Optus, the Australian telco owned by Singapore Telecom, already has 25 percent of the capacity sold on its D3 satellite. Optus announced April 3 it will invest in a new D3 satellite to meet the growing demand for capacity in Australia and New Zealand.

The satellite will have a total of 24 transponders, and satellite pay-TV operator, Foxtel already has contracted to lease six, even though the satellite is not due to be launched until 2009 on a Soyuz launcher from Europe’s space port in French Guiana. Arianespace launched the Optus D1 satellite in October 2006, and will also launch the Optus D2 satellite later this year.

The investment in the D3 satellite is a surprise given that the operator had only planned to have two satellites in the D-series. "The demand from the market exceeded our earlier forecasts," said Paul Sheridan, head of Optus Satellite. "So the new satellite has been driven by strong customer demand."

With key drivers for capacity such as high-definition TV (HDTV), Sheridan believes Optus now is in a strong position to meet added demand in Australia and New Zealand. "The third satellite provides additional capacity for us to meet the demands of our customers," he said. "It will actually increase our capacity by more than 30 percent across our fleet. The new satellite will be a broadcast services satellite, still in Ku-band. We are going to co-locate it with our existing C1 satellite at 156 degrees East."

Foxtel

Foxtel likely is to be the main client for Optus, and their deal puts the operator in a strong position to be a key innovator in terms of HDTV. Foxtel has well in excess of a million digital customers in Australia.

"Foxtel have indicated they are looking to increase the quantity of services and the need to have additional capacity," Sheridan said. "It gives us an opportunity to provide some in-orbit redundancy, which is of course important to subscription service providers. So if you add that single orbit location with the two satellites operating – and it is Foxtel’s intention to migrate some of their existing services from the C1 satellite and put them on the D3 satellite giving them an in-orbit redundancy – it means they will also take additional capacity of six transponders. They also have a couple of options on top of that across the life of the D3 satellite."

The D3 satellite is being manufactured by Dulles, Va.-based Orbital Sciences.

"The decision to go with Orbital was incremental," said Sheridan. "… They were already building the D1 and D2 satellites, so an additional satellite from the same vendor from that perspective makes sense. Smaller satellites enable us to meet the needs of the chosen markets which we operate in, namely Australia and New Zealand."

Ali Atia, president of Orbital Communications International, part of the Space Systems Group within Orbital Sciences, was delighted to secure one of its premier customers to another deal.

"The D3 satellite is pretty similar to the D2 satellite," said Atia. "It uses the same bus, so it has the same power level, etc. There are slight differences in frequency plans. The D3 satellite has more transponders than D2, but the basic bus is the same."

For Orbital, Asia is one of its most important markets. "We have done deals in Japan, Indonesia, Australia [and] Malaysia," Atia said. "Over the past 10 years, Asian opportunities [have represented] around 30 percent of commercial communications satellite revenues for Orbital."

Atia also hoped the operator could sign further deals in Indonesia and Japan this year. "We are competing on one opportunity in Indonesia with Indosat, as well as another one with PT Telkom, the incumbent telco," he said. "We don’t know whether we have been successful yet with either of these. We are also hoping we can secure a contract with JSAT, as they will be procuring satellites later this year. Other Asian opportunities in the longer run exist in Thailand, Korea and possibly the Philippines."

Busy Time For Satellites

Optus is set for a busy year in the satellite arena. The company plans to launch the D2 satellite before the end of 2007 to replace the C3 satellite; services from that will be moved over to D2.

"We have two launches in the next 24 months," Sheridan said. "The first one is later this year. There is obviously increased demand from our current customers. We have a number of exciting announcements coming up in the next couple of months relating to new services, new customers and also the continuation of services for existing customers. This continues to cement our position as the satellite provider of choice in our chosen markets."

Australia has a unique geography, with many people based in remote or rural locations. Optus uses satellites as a way of extending its reach,

"Satellites are a key differentiator" for the operator, Sheridan said. "We are the only Australian-based telco who owns and operates its own satellite fleet. I believe satellites will continue to play an important role for us. Satellite gives us that unique capability to provide and offer services to areas that are not, and will not be, addressed by terrestrial rollouts. That is one of the keys to the plan going forward. We have a 20-year history in providing leased satellite services, and D3 will be our 10th satellite. Satellite for Optus will continue to be important, and this additional investment in the third satellite reflects that. We have a very young fleet. The C1 satellite was only launched in 2003, and we have a very long-term life for our fleet, out past year 2020."

The question is whether the demand for satellite capacity is so strong that a fourth D-series might be needed.

"There will be no fourth satellite as part of the D-series," Sheridan said. "The third satellite increases our capacity across the fleet by more than 30 percent. With our forecasts, we believe that is adequate to address the needs of customers and give us some additional growth opportunities if the market continues to move. The capacity we have onboard will enable us to address anything that comes up in the foreseeable future. The additional investment in the D3 satellite has increased Optus’ investment in the D-series program to over $600 million Australian ($488.4 million)."

–Mark Holmes