[Satellite News 08-10-11] Australian satellite company NewSat signed a three-year Jabiru-1 satellite capacity contract with U.S.-based global communications provider TrustComm, NewSat announced Aug. 10.

            Under the terms of the agreement, 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.

In a statement, 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.

            “[Jabiru-1’s] Ka-band capacity will help TrustComm expand and strengthen its global capabilities. NewSat is constructing one of the most sophisticated and flexible communications satellites in an area with a scarcity of supply. We believe that our customers will value highly the flexibility of the Jabiru-1 payload,” Kubbernus said.

            Jabiru-1 is NewSat’s first geostationary communications satellite, which aims to provide high-powered satellite capacity to high-value customers in the military, defense and government markets as well as other enterprise segments such as resources. NewSat already serves many of these customers from its teleport facilities.

NewSat CEO Adrian Ballintine told Satellite News that the vertical integration of owning a satellite should dramatically increase NewSat’s ability to secure large capacity contracts and significantly increase EBITDA margins.

“NewSat has rights to seven premium orbital slots, which provides a significant growth opportunity above and beyond Jabiru-1,” said Ballintine. “TrustComm’s commitment to take capacity on Jabiru-1 is a significant milestone for NewSat and will underpin the debt financing of the satellite. It is tangible evidence of the step-change taking place in the NewSat business model as we move from being a reseller of satellite capacity to the owner of satellites.”

            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 will pay for the acquisition in five cash installments, with a sixth and final installment of ordinary shares due Dec. 1.

    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.”