Update on the Latin American Satellite Market

by B.H. Schneiderman

Rio de Janeiro, Brazil, March 5, 2012--The Latin American satellite market continues to grow in terms of applications such as Direct-to-Home (DTH), HDTV, Cellular Backhaul & Trunking,  and government programs aimed at bridging the Digital Divide.  International satellite operators such as SES and Intelsat are forced to review their strategy and are bringing more capacity to serve the region in the next 5 years to be better positioned for relevant growth in transponder capacity and to be able to meet the growing demands of the market.

As example of growth in the market, DirecTV Group reported during the month of February 2012 a 16% jump in fourth-quarter profit as the satellite television company added nearly four times as many Latin American subscribers than in the U.S. In the fourth quarter of 2011, DirecTV said it added a net 590,000 subscribers in Latin America, up from 378,000 subscribers tacked on a year earlier. "Latin America is now the core business," writes Bernstein Research analyst Craig Moffett. Bernstein expects DirecTV's Latin American operations to account for around 40% of revenue by the end of 2015, from around 18.5% at the end of the fourth quarter.

In our October 2011 issue, we featured the Brazilian market which comprises about half of the Latin America market for satellite products and services and transponder capacity. In this article we will focus on the other countries in Latin America specifically countries that are implementing domestic satellite programs in order to get a bigger picture of the major trends in the Latin American market.

MEXICO

The Mexico Government announced last December 2010 a contract with Boeing to design and build the Mexsat communications satellite system to provide mobile L-Band for government and civilian broadband communications, while supporting humanitarian needs and enhanced coverage for domestic communications in Mexico. The system will consist of two Boeing 702 HP Geostationary satellites, Mexsat-1 and Mexsat-2, and one FSS satellite, Mexsat-3, which was subcontracted out to Orbital Sciences Corp.

The contract with the Mexican government is valued at approximately US$1 billion contract to build a three-satellite system and two ground sites for use in civil communications and national security. Each Boeing satellite will supply 14 kilowatts of power through five-panel solar array wings that use high-efficiency, ultra triple-junction gallium arsenide solar cells.

The satellite to be built by Orbital Sciences, Mexsat-3 will provide full coverage of Mexico and its territorial waters and relay civil communications for socioeconomic development, the company said in a statement. The first is slated for launch by the end of 2012 by Arianespace.  The Mexican Communications and Transport Ministry has contracted with Europe’s Arianespace consortium to launch the Mexsat 3 satellite in late 2012 as a co-payload aboard a heavy-lift Ariane 5 rocket or as the sole payload on a Europeanized version of Russia’s Soyuz vehicle. The contract was signed in June 2011.

Mexsat-3 will be based on Orbital’s STAR-2 platform, will generate approximately 3.5 kilowatts of payload power and carry 12 active extended Ku-band and 12 active extended C-band transponders. The spacecraft will provide communications services to Mexico and its surrounding waters from the 114.9 degree West Longitude orbital slot. In addition to the MEXSAT-3 spacecraft, Orbital will also provide the FSS ground segment, including the satellite command and control ground equipment and software as well as training and operational documentation.

The two ground sites in Mexico will be created with advanced beam-forming flexibility to direct mobile user spot beams to government agencies operating in Mexico and its nearby seas, including the Pacific Ocean and Gulf of Mexico. Craig Cooning, chief executive of Boeing Satellite Systems International, said the system marks the fourth-generation of satellites provided to Mexico by Boeing for security and communications needs.

The Boeing Company has awarded a contract in September 2011 valued at approximately US $40 million to ViaSat  to develop a ground-based beam forming (GBBF) system for the Mexican Satellite System. The beam forming system is designed to operate with the Boeing L-band geomobile satellite system being provided for Secretaria de Communicaciones y Transportes (“SCT”) of Mexico.

ViaSat was contracted to supply Boeing with GBBF processors, the control and management system, and the uplink beacon stations to be deployed in two ground stations in Mexico City and Hermosillo, Mexico. The system creates hundreds of small, flexible, adaptive "spot" beams on the earth that link small, handheld satellite devices. While the beams are projected down on the earth by the satellite, the GBBF system performs the actual beam-shaping signal processing.

Another subcontractor to Boeing, Hughes will provide the ground communications network for MEXSAT, which will be installed at two gateway sites, consisting of satellite base stations, core cellular network switching and related equipment, and customer care and billing systems.

“Mobile satellite broadband technology is ideal for government, military, and emergency communications, particularly in countries with limited terrestrial infrastructure,” said Matthew Mohebbi, vice president and general manager of Mobile Satellite Systems at Hughes. “That’s why today more and more governments are showing considerable interest in owning their own satellites for use by their defense, government, and public safety agencies. Mexico is one of the first to deploy its own mobile satellite system and this may become a trend as nations such as Korea, India, and Australia consider following suit.” Besides the ground network, Hughes is also building a range of reference user terminals for maritime, aeronautical, and high-speed vehicular applications. These new voice and data terminals will leverage a common, flexible architecture so that different antennas and amplifiers can be employed to build various types, such as handheld portables, on-the-pause units, and terminals with rooftop antennas for different uses.

One recent development in Mexico is the sale of the national satellite operator Satelites Mexicanos (Satmex) to a holding company in January 2011. Nacional Financiera (Nafin), as trustee, executed the sale of 100% stake of Satelites de Mexico (Satmex) to Holdsat, a group comprised by creditors and investors, for US $6.25 million dollars. The federal government will no longer be a shareholder and will receive $1.25 million for 20% of its shares, and will reserve its satellite capacity from 7% in this system, explained, Gerardo Sanchez Henkel, legal director of the Secretariat of Communications and Transport ( SCT).

The new owners of the Mexican satellite system will assume debt of $198 million dollars and will make a fresh capital injection of $90 million dollars, through which the company can get funding to put into orbit the Satmex 8 that will replace the Satmex 5, according to media reports.

Space Systems/Loral (SS/L) announced in May 2010 that it has been selected by Satmex to build Satmex 8, a high-power C- and Ku-band satellite that is intended to replace Satmex 5 and will provide Fixed Satellite Services (FSS) in both North and South America. The new satellite will augment the current Satmex fleet in providing services such as broadband, voice and data transmission, and video broadcasting. Satmex 8 is a 24 C and 40 Ku-band transponders satellite and it is being designed to be located at 114.9 degrees West. Satmex 8 is based on SS/L’s high power LS-1300 spacecraft bus which provides the flexibility for a broad range of applications. It has a planned mission life of 15 years.

Satmex has selected International Launch Services (ILS) to launch the Satmex 8 satellite into geostationary transfer orbit on an ILS Proton from the Baikonur Cosmodrome in the third quarter of 2012.   

Meanwhile, in September 2011 International Launch Services (ILS) launched operator SES’ QuetzSat-1 satellite into orbit last month on board a Proton Breeze M rocket.  The Ku-band QuetzSat-1 was designed as a 20-kilowatt broadcasting satellite to provide advanced DTH television coverage over Mexico, the United States and Central America. The spacecraft is based on SS/L’s 1300 satellite platform and carries 32 Ku-band transponders.. The QuetzSat-1 satellite positioned at the 77 degrees West orbital slot is to be used in part by Dish Mexico, an EchoStar joint venture, for Direct-To-Home (DTH) services in Mexico and for Dish Network in the United States.

EchoStar has leased the entire capacity of QuetzSat-1 for 10 years.  SES said the satellite is an important part of the company’s current satellite expansion program.

ARGENTINA

An Argentinan company, Empresa Argentina de Soluciones Satelitales S.A. (AR-SAT) is  planning to launched three domestic communications satellites,  with the first one  to be launched in 2013. AR-SAT is a government-owned corporation which started operating in July 2006. AR-SAT has exclusive rights to operate and commercialize geostationary orbital position 81 degree West in Ku-Band (North & South America) and C-Band (Hemispheric coverage). AR-SAT holds rights over the engineering and development of national satellites to be manufactured within the scope of the Argentine Geostationary Satellite Project, as started back in December 2007 upon the signing of a contract with an Argentine corporation named INVAP. The Argentine government transferred NAHUELSAT’s operational assets to AR-SAT. AR-SAT 1 satellite development, production and integration will be done in Argentina.  AR-SAT has scheduled the launching of at least three geostationary satellites in geostationary positions 81 and 72 West starting in 2013.  AR-SAT will also  upgrade and expand the Benavidez Satellite Control Station.

Astrium and Thales Alenia Space were awarded contracts by AR-SAT to provide components for ARSAT-1 satellite. Thales Alenia Space will provide payload components for the first argentine satellite and Astrium the hardware of the unit processor that hosts the software designed by Arsat and Invap engineering team, in Argentina. Astrium was also awarded with the central cylinder of the satellite and other components for ARSAT-1 thrust subsystem. ARSAT-1 is the first of the argentine geostationary satellite fleet under the SSGAT Program (Argentine Telecommunications Geostationary Satellite System), and Invap, the regional observation satellite manufacturer, was selected by Arsat as prime contractor of ARSAT-1, integrating all these components. ARSAT-1 is designed with 24 Ku-band transponders and positioned at the 71.8º West orbital slot. The spacecraft aims to provide data, telephone and television transmission services for Argentina, Chile, Uruguay, and Paraguay.

AR-SAT and Arianespace has signed the launch Service & Solutions to orbit the Arsat-1 satellite by mid-2013. Weighing about 2,900 kg at launch, Arsat-1 will be placed into geostationary transfer orbit by an Ariane 5 or Soyuz launcher from the Guiana Space Center, Europe’s Spaceport in French Guiana.  

VENEZUELA

Venezuela launched in 2008 a domestic satellite  called Venesat-1, also known as Simón Bolívar satellite, the first Venezuelan satellite. It was designed, built, launched, controlled and monitored by the CGWIC subsidiary of the China Aerospace Science and Technology Corporation. It was launched on a Chinese Long March 3B carrier rocketat the Xichang Satellite Launch Center in October 2008. Venesat-1 is operated by Venezuela's Ministry of Science and Technology and has 12 C-Band Transponder and 14 Ku-Band Transponders and has expected service life of 15 years. It is based on the DFH-4 satellite bus. The satellite occupies an orbital slot, 78-West, designated for Uruguay and ceded to Venezuela by mutual accord.

The Simón Bolívar satellite will provide services for the following segment in Venezuela:

· 10,200 schools will receive tele-education and internet services, benefiting an estimated educational population of 2 million students.

· 7,700 clinics to receive telemedicine services, remote diagnostics and medical consultations, benefiting more than 1 million patients.

· 340 small business in small towns will facilitate inventory control, purchase products and other network processes, which will benefit 70 000 users.

· 108 village of 500 inhabitants benefit through the phone service during the first quarter of 2009, benefiting over 1 million inhabitants.

· 300 sites of border protection, defense and protection of terrestrial, aquatic and  Venezuelan airspace, allowing among other things, the fight against drugs.

· 1,000 sites to address oil wells, barges, ships, pumps, among others.

To lessen dependence on foreign antenna manufacturers, the Venezuelan government through its National Center for Telecommunications Research and Development  (CENDIT) is developing locally-made antennas to receive signals from the Simon Bolivar satellite.

BOLIVIA

China will launch Bolivia’s first telecommunications satellite, Tupac Katari, into orbit in December 2013, The satellite is being built in China under an agreement signed in December 2010 between the Bolivian Space Agency and China Aerospace Science and Technology subsidiaryChina Great Wall Industry Corp.. Bolivian and Chinese engineers will be working together on the final design of the satellite, which is scheduled for completion in March 2013.  Bolivia is paying approximately US$ 300 million for the Tupac Katari project. The General Treasury of Bolivia is contributing US$ 45 million to pay the bill. The remaining US$ 250 million is being paid through a loan issued from the Development Bank of China.

Ma Xingrui, president of the China Aerospace Science and Technology Corp., said the satellite will promote the Bolivian government's ability to communicate during emergencies and for defense purposes.  The company also built Venezuela's Venesat-1 spacecraft.  Zhao Xiaojin, head of the aerospace department at the China Aerospace Science and Technology Corp, said China will help developing countries build up their aerospace industries.  "We encourage and help the countries to start their satellite industries from small-scale satellites," Zhao said. "We will provide not only service related to satellite manufacturing and launching, but also personnel training and transfers of technology, which will help the countries build up their own satellite industries."  Ivan Zambrana, Executive Director of the Bolivian Space Agency also announced that China will be helping  Bolivia launch a second satellite in the next three years. "It will be a remote-sensing satellite that runs in a low orbit, which could be used for civilian services such as detecting minerals and oil, forecasting natural disasters, and so on," Zambrana said. 

Conclusion

As we have seen, there is a lot of activity in the Latin American satellite market.  The staging of important global sporting event in Latin America such as the FIFA World Cup and the Olympics in the coming years will only sharpen the focus on this growing market.