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Satellite operators to proceed with launches from Russia

Posted: May 12, 2014

Satellite industry executives say U.S. government sanctions restricting the export of defense articles to Russia, a broad category which includes satellite components, are unlikely to disrupt near-term plans to launch spacecraft on Russian rockets.

File photo of an April 28 Proton rocket launch from Kazakhstan carrying Russian and Kazakh communications satellites. Credit: Roscosmos
But there looms a threat that the U.S. State Department could revoke export licenses for satellites to Russia that contain parts from the United States. In the globalized space industry, that includes almost all commercial satellites.

Giants in the communications satellite business, such as Inmarsat, SES, Intelsat and Iridium, would be hurt if the sanctions bit into their plans to launch satellites on Russia's Proton rocket and the Dnepr booster, a converted Soviet-era SS-18 ballistic missile built in Ukraine and launched from Russian soil.

Worries over the sanctions' impacts began in March when the White House announced travel restrictions and asset freezes against top Russian government officials deemed to be linked to Russia's annexation of Crimea.

On April 28, the State and Commerce departments ratcheted up the sanctions, announcing the government "will deny pending applications for export or re-export of any high technology defense articles or services regulated under the U.S. Munitions List to Russia or occupied Crimea that contribute to Russia's military capabilities."

The State and Commerce departments said they were also acting to revoke any existing export licenses that meet those conditions.

The U.S. Munitions List includes items on satellites, launch vehicles and other space hardware.

"All other pending applications and existing licenses will receive a case-by-case evaluation to determine their contribution to Russia's military capabilities," the State and Commerce departments said in a statement.

Rupert Pearce, CEO of London-based Inmarsat, said May 7 he has "high confidence" that the second and third communications satellites for the company's $1.6 billion Global Xpress mobile broadband service will launch by the end of 2014.

The first Global Xpress satellite, Inmarsat 5 F1, launched in December 2013. The launches of all three spacecraft are contracted to International Launch Services, the U.S.-based company which markets Russia's Proton rocket to commercial satellite operators.

The Inmarsat satellites are built by Boeing Satellite Systems International Inc. in California.

"We do not believe the current trade restrictions with Russia arising from the Ukraine situation will have any impact on our launch plans," Pearce said in a May 7 conference call. "This belief is supported by independent advice, and from confirmations we've been given."

The Inmarsat 5 F1 and Inmarsat 5 F2 communications satellites inside Boeing's factory in El Segundo, Calif. Credit: Boeing
Pearce said the Inmarsat 5 F2 satellite, next in line in the Global Xpress launch schedule, was on the verge of shipping from Boeing's factory in El Segundo, Calif., to the Baikonur Cosmodrome to begin launch preparations "in the next few weeks if not the next few days."

"While it is not impossible that a heightening of tensions could lead to further trade restrictions, which might affect our plans, we continue to believe there are good reasons why further restrictions would not target the use of Proton launch vehicles from Kazakhstan," Pearce said.

One of the main customers of Inmarsat's Global Xpress service will be the U.S. military.

ILS did not respond to an inquiry on the effects of the sanctions on commercial Proton launches.

Later this year, Luxembourg-based SES expects to launch the ASTRA 2G television broadcasting satellite on another International Launch Services Proton mission.

On May 9, the company's chief executive told financial analysts that the launch was on track for the third quarter of this year -- between July 1 and Oct. 1.

"What I can say is the recent sanctions have no bearing on the launch date," said Karim Michel Sabbagh, CEO of SES, the world's second-largest traditional communications satellite operator. "In fact, Astrium [Airbus Defence & Space], who is the manufacturer of ASTRA 2G, has received all proper licenses to ship the satellite to Baikonur in Kazakhstan. Now it's a matter of following the launch schedule with the designated launcher, in this case the Proton."

Turkey's Turksat 4B satellite, built in Japan by Mitsubishi Electric Co., is also on the Proton's launch manifest this year. Turksat has not commented on whether the Russian sanctions might affect their launch.

The first satellite to be removed from a scheduled Russian rocket launch was Canada's Maritime Monitoring and Messaging Microsatellite, or M3M, which carries a ship-tracking payload and a low data rate communications package to relay data from isolated Earth-based transmitters.

Com Dev, the Ontario-based manufacturer of the M3M microsatellite under contract with the Canadian Space Agency and Public Works Government Services Canada, announced April 24 that the Canadian government decided to pull the spacecraft from its scheduled launch in June on a Soyuz rocket from the Baikonur Cosmodrome in Kazakhstan.

Artist's concept of the M3M microsatellite. Credit: Canadian Space Agency
M3M was supposed to launch with a cluster of international payloads piggybacking on the Soyuz booster with a Russian Meteor M weather satellite. The launch contract was arranged with Glavkosmos, a Russian company charged with the commercialization of Russia's space industry, according to Gary Calhoun, Com Dev's chief financial officer.

A pair of satellites funded by the British government slated to launch on the same Soyuz rocket have not been removed from the flight, according to UK officials.

Com Dev said the Canadian Space Agency will assist the company in securing another launch contract.

"Recognizing the current events in the Ukraine, we had been engaged in discussions with the government of Canada with respect to a potential delay of the launch of M3M, and plans to mitigate the impact of any delay," said Mike Pley, CEO of Com Dev International, in a statement. "We are confident that the mitigations will be in place prior to the originally planned M3M in-service date of September 2014."

Two more power players in the satellite communications industry have launches scheduled from Russia and Kazakhstan next year.

Matthew Desch, head of the Iridium mobile communications company, said Iridium has assigned its first two second-generation Iridium NEXT satellites for launch from Russia in June 2015 on a Ukrainian Dnepr rocket.

"We have indications that there is not a broad-based export ban," Desch said. "In fact ... satellites being shipped to Russia to launch from a Russian launch pad is really not an export to Russia, but really just an export through Russia into space."

Iridium has the rest of its 72-satellite Iridium NEXT constellation booked for launch on SpaceX Falcon 9 rockets. The two spacecraft launched by the Dnepr rocket will serve as pathfinders before transitioning into the operational fleet once SpaceX can launch the remaining platforms.

"Any kind of export bans, at least [those we can] envision at this time, are quite limited to very specific equipment that would be used for very specific applications, which we don't think apply to the Iridium base. So we see business as usual right now for the Dnepr platform and our first launch," Desch said.

Artist's concept of the ASTRA 2G communications satellite. Credit: Airbus Defence & Space
The world's largest telecom satellite operator, Intelsat, has most of its upcoming satellites contracted to launch with Arianespace aboard Ariane 5 rockets.

But Intelsat has signed a deal to launch the Intelsat 31 satellite, part of a two-spacecraft system to broadcast television to Latin America for DirecTV, on an ILS Proton rocket in 2015.

"We did a lot of good work with ILS and Space Systems/Loral [builder of Intelsat 31] to get our licenses and order early on," said Dave McGlade, CEO of Intelsat. "That being said, we can't guarantee that they won't be revoked at a future time."

McGlade said Intelsat is somewhat cushioned if the sanctions thwart the Proton launch plans because Intelsat 31 is a backup satellite.

"We're not aware that satellite launches or satellites in general are under the sanctions that the U.S. is considering or have already been implemented," McGlade said.

Follow Stephen Clark on Twitter: @StephenClark1.