[Satellite News 04-26-11] Intelsat’s New Dawn satellite, launch by Arianespace on April 22, begins the operator’s largest satellite investment program in its history. Through its new satellite, Intelsat aims to provide C- and Ku-band services specifically tailored to supply a critical communications infrastructure for Africa — a region that remains financially out of reach for terrestrial providers due to its expansive geography.
    New Dawn was built by Orbital Sciences as part of Intelsat’s $250 million joint venture formed in December 2008 with a consortium led by Convergence Partners. The satellite will be stationed at the 32.8 degrees East orbital slot and will be integrated with Intelsat’s global satellite fleet, creating a potential backlog of more than $700 million for the operator. New Dawn also is just the first of eight satellites scheduled for launch in the next two years.
    Intelsat CEO David McGlade told Satellite News that the program’s unique financing structure made the concept of creating the first African private sector communications satellite service a reality. “The way we brought in a local partner like this while using South African banks is an absolute first,” he said. “Convergence Partners is a good partner and we have been talking to them and planning this deal for two years. They have a lot of connections in the marketplace. I think it’s always a good thing to support the local economy. With demand increasing and a constraint in supply, Intelsat New Dawn was the right thing to do. The 33 degrees East position is a great orbital slot. It is a good look angle, has good power and allows us to have great flexibility with its customers.
Throughout its design process, New Dawn’s payload was developed to deliver new capacity for wireless backhaul, broadband and broadcast delivery “The satellite will not only deliver crucial services specifically tailored for Africa, it will also herald the dawn of a new era where Africans enjoy far greater involvement in the space communications industry,” Convergence Partners Chairman Andile Ngcaba said in a statement.
    Intelsat hopes the program will boost its position in Africa, where a growing presence of fiber has impacted its short-term revenues. In November, McGlade said that while the New Dawn program gives satellite an edge, fiber competitors would remain competitive in the long-term. “The mix will continue to have third party capacity with a lower margin. We still see long-term growth in Africa, but we have seen some short-term impact by the increase of fiber and expect that trend to continue.”
    One of those competitors is Sea Submarine Communication (Seacom), which has planned to fight satellite companies for valuable emerging African market connectivity contracts since its submarine cable service was launched in July 2009. While Seacom claims that it is lowering prices in the markets it serves by 30 percent, the company, which is also co-funded by Convergence Partners, has not provided specific figures.
    Intelsat, however, has brought on a slew of new capacity contracts during the past two years. Just hours prior to New Dawn’s originally scheduled launch in March, SkyeVine, a joint venture company between Ellies Holdings Ltd. and Q-Kon, leased capacity on New Dawn that will be used to deliver broadband Internet services to SkyeVine’s small businesses, domestic and public service customers. SkyeVine also said it would provide ISPs with a complementary product line that combines Q-Kon’s engineering and operations capability with Ellies’ retail and distribution network so that it can expand its reach to all potential users.
The operator also signed a one-year contract to provide 36 MHz of transponder services to the U.S. Department of Defense, with options for four additional one-year contracts. Financial details of the two contracts were not disclosed.
    McGlade said the need for a new satellite to serve Africa was driven by economically viable approach to its business model. “We saw pricing go down in Africa for years — to a level that was not sustainable for our business. At the same time, we had inflation in launch vehicle and satellite costs. Costs went up, transponder service price went down. That was not a good model for the future. Intelsat New Dawn is fair pricing from our standpoint and it was something that customers were clearly willing to sign-up for, some for up to 15 years.