NATO’s Signing of Satellite Service Deal May Wait

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The 26-nation NATO alliance is unlikely to sign its planned contract for satellite capacity with Britain, France and Italy before October, just two months before the contract for long-term satellite services is scheduled to take effect, according to a NATO official involved with the negotiations.

The official, speaking on background in keeping with NATO policy, said the 15-year agreement that was announced in May has not encountered roadblocks. However, dealing with three separate nations, with all documentation in three languages, takes time.

Britain, France and Italy will be providing capacity to NATO on their planned or existing Skynet, Syracuse and Sicral satellites, respectively, in the SHF and UHF frequency bands. NATO will be signing the contract with these three governments despite the fact that all three are likely to follow the British government’s lead in privatizing their military satellite-communications services. “We are signing a service-provision contract with governments,” the NATO official said. “If governments decide to contract the work to someone else, that is their business. Our point of contact with the service providers will be a single joint program management office, whose job it will be to allocate capacity” among the three satellite systems.

Britain has outsourced its satellite communications service-provision business to an EADS Astrium subsidiary, Paradigm Secure Communications, under a 15-year contract. Aided by the pending mergers of their two principal satellite companies, Alcatel Space of Paris and Rome-based Finmeccanica’s Alenia Spazio and Telespazio, the French and Italian governments are reviewing a similar arrangement.

Francois Lureau, head of France’s arms-procurement agency, DGA, said June 29 that France is leaning that way for satellite communications for its Syracuse 3 satellites.

The first Syracuse 3 is scheduled for launch in early 2005. Lureau said that what the British refer to as a Private Finance Initiative has the advantage for governments of smoothing out their annual budget outlays and avoiding the large capital expenditures that come with owning satellites.

Malcolm Peto, managing director of Paradigm Secure Communications, said Paradigm expects to sign satellite service contracts with two other European governments soon after the NATO contract is completed. He declined to name them.

Paradigm has been providing satellite telecommunications services to the British Defence Ministry under separate contracts for two years. Peto said the company, through its 40 satellite-access cabins located with British deployed troops and more than 1,000 Iridium and Globalstar satellite telephone handsets, handled more than 23 million minutes of traffic for British forces in 2003.

“We are the largest user of Iridium capacity after the U.S. Defense Department,” Peto said June 23 during a Paradigm briefing at the company’s Stevenage, England, facility. “We are a heavy user of commercial satellite capacity.”

The NATO official said NATO’s two Strategic Command installations, Allied Command Operations in Mons, Belgium, and Allied Command Transformation in Norfolk, Va., have presented NATO’s Consultation, Command and Control (C3) Agency with a list of requirements that NATO C3 Agency is now adapting to the three-nation group that will provide the satellite capacity.

The next step for NATO after the signing of the contract is to accommodate the Strategic Command requirements and the available satellite assets with a NATO-financed ground network of SHF- and UHF-band communications links and other gear.

These purchases will be a separate procurement not included in the contract to be signed this autumn for the satellite capacity, valued at 457 million euros ($557 million).

NATO also is committed to purchasing EHF-band satellite capacity, but the NATO official said this procurement will not occur this year and possibly not in 2005 either.

The U.S. and French governments have expressed interest in bidding for this contract, although French officials concede that the United States has an advantage because it has made EHF a priority.

“We are still assessing what will be available in EHF, and when,” the NATO official said. “What seems clear now is that an operational capacity will not be in orbit before 2010. Once we get a better idea of the date, we can consider asking for competing bids.”
 
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