NewSat Jabiru-1 Contracts Keep Rolling In

[Satellite News 12-12-11] Australian satellite operator NewSat has added to its dramatic surge of Jabiru-1 pre-launch activity by signing a new 10-year, $67.2 million contract with an unnamed Middle Eastern telecommunications provider for Ka-band transmission capacity on the satellite.

   The deal, announced Dec. 12, contracts NewSat’s Ka-band satellite capacity to provide high-speed Internet and data services across a range of high-demand regions within the Middle East. The new agreement increases the operator’s total value of Jabiru-1 pre-launch contracts to $346 million.

   NewSat Founder and CEO Adrian Ballintine said that while his company could not disclose the customer details due to commercial and competitive reasons, the multi-million dollar contract was derived by a rapidly growing demand for Ka-band satellite capacity across the Middle East.

   “Ka-band blends perfectly for this market and our new carrier-grade telecommunications customer sees the delivery of their Internet and data services via Ka-band as a major competitive advantage,” Ballintine said in a statement. “It’s a very exciting time for NewSat, as we continue to achieve key milestones in the launch of Jabiru-1, transforming us into a global satellite operator.

   NewSat’s Middle East Ka-band victory follows its two recently announced contractual partnerships with Arianespace and Lockheed Martin Commercial Space Systems. Arianespace will launch Jabiru-1 in the second half of 2014. Lockheed Martin will build the new system and integrate a Ka-band payload that will aim to provide high-powered coverage across growth regions over the Middle East, Africa and Asia.

   Lockheed Martin will immediately begin building the Jabiru-1 based on its A2100 series spacecraft to provide more than 7 gigahertz of Ka-band capacity for 15 years. The manufacturer said the new design would feature significant options in allocating the capacity among a combination of high-powered beams.

   “The agreement with Lockheed Martin gives considerable flexibility with respect to the capacity of the satellite, which can be adjusted to meet NewSat’s final requirements. The financial terms of the agreement are confidential and cannot be released at this date,” the companies said in a joint statement.

   NewSat also confirmed that it was using export-import agency financing to support its efforts. The operator already made an initial payment to its contractors and will continue to make required milestone payments under the terms of its agreements. “In anticipation of the condition in the Lockheed Martin contract that financing be completed by the end of the fiscal year 2012, we lodged our applications earlier this year with export credit agencies U.S. Ex-Im Bank and Coface. Lockheed Martin actively supported our application when lodged and will continue to work with us in our activities with the U.S. Ex-Im Bank until its conclusion,” Ballintine said.

   The satellite already gained traction in its key target regions by building its customer markets along a variety of verticals. In September, NewSat signed a $40.2 million, three-year contract with Quicklink Communications to lease transmission capacity on the Jabiru-1 satellite. Quicklink, a Middle Eastern telecommunications provider delivering enterprise services to governments and corporations across the Middle East, Africa and Asia, said it would use the Jabiru-1 Ka-band satellite capacity to serve a range of high-demand regions within the Middle East and Africa, including Iraq, Saudi Arabia, Yemen, Syria and Egypt.

   “Quicklink Communications provides premium telecommunication services across these high-demand regions and will use Jabiru-1’s high powered Ka-band capacity to unlock Internet, voice and data services that are unavailable today,” Ballintine said after the deal was unveiled.

   Quicklink Communications CEO Nadir Shah said his company’s commitment to NewSat Ka-band capacity would enable it to continue growth and support emerging demand from neighboring regions. “We are excited to be a cornerstone customer of Jabiru-1 and our government and enterprise customers will benefit greatly from Jabiru-1’s high intensity coverage. The network expansions from mobile operators, enterprise networks for governments and corporations and the demand for Internet, are the growth markets throughout the Middle East and Africa and with the help of Jabiru-1, Quicklink Communications is set to capture them,” Shah said.

   U.S.-based global communications provider TrustComm also will take up Jabiru-1 Ka-band services under the terms of an agreement signed in August. TrustComm will purchase at least $105 million and up to $114 million of Ka-band transmission capacity on Jabiru-1. TrustComm’s commitment is for approximately $28 million in the first year after the satellite’s launch, with the remaining balance to be issued across the second and third years of Jabiru-1’s service life.

   TrustComm President and CEO Robert Kubbernus said his company would use the Jabiru-1 Ka-band satellite capacity to serve multiple high-demand regions within the Middle East, including Afghanistan, Iraq, Saudi Arabia, Yemen, Qatar and Pakistan. NewSat inked a similar agreement with 3A Technology worth $134 million that same month.

   In February, NewSat acquired seven orbital slots and a range of frequency assignments for accommodating satellites from AP Kypros Satellites. The acquisition agreement gave NewSat exclusive use of one of the slots and half of the frequencies of another two slots, with options for the other four slots. NewSat paid for the acquisition in five cash installments, with a sixth and final installment of ordinary shares paid several weeks ago.

   NewSat said the orbital slots, which cover all continents, are crucial for the company’s strategy on expanding into growth markets. The slots will be used to accommodate a fleet of Jabiru satellites, providing telecommunication services in C-, Ku- and Ka-band spectrum.

   “The slots are extremely valuable assets with senior filing status, outstanding geographic footprint and certainly enough capacity to see NewSat’s long-term future assured. We are now in a position to launch multiple satellites, each of which could generate in excess of $100 million of EBITDA per year,” Ballintine said. “NewSat has made significant progress on the Jabiru satellite project and has entered into a number of agreements to sell capacity, which will be announced soon, along with progress on funding for Jabiru-1 and plans for more satellites beyond Jabiru-2.”