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  • Sep 24, 2014
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THE INTERVIEW

Arianespace eyes the next frontier for major satellite launches

French satellite launch firm expects growth in broadcast and broadband services and switch to digital TV to create opportunities in the region

PUBLISHED : Saturday, 26 October, 2013, 2:55am
UPDATED : Saturday, 26 October, 2013, 2:55am

When Stephane Israel was named the new chairman and chief executive of Arianespace in April, his goal was to tap into more growth opportunities in the Asia-Pacific while further advancing the company's lead as the world's top satellite launch services provider.

"The Asia-Pacific is a key market for Arianespace, with more than a third of the company's global business generated in the region," Israel said.

Arianespace, founded in France in 1980, was the world's first commercial satellite launch company. It has accounted for more than half of the commercial satellite launches worldwide in the past 33 years.

The firm provides services to commercial satellite operators and government space agencies around the globe with a range of launchers: the Ariane 5 heavy-lift launch vehicle, the Soyuz medium-sized launcher and the Vega lightweight launcher.

Those rockets are launched from the Guiana Space Centre in French Guiana, an overseas region of France on the North Atlantic coast of South America.

The 21 shareholders of Arianespace include French space agency CNES, space technology company Astrium and various European space companies, which represent 10 countries across the continent.

We have 57 successful launches in a row – there is no comparison in the industry

According to the Satellite Industry Association, the global satellite launch industry grew 35 per cent last year to US$6.5 billion from 2011. The overall industry - comprising satellite services, manufacturing, launch and ground equipment - expanded 7 per cent to US$189.5 billion from the previous year.

Since opening its offices in Tokyo in 1986 and Singapore in 1996, Arianespace has become a major partner to satellite communications operators and manufacturers in the Asia-Pacific. The firm had launched 67 geostationary satellites for 12 operators in the region by last month, giving it a market share exceeding 70 per cent.

Asia Broadcast Satellite (ABS) from Hong Kong is a significant new customer for Arianespace, with the launch of its ABS 2 satellite planned early next year. One of the fastest-growing premium satellite operators in the world, ABS provides direct television broadcast, multimedia applications, telecommunications and data transmission services for the Asia-Pacific, Africa, the Middle East, Europe, Russia and the Commonwealth of Independent States.

Other Arianespace customers in the region include Chunghwa Telecom in Taiwan, Singapore Telecom, Korea Telecom, Optus in Australia, the Indian Space Research Organisation (ISRO), Vietnam Posts and Telecommunications, the Japan Aerospace Exploration Agency and NTT DoCoMo.

Israel said Arianespace had launched two telecommunications satellites for ISRO this year using the Ariane 5 launcher, and an Earth observation satellite for Vietnam using the Vega light launcher.

By last month, Arianespace had 13 bookings worldwide this year, valued at €1.16 billion (HK$12.4 billion) and representing a 62 per cent global market share. Its order book backlog is at a record €4.14 billion, which it says will ensure more than three years of launch activities.

"This unmatched commercial performance is further enhanced by Arianespace's capability to be reactive when the customers' satellites are ready and our ability to launch them on time, which we have demonstrated mission after mission at the spaceport in French Guiana," Israel said.

But his optimism over Arianespace's prospects may be tempered by challenges ahead. US entrepreneur Elon Musk, a co-founder of global online payments giant PayPal, has been aggressively positioning his own space transport company, SpaceX, as a viable challenger to the French industry leader.

In an interview, Israel shared Arianespace's view from its lofty perch in the satellite industry.
 

What is fuelling demand for satellite launches in the Asia-Pacific?

Despite economic uncertainty, the trend is very positive in this region because of the growth in broadcast and broadband services. The revenue increase in the pay-television market, for example, is set to reach US$12 billion from 2012 to 2018. That means the total market in the Asia-Pacific will be about US$44 billion in 2018.

More consumers are also moving from analogue to digital TV services because the region is home to the world's most important TV manufacturers, which are developing innovative products in ultra-high definition. This will have a big impact on the satellite launch market because there will be more and more demand for satellite capacity. The more precise the definition [of the TV screen], the more capacity broadcast providers will need in orbit.

There are also many innovative telecommunications network operators, such as those in Australia, which have created solutions that resulted in increased demand for broadband services.

We are going to launch at least seven satellites from this region in the next two years. We see many opportunities in the coming years, which is why it is important for us to be close to our customers in the Asia-Pacific and understand what they want. We need to know their expectations.
 

How does Arianespace see China in this industry?

Today, China is neither a customer nor a competitor. All satellites for China are launched in orbit by its own launchers. Due to US legislation that bars American components from being used on Chinese rocket launches, China is a bit apart in this industry in terms of competition.
 

Could SpaceX be a strong rival in the next few years?

We never underestimate our competitors. SpaceX has won some contracts, so we must take it seriously and be more innovative. But in terms of track record - we have 57 successful launches in a row - there is absolutely no comparison in the industry.
 

Has Arianespace considered becoming part of the emerging space tourism industry?

No, space tourism is not something we are considering. The best tourists in space for us are satellites. These are longer-term tourists. When they are up in orbit, they stay there for more than 10 years.

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