Tim Furniss/LONDON
calls for the rationalisation and integration of European aerospace companies to allow it to face up to international competition are being reflected to a degree in the continent's space industry, but it is still competing with itself.
The rationalisation of the European space business began with the simple realisation that too many small space companies were operating, none of which alone could compete realistically for major contracts against the larger, more space-experienced, US companies.
The merger of Matra with the UK's Marconi Space Systems in 1990 was the first major sign of this new climate. What became Matra Marconi Space (MMS) then merged with British Aerospace Space Systems in 1994, becoming the first truly international space company. From 1994 to 1996, annual sales increased from about $960 million to $1.6 billion.
Aerospatiale, the other European space giant, had proposed a similar link. Like BAe, Marconi and Matra, which had worked together on satellite projects previously, Aerospatiale had a teaming agreement for Spacebus satellite manufacturing with Deutsche Aerospace (Dasa) and proposed a formal merger with Dasa's Dornier space division, before it became part of Daimler-Benz Aerospace.
NEW FORCE
The talks collapsed, however, and Dasa Dornier is discussing final details with MMS for the formation of a pan-European satellite-manufacturing force with a $2.6 billion annual turnover. Possibly to be called New Co, it will be the third-largest space company in the world.
Aerospatiale has always had strong space links with Alcatel Espace, which has itself started to play a prime space role. The recent privatisation of Thomson-CSF, linked with Alcatel and Dassault, has placed Aerospatiale in a position to be part of a proposed French-led European satellite giant able to compete internationally.
The question being asked is: "Will there be room for two major European space manufacturing entities, or is it better to have two successful players to maintain sharp competitiveness?" The initiation of the French/German/UK Trimilsatcom project, with tenders issued to competing MMS and Alcatel/Aerospatiale-led consortia does not reflect calls for full integration.
Further rationalisation is also unlikely because of a relatively new trend in the industry, which now seems rather obvious and which is the result of a maturity in the communications-satellite industry. Satellite manufacturers are proposing to operate their own satellite systems, or to invest in systems proposed by other organisations, to gain a major share in hardware manufacturing. The satellite itself is not the only product to be sold, therefore - it is also the services.
This business expansion, from providing spacecraft to providing space services, was pioneered, not surprisingly, in the USA. GE Astro (later to become Lockheed Martin via a Martin Marietta take-over) operated a Satcom fleet of commercial-communications satellites, and Hughes has a similar service. Aerospatiale and the former Deutsche Aerospace linked to invest in the Argentine Nahuel satellite-communications service.
As communications applications widen, so these and other companies are racing to take part in the "Internet in the sky" explosions in high data-rate digital Ka-band communications and other specialised regional satellite applications. In November 1997, the World Radiocommunication Conference agreed to allocate frequencies to the Celestri, Skybridge and Teledesic multi-satellite multi-media systems. The $9 billion, 88-satellite Teledesic system planned by Microsoft's Bill Gates and entrepreneur Craig McCaw includes Boeing as a major investor - and presumably the spacecraft builder and launcher.
SKYBRIDGE PROGRAMME
The Skybridge is a $3.5 billion programme led by Alcatel, in which Aerospatiale has invested and will build the 641,000kg low-Earth-orbit (LEO) satellites, based on its Proteus platform. Other investors are Mitsubishi and Toshiba of Japan, Loral Space and Communications of the USA and Canada's Spar Aerospace, along with a Belgian bank.
US company Motorola's Celestri system will involve 71 LEO satellites, which will be built by MMS as a result of its investment, resulting in a contract worth potentially $1 billion (flight International, 12-18 November, 1997).
MMS has also created the Euro African Satellite Telecommunication (EAST) company with the Cyprus Telecommunications Authority and Norway's Nera company, to provide Africa, Europe and the Middle East with mobile telephony and data services using an $800 million one-satellite system, based on a Ku-band and L-band Eurostar 3000 bus.
MMS has also been lining up potential investors for another venture, the Wide Band European Satellite Telecommunications (WEST) system, to provide multi-media services to home, business and professional users. One geostationary and nine medium-Earth-orbit Ka-band satellites will be deployed progressively, providing wideband-on-demand services. MMS' investment in the Celestri system may put the WEST on the backburner.
If these space companies are successful in the creation of new satellite systems, further integration could be made more difficult, but the effect on teaming agreements may not be so serious and may be an unofficial way to integrate, particularly if it results in the creation of one new European communications-satellite platform instead of two - the MMS Eurostar and the Aerospatiale/Dasa Spacebus. A choice of two buses from two competing companies may be considered wasteful.
Source: Flight International
