft to be equipped with ADS-B tracking equipment.
“We underestimated the impact,” Thorne said. “Apparently more owners than we thought procrastinated, and the MROs [maintenance, repair and overhaul] and dealers are now packed with planes trying to complete the install by the year’s end. These installs are crowding out budgets for IFC, but also literally crowding out shop floor space, and dealers are booked for IFC installs.”
The decline in aircraft on line in North America for the period is due to American Airlines moving part of its fleet to Viasat. Credit: Gogo
The sudden failure of the Intelsat 29e Ku-band satellite in April forced fleet operator Intelsat to scramble to reassign customers to other Intelsat satellites and, when necessary, onto satellites operated by competitors SES and Telesat:
Gogo has said its decision to use Ku-band for its satellite-based IFC offer was mainly because of the large installed base of Ku-band satellites. Thorne said the IS-29e experience validated that decision. His comments may be read as an implicit dig at Viasat and Inmarsat, competitors that have Ka-band IFC offers.
“Because 29e was in the Ku constellation, customers could be moved rapidly to other satellites, and Intelsat has been able to institute restoration agreements,” Thorne said. “We were not on 29e, but had we been we would have been able to recover quickly.
“It highlights the risk airlines run if the rely on a closed Ka- constellation of three or four satellites that are  meant to cover the entire globe. If one of those satellites is knocked out, that airline could go dark for a substantial portion of the globe, until their provider managed to launch another satellite. Relying on three or four satellites for global coverage is like playing Russian roulette with passengers’ connectivity needs.”
Gogo has bandwidth-lease contracts on 30 satellites owned by 12 operators, including Intelsat. “Most of our providers can move our adage to another satellite within hours, or weeks at most, if they were to suffer the same issue Intelsat just experienced,” he said.
Airline customers have said they would like to see contracts that account for the fact that their aircraft are spending relatively little time inside the satellite beam whose capacity they have leased.
Satellite builders are moving toward flexible beam-forming technologies that can follow the traffic, but a business model that permits airlines to pay only for bandwidth they use has yet to emerge.
Thorne said Gogo is pushing in this direction with its satellite providers.
“Today we lease capacity 24/7, but we only use it when planes are flying underneath it,” Thorne said. “This architecture suffers low capacity utilization and is not particularly conducive to the extreme mobility of the aero market, where demand moves around the planet at all hours of the day.
“We are working with our satellite partners on dynamic beam-forming technologies that are far better tuned to extreme mobility. They’ll give us ability to aim beams where we need them, when we need them, thereby dramatically improving capacity utilization and lowering per-megabit costs in the future.”
Thorne said the open-architecture approach of Gogo will allow the company to adapt to new satellite technologies more quickly than would be possible if it were tied to a given fleet operator.


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