Adrian Ballintine, CEO, NewSat
NewSat, the Australian satellite company, hopes to launch a plethora of satellites during the next few years and become an emerging force in the satellite market.
The company is a big believer in Ka-band and could announce plans for multiple high-throughput satellites in the near future. Adrian Ballintine, CEO, NewSat, talks about how the company’s ambitious strategy is taking shape, and how the operator aims to be a key player across multiple regions, with up to 17 new satellites commissioned in the next few years.
VIA SATELLITE: How much capacity do you plan to have sold on Jabiru-1 by the time it launches?
Ballintine: NewSat fully intends to populate as many orbital slots as quickly as it can. It is driven in that regard by demand, and in terms of which slots are available. Certainly demand in the Middle East and over South Asia and into Africa is strong, and because of this Jabiru-1 already has about 33 percent of the capacity sold on it. We do not expect to sell much more on Jabiru-1 at the moment. We hope to announce Jabiru-3 and Jabiru-4 during this calendar year, and we will pre-sell the required amount of capacity to get those satellites funded. Those satellites are carrying footprints over the Middle East and into Africa, and it is clearly those areas that are driving our business.
VIA SATELLITE: Could you tell us the significance of the recent deal with Measat regarding the levels of capacity you hope to have sold on the Jabiru satellites?
Ballintine: Measat has taken a 15-year, $186 million contract to broadcast into South East Asia for DTH and some other existing businesses. That is a good and solid 15-year piece of business for Jabiru-1. We have taken capacity on Measat-3b, and that capacity is for the oil and gas and mining clients of ours in Papua New Guinea and Australia, predominantly Western Australia. We also have the naming rights on that satellite, so that will be called Jabiru-2.
VIA SATELLITE: Which growth markets will NewSat be targeting going forward?
Ballintine: I think we are different from most of the world’s satellite providers, which are targeting DTH in 80 percent of the world. We are in the middle of oil and gas and mining and government. From our perspective, in areas such as the Middle East and Africa, we feel there are great opportunities, but also you have countries like Indonesia and other areas of Asia that are very interesting for us as well. Having said that, we have aspirations that Jabiru-5 will be a satellite over Latin America and this will serve environments similar to those in Australia, so predominantly oil and gas and mining companies. We have a lot of business in that very niche market and we think those areas will continue to be very good for us going forward.
VIA SATELLITE: Why did you decide to go with Lockheed Martin for Jabiru-1 and what process did you go through to make that decision?
Ballintine: As a first time satellite purchaser, the process is quite exhausting. We enlisted consultants to help us and Argosat advised us. They were very helpful initially in determining the benefits of all the satellite suppliers: Boeing, Space Systems/Loral, Astrium, Thales, Lockheed Martin, etc. So, there is plethora of companies to choose from. We had our own internal people who were involved in procuring a number of satellites around the world for a number of years. Ultimately, we made a decision on performance and price and the ability of the manufacturer to build to our specifications. We wanted a very specific Ka-band satellite that would perform like a Ku-band satellite with multi-spot, steerable and regional beams. Lockheed Martin was able to do that better than anyone else, at the best time available and at the best possible price.
VIA SATELLITE: With NewSat looking to order a number of new satellites, are you tempted to order all electric satellites from a provider like Boeing?
Ballintine: It absolutely comes into our thinking. This is a very interesting initiative from Boeing and one that cannot be ignored. The price/performance ratio and the time it takes to build the satellites is something we are going to watch eagerly.
VIA SATELLITE: In terms of launch services, would you consider a new entrant like SpaceX at this stage?
Ballintine: When you are a small public company attempting to become a big public company, there are certain behaviors that behoove you and your shareholders. I guess from our perspective, we would like to be as “risk free” as possible in our early stages of development and would be more likely to go down the tried and true path. Lockheed Martin and Arianespace are reflections of that. I think it is fantastic that there are innovations in space and ground technology.
VIA SATELLITE: What would be the total investment in Jabiru-1 to Jabiru-5?
Ballintine: If you worked it out at $400 million per initiative, then you are looking at a total investment of $2 billion in capital expenditure. It is an interesting exercise. If you look at Jabiru-1, it is going to pull something like $2.5 billion in revenues during a 15-year timeframe with very substantial margins. These are healthy, solvent business models. We would expect to be able to replicate that in a number of instances.
VIA SATELLITE: Are you likely to commission more satellites in the near future?
Ballintine: Jabiru-5 will be announced this year, but I am not suggesting that it will be fully funded this year. Five Jabiru satellites will be announced this year with clear customer patterns. We think we will have the launch partners and manufacturers named. From there, we have eight orbital slots and the ability to launch any number of satellites. During the next three years, we will very aggressively attempt to populate those slots with as many satellites as we can. Ultimately it could be between nine and 17 satellites.
VIA SATELLITE: Will you need to gain access to funding in the next two years?
Ballintine: The most common way to get funding for new satellites has been to use organizations like EXIM Bank and Coface. The deal with Lockheed Martin means we are supporting around 750 jobs in the United States as well as in France. The Export-Import Bank and Coface are supporting these initiatives, so approximately 75 percent of the capital on the first satellite is provided by them. On future satellites, there is a range of financial instruments we can look at. There are bonds and other equity options and given the way we have structured the financing on Jabiru-1, there is no reason why we can’t work with Coface and EXIM Bank to help fund Jabiru-3, Jabiru-4 and Jabiru-5. We might use bonds or equity for the balance, or we might use other instruments to gain funding.
VIA SATELLITE: How do you view the Ka-band opportunity for NewSat?
Ballintine: The world is populated with a lot of Ku-band capacity at the moment. You have to coordinate with your neighbors and that can be difficult. If you are able to construct satellites where Ka-band is able to behave like Ku-band, then you have a whole new world to aim it, and you solve some of the technical issues there are with Ku-band. I think the way we intend to construct our satellites is to use Ka-band like Ku-band, and for that reason it is attractive to sectors such as oil and gas, mining and the military. The military has decided to standardize Ka-band technology with their WGS program. Inmarsat has gone with Ka-band technology. There is a whole new world of band opportunity.
VIA SATELLITE: NewSat is looking to launch a number of satellites. Is there a hosted payload opportunity for NewSat?
Ballintine: I think there is. If you look at the U.S. military, it is clear that they intend to exploit as many commercial payloads with other providers as they can. Clearly, in Australia, we have a very good relationship with the U.S. military. We operate teleports that provide service to them and we would expect to be able to supply potential payloads.