Sat, Feb 24, 2007 - Page 5 News List

Arianespace hopes to beef up its US satellite business

BLASTING OFF Europe's space launching business hopes that demand for satellite TV and advanced mobile phones will boost demand for its services


Europe's satellite launch group Arianespace hopes to boost its US business on rising demand for high-definition television, but said on Thursday it remains locked out of lucrative US government contracts.

Jean-Yves Le Gall, Arianespace's director general, said in an interview that the company had ambitions to muscle into the commercial US market for satellite launch services during the next two or three years.

"There's the potential for very strong demand here that will be driven by demand for high-definition television," Le Gall said in French on the sidelines of Satellite 2007, an annual industry gathering held in Washington.

High demand

If demand for high-definition TV blasts off in the US, as satellite TV broadcasters like EchoStar and DirectTV hope, Le Gall says it would trigger increased demand for new satellites that Arianespace would compete aggressively to deliver.

The Arianespace executive is also pinning high hopes on the next generation of cell phones, including Apple's bid to roll out the iPhone, which may eventually offer Internet services as well as television shows to consumers.

He said Arianespace, which has 23 shareholders including the French space agency CNES and the European Aeronautic Defense and Space Co, is targeting the US, Europe and Asia as key markets for future satellite launches.

Arianespace expects to post revenues for last year close to US$1.3 billion, Le Gall said.

He explained that new applications and the capital to finance new projects are two reasons why growth is likely to expand in the US market.

Stiff competition

However, Arianespace is likely to encounter stiff competition in the US from rival International Launch Services (ILS), which uses the Russian Proton launch vehicle.

ILS, a US-Russian group, has several years of experience under its belt, although the giant defense contractor Lockheed Martin dropped out of a partnership with the company last year, taking its Atlas rocket out of the venture.

Arianespace's optimism does not appear to have been eclipsed by the fact that it cannot compete in the US government market for satellite launches due to the "Buy American Act" which restricts foreign involvement in US government satellite launches.

"We are totally out of this market," Le Gall said.

Military satellite launches represent a substantial share of demand for satellite launches and that market is dominated by Lockheed Martin and Boeing, which operate the Atlas and Delta series of launch rockets respectively.

"The Department of Defense pays very dearly for government launches," Le Gall said.

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