Israel’s Amos-5 high-capacity satellite to be built in Krasnoyarsk Region

7 Aug '08
Israel’s Space-Communication, Ltd. (Spacecom) has placed a $157m order with Krasnoyarsk Region’s Reshetnev Information Satellite Systems for the manufacture of a communications satellite. Commissioning is expected in March 2011. If this project proves successful, the company may receive more international orders.

Israel’s Space-Communication, Ltd. (Spacecom) will pay $157m to Zheleznogorsk-based satellite communication system integrator Reshetnev Information Satellite Systems (ISS) in Krasnoyarsk Region for the manufacture of the Amos-5 communications satellite. Works are to be completed by March 31, 2011. The satellite is to operate in orbit for at least 15 straight years.

Sources in the Krasnoyarsk regional administration report that ISS will start working on the project in August 2008. $30m in advance payment is to be wired by Spacecom this month already. Under the contract terms, Spacecom is entitled to terminate the contract at any stage of the project implementation, even after the satellite is launched and then suddenly “lost.” ISS also has the right to terminate the contract in case of arrears.

At present there are three Spacecom’s satellites in orbit: Amos-1 (launched in 1996 to be phased out this year), Amos-2 (launched in 2003 to operate until 2016) and higher-capacity Amos-3 that was launched from the Baikonur spaceport in late April 2008 to replace obsolete Amos-1.

The Amos-5 project is Spacecom’s first to be carried out by a foreign company. All prior satellites were produced by Israel Aerospace Industries. Last summer Spacecom signed with it another contract worth $365m for the manufacture of the Amos-4 satellite, Spacecom’s corporate site reports. The launch of Amos-4 is scheduled for 2012. It is expected to stay in orbit for 12 years.

Saving costs or recognizing Russia’s know-how?

The cost difference between the Amos-4 and Amos-5 projects deserves special attention. Spacecom will pay the Amos-4 manufacturer twice the price of Amos-5, despite the fact that Amos-5 to be built in Russia represents a more advanced generation of satellites. Complete with unequal terms of the two contracts, this has given rise to speculations among experts.

Kommersant cites several analysts who think Spacecom has chosen ISS only to cut corners. Andrey Romulov, communications department director at the Iskra design bureau (satellite communications systems) in Krasnoyarsk region echoes this view, “Similar satellites manufactured in the West cost between $200m and $300m. For Hughes satellites, for example, a customer may shell out up to $500m. But on the flip side of it, our satellites designed for 15-year operation might break down after three years. I thought demand for domestically made satellites would soon fizzle out even in Russia.”

Contrasting to this point of view is an opinion from Vitaly Shchetinin, advisor to the CEO at Polyet, a space industry company owned by the Khrunichev sci-tech center that participated in the SAR-Lupe project (launch of five satellites for Germany’s Defense Ministry). Shchetinin believes the contract heralds ISS’ breakthrough in the global market. “Spacecom had a lot to choose from as regards potential contractors. For ISS it means recognition in the international market known for its fierce competition”, he says.

No matter how diverse opinions may be, what matters is that the successful completion of this contract will open the gates for new large-scale international contracts for ISS.

In foreseeable future Spacecom will need more satellites as it plans to operate a group of five or six satellites in different orbits. This will make the company a frontrunner in satellite communications in Europe and the Middle East and help it expand its presence in the Asian and African market, and in the transatlantic communications segment.

For reference:

Space-Communication, Ltd. (Spacecom)
is an Israeli telecommunication operator providing services through the use of its proprietary Amos-branded satellites. The company was founded in 1993 to launch the first satellite in the Amos-series manufactured by state-run company Israel Aerospace Industries, Ltd. (IAI). Today largest shareholders, apart from IAI, include such private companies as Eurocom Holdings, Ltd., Mer Service Group and General Satellite Services Company. Spacecom’s shares are available at the Tel-Aviv Stock Exchange.

ISS is one of the leading Russian space industries owned by the state. ISS designs and produces communications, TV broadcasting, navigation and geodesy satellites. The company was set up in 2008 on the premises of a state corporation and now employs over 5,700 people.
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