[Satellite News 06-30-10] Arianespace CEO Jean-Yves Le Gall hopes that the successful launch earlier this week of the Arabsat-5A satellite, as well as South Korea’s COMS (Communication, Ocean and Meteorological satellite), will provide opportunities for growing its business in Asia and the Middle East.
    After dealing with technical delays, the launch comes as a relief to Arianespace, as it looks to build on a strong booking year with regional customers.
In the following interview with Satellite News, Le Gall discusses Arianespace’s business model for the Asian market after the CommunicAsia trade show in Singapore highlighted the strength and appetite of the region, as well as the health of the launch services sector and what customers can expect in the future.

Le Gall: We have been very successful in Asia. In our order book, we have a good number of launches for Asian customers. In fact, this year, we are going to launch three satellites coming from Asia. We have launched the COMS satellite for the Korea Aerospace Resarch Institute (KARI). In early September, we will launch BSAT 3B, and in the near future, BSAT 3C, for Japan. We will also launch Koreasat-6 for Korea Telecom. Next year, we will launch ST2 for SingTel, (this satellite will be operated as part of a joint venture with a Taiwanese company). We will launch ABS-2 for Asia Broadcast Satellite and another satellite for Japan, as well as Insat-4G for India. Arianespace enjoys a robust market share in a region that remains a fertile territory for new business. Malaysia, Indonesia, Thailand, India and Korea are in the midst of developing new satellite programs that could very well involve Ariane launches. Asia, like Europe, provides us with the opportunity to serve many customers.

Le Gall: Asia lacks a classical telecomunications infrastructure in many areas. Thus, satellites are essential to developing communications infrastructure. Satellites in countries such as Vietnam allow that country to leap ahead, and skip stages in development. When we launched VinaSat-1, the satellite wasn’t projected to see its capacity booked solid before five years, but VNPT ended up selling all the capacity in two years. Due to massive demand, the satellite is now full. You also have people in Vietnam who want access to communications more than TV, so satellite is a key element in that.
We are also seeing huge demand for TV services across Asia, with HD and even 3-D TV set to make an impact. 3-D TV is the final frontier in terms of television. I was watching the French Open tennis in 3-D, and it was very impressive. One HD channel replaces 16 SD channels, and one 3-D TV channel replaces 64 SD channels. It is a lot of information that requires a lot of capacity and transponders.
 

Le Gall: China is now out of the market due to ITAR and other political reasons. In India, there was a recent launch failure. So they have to resume development. Sea Launch’s fate remains uncertain. Mitsubishi is also striving to play a larger role in the market with the H-2A, but this will take time. Right now the marketplace in Asia consists of two main players, Arianespace and ILS, who have enough capacity to meet everyone’s needs.

Le Gall: I don’t think so. Since the beginning of the year, we have signed ten new contracts plus five Soyuz launches for the launch of Galileo constellation. Last year, we signed a total of eleven contracts. So, we have already signed nine contracts this year, and have a number of contracts still in the works. I think by the end of the year, we will have signed between 12-14 contracts. And the demand will continue. You look at Eutelsat; they have just ordered three satellites. We have heard that SES is looking to buy multiple satellites again. They bought four satellites last year. Inmarsat is looking for more satellites.

(Editor’s Note: Since this interview was conducted, Arianespace announced it has won a contract with Argentine satellite operator Arsat to launch the Arsat-1 satellite.)
 

Le Gall: Our customers had mixed emotions here. Obviously, they are not satisfied that there is a delay. On the other side, they appreciated our transparency, the clarity of our explanations, and the fact we had a security process in place that detected a quality problem before the launch. So, we have been able to fix it. We successfully launched both satellites at the end of May. In the meantime, we have begun a quality audit. The final report will be available at the beginning of July to all of our customers. While our customers told us they were not satisfied with the delay, they did say they were satisfied with our thorough response to that delay.

Le Gall: As I have always said, they are impressive. I have already congratulated Elon Musk on his first launch. In the past their image suffered due to delays and problems with the initial launches of the Falcon 1. They are past this point today. Even though they had a good test flight, they still have a lot to accomplish before the are fully operational. We expect to compete vigourously with them in the commercial market over time. 

Le Gall: The first question is what will be the decision of Sea Launch. But whatever the decision, from what I understand they have logistical constraints with their platform which limits their ability to do too many launches per year. I think their new business model is set at four launches a year. So, there is still a question mark over their future. With SpaceX, they can be very successful, but not immediately. But, in 2-3 years, if they continue to develop, they can be successful. I think it will be good for the industry, and in particular, good for the United States. You have the Department of Defense which has the Delta 4 and the Atlas 5. The EELVs are reliable but that quality has a cost. SpaceX appears to be a lot more cost-efficient because of its systems design, manufacturing and liquid oxygen make-up. In my opinion, they are using the right kind of model.

Le Gall: For the next ten years, we will have the Ariane 5 ECA, the Soyuz and Vega. We expect to start using the Soyuz early next year. We will have the capability to have four Soyuz launches a year. Today, we have 17 launches planned on the Soyuz. We have 18 launches planned on the Ariane 5, a total of 36 satellites in our backlog.