Over five years since its inception, the Orion private satellite system has raised the $500m required to launch a satellite service that will compete with Intelsat and Eutelsat. The service should become a commercial reality in late 1994 or early 1995 following the launch of two satellites. The consortium of seven companies is concentrating on competing in the US-Europe telecommunications market and has ordered two British Aerospace Plc Eurostar-based communications satellites to be positioned over the Atlantic. The company estimates the value of the contract at $425m. The venture’s business structure is labyrinthine in order to avoid US regulations that presently still prevent foreigners from owning more than 25% of a US telecommunications licence. To that end US-based Orion Network Systems Inc acts as a holding company with a subsidiary called Orion Satellite Corp. It is this subsidiary’s task to act as a general partner of International Private Satellite Partners, accepting the legal liability and business while the other seven international groups are limited partners. British Aerospace is one of these partners, as well as being the prime contractor for building the system. The others are Com Dev Inc, the Canadian multiplexor company; General Dynamics Corp; Kingston Communications Ltd of Hull; Matra SA, Nisso Iwai Co the six largest trading company in Japan, and STET SpA, the Italian telecommunications operator. Commenting on the length of time which has elapsed between conception and delivery, Steven Salamoff, vicepresident of marketing for the Rockville, Maryland-based Orion Satellite Corp said that it ivery, Steven Salamoff, vicepresident of marketing for the Rockville, Maryland-based Orion Satellite Corp said that it achieve full funding before pressing ahead, combined with the international nature of the project.
Too early to talk about tariffs
Exactly how the service will be marketed is still in some doubt, Salamoff said that the partners hope to finalise the oparational$aspects in the coming months. On the one hand he hopes to see a single source in each country which will be able to offer satellite capacity, but on the other he has to maintain the roles of the International Private Satellite partners, some of which, like British Aerospace and Kingston Communications already have licences to offer satellite service, and currently use Intelsat or Eutelsat. On the technical side things are a little clearer. The satellites should make it possible for customers across North America and Europe to use roofmounted 1.2 metre dishes to establish private international networks. While it is too early for the group to talk about tariffs, the new satellites hold out the prospect of lowered charges in a market where Intelsat and Eutelsat, owned by the world’s telecommunications operators, own a virtual monopoly. In the UK the Regulatory Affairs Office, a semi-autonomous scion of British Telecommunications Plc has been criticised for the way in which it controls private access to the org-anisations’ satellites. While International Private Satellite Partners is committed solely to the provision of transatlantic links at present, Salamoff said that Orion Satellite may be interested in working to build global coverage, although such an expansion does not figure in the current programme.
