Hughes Space and Communications International Inc. [GMH] has signed a contract to build a geostationary mobile satellite system based in the United Arab Emirates. Hughes was selected late last month as the preferred bidder for the Thuraya system by Thuraya Satellite Telecommunications Co. of Abu Dhabi (SN, Sept. 1, pp. 1-3).

Lockheed Martin Corp. [LMT] and France’s Aerospatiale SA also competed for the contract, under which Hughes will build at least two spacecraft.

The Thuraya system will use a high-powered "super GEO" satellite to provide mobile and fixed satellite telephone service to users in the Middle East, North Africa, Eastern Europe and the Indian subcontinent. The coverage area contains a population of some 1.8 billion people, Thuraya said.

The system, valued at approximately $1 billion, will be the largest satcom project in the region, according to a Thuraya statement. Hughes will supply a "turnkey" system that includes the spacecraft, ground facilities and handsets.

Delivery of the first satellite is scheduled for early 2000; service is scheduled to begin later that year. The satellite will have a 12.25-meter aperture reflector (see photo, right).

The second satellite, to be delivered later, will be a ground spare. The contract also includes an option for a third satellite.

Hughes will have the option to buy as much as 5 percent of Thuraya and currently has a 2 percent share, officials said.

Both Hughes and U.S. government sources said the 5 percent stake owned by the General Post & Telecommunications Co. of Libya will not be an obstacle despite the U.S.’s sour view of Libya’s authoritarian regime.