8 April 2001

Satcoms

Intelsat's Broadband Initiative
Intelsat has issued a Request for Proposal (RFP) for the purchase of a next-generation broadband satellite system as a key component of the organisation's initiative to address growing IP market demands worldwide.

The RFP includes one geostationary Ku/Ka-band satellite operating in a bent pipe configuration, with options for up to four more spacecraft. The system is expected to support last-mile access for small and affordable user terminals as well as customers who target small and medium enterprises and small office-home office users. Intelsat's goal is for the contract to be awarded by the autumn, with deployment expected to occur in 2004.

Along with the RFP, Intelsat is looking at other opportunities to address broadband business issues. Included are current and upcoming services on its existing satellite fleet, as well as a continuing investigation of new system alternatives.

MTN Provides Comms for Baker Oil Tools Vessel
Maritime Telecommunications Network Inc (MTN) has been awarded a three-year contract to provide a complete C band system, including antennas, stabilised platforms and terminal services, onboard Baker Oil Tools' newest vessel, the HR Hughes.

MTN and Baker Oil Tools' service relationship extends back to 1999 when Baker Oil Tools installed a complete C-band system onboard the RC Baker. The HR Hughes is currently under construction at North American Shipyard and is scheduled for the installation of a C band system this April.

The leased C band system will be implemented using two satellite circuits, one primary 128 kb/s circuit with a backup circuit of 128 kb/s. Ship-to-Shore communications will be enabled by 24 x 7 satellite links with sufficient bandwidth for four phone lines (typically configured for two voice lines, one fax and one data line), and a full-time network connection.

MTN provides communications services to over 30 offshore oilrigs and seismic vessels, worldwide.

Two New Earth Station Contracts for Nera
Nera has won one contract with a telecom operator in Singapore and another contract with Hellenic Telecom Organisation (OTE) in Greece to deliver land earth stations.

The contracts have a combined value of 50 million Norwegian kroner.

Nera, has for a number of years, been a supplier of land earth stations to Singapore, and the new contract is for the provision of Nera's latest generation technology for land, mobile, voice and data communication via satellite.

OTE is the Greek national telecommunication provider. The contract awarded to Nera is for the upgrade of an existing land earth station to the latest generation technology for voice and data communication as well as equipment for transmittal of data packets and providing internet accesses via satellite. The contract represents a continuation of a longstanding and close co-operation between the companies, which started in the early eighties when Nera delivered a first generation maritime land earth station for Inmarsat A system to OTE.

Both contracts will be carried out in 2001 and 2002.

Earth Observation

Ball Aerospace to Build AVStar Satellites
AstroVision International Inc has selected Ball Aerospace and Technologies to build the first two satellites of its AVStar satellite constellation, with an option to build a further three satellites.

AstroVision intends to launch a constellation of five satellites which will provide a continuous, live video feed of the Earth. The first launch is scheduled for 2003.

Military Space

Russian Space Forces
Russia is to form the Russian Space Forces by 1st June, under the leadership of Anatoly Perminov who was appointed as commander of the new arm of the Russian military last week.

It is expected that the new organisation will be focused on launching and operating satellites for communications, navigation and observation.

Space Laser Experiment Team Completes Review
The team of aerospace contractors developing the US Air Force's Space-Based Laser Integrated Flight Experiment (SBL-IFX) has successfully completed the experimental satellite's System Requirements Review, taking a major step forward in the ongoing design and manufacturing development process.

Team SBL-IFX, a joint venture comprising TRW, Lockheed Martin and Boeing reviewed SBL-IFX's system-level specifications and key development milestones with the US Air Force and Ballistic Missile Defense Organization (BMDO) during the review.

SBL-IFX is planned as a single satellite carrying a laser payload comprising a high-energy chemical laser, a beam director and related beam control systems. Team SBL-IFX and the Air Force expect to launch the satellite in 2012, with an on-orbit demonstration of the satellite's ability to detect, track and destroy a boosting missile target planned for 2013. A successful test will pave the way for the USA to consider developing a constellation of space-based laser satellites as part of a layered missile defence architecture.

Completion of the SRR will allow the team to begin preparing detailed specifications for the IFX down to major segments, including the space, payload and ground segments of the experiment. Those specifications will be completed by the autumn of 2001, in time for the program's System Definition Review.

Team SBL-IFX is developing the SBL-IFX for the US Air Force under a US$ 240 million contract funded in part by BMDO.

Science

Mars Microphone to Fly on NetLander Mission
The Planetary Society's Mars Microphone is to fly to Mars in 2007 with the Centre National d'Etudes Spatiales (CNES) NetLander mission.

NetLander will deploy four landers on the surface of Mars and network them together to study the deep interior, geology and atmosphere of Mars.

The original Mars Microphone package was flown on the Mars Polar Lander mission in 1999 and was lost when the spacecraft was destroyed as it entered the Martian atmosphere.

The instrument was developed by the University of California Berkeley's Space Sciences Laboratory for The Planetary Society. It is designed to record whatever sounds there are on Mars, such as wind, dust and electrical discharges in the Martian atmosphere as well as noises of the spacecraft itself. The microphone can be triggered randomly by naturally occurring sounds or it can be programmed to listen to specific lander actions.

The microphone will focus on sounds in frequencies audible to humans. Another sensor, delivered by the Institut de Physique du Globe de Paris, will extend sound measurement to infra-sounds, generated at low frequencies.

The Mars Microphone is constructed largely of off-the-shelf parts, including a microphone similar to those in hearing aids and a microprocessor chip used in speech recognition devices. The microphone uses Sensory Inc's RSC-364 IC chip, the most popular IC for speech recognition in consumer electronics.

TRW to Study Compton GRO Successor
TRW has been awarded a six-month study contract by NASA's Goddard Space Flight Center to refine its development concept for NASA's Gamma Ray Large Area Space Telescope (GLAST), a successor to the TRW-built Compton Gamma Ray Observatory (Compton GRO).

Scheduled for launch in 2005, GLAST will study celestial phenomena that produce gamma rays, the most energetic form of radiation.

Under terms of the contract, TRW will work with NASA to define the best ways to modify TRW spacecraft to accommodate the interface requirements of the GLAST instruments and the overall requirements of the GLAST mission. TRW expects to use its T-300 line of spacecraft as a baseline for the GLAST mission.

GLAST will carry a 3,000 kg science payload comprising the GLAST Large Area Telescope (LAT), provided by Stanford University, and the GLAST Burst Monitor, provided by NASA's Marshall Space Flight Center. The instruments will study cosmic phenomena such as gamma ray bursts, neutron stars, supernova remnants and distant galaxies fuelled by super massive black holes at their centres. The LAT instrument is expected to be about 30 times more sensitive to gamma ray events than the Energetic Gamma Ray Experiment Telescope used aboard Compton GRO.

Technology

Phoenix - Astrium's Reusable Demonstrator
Astrium has announced it is developing a demonstrator, called Phoenix, for a reusable space transport system

Development, construction and testing are scheduled for completion by the end of the year 2003.

The demonstrator will be nearly seven metres long, will have a wingspan of 3.8 metres and will weigh 1,200 kg. The cost of the project is Euro 16 million.

A small prototype is necessary because it is not possible to evaluate all of the features of the craft using computer simulations and wind tunnel tests.

Launch Services

GSLV Update
The next attempt to launch India's first Geosynchronous Satellite Launch Vehicle (GSLV D1) will be made between 15 and 25 April.

The first launch attempt was aborted seconds before lift off when one of the launcher's strap on liquid fuelled boosters failed to reach the required thrust. The failure has been attributed to the malfunction of a regulator in the strap on booster.

Integral Systems Awarded Contract to Provide Echostar Control Software
Integral Systems Inc has been awarded a contract by EchoStar Communications Corporation to provide the primary and backup control software for the EchoStar VII, VIII, and IX satellites, scheduled for future launch.

EchoStar VII is a Lockheed Martin A2100 satellite, while EchoStar VIII and IX are both Space Systems/Loral FS1300 satellites. EchoStar's existing control centre, also provided by Integral Systems, will be expanded to incorporate these three additional satellites.

The Integral software performs real-time command and control, offline trending, and satellite navigation in support of the satellites which comprise the space segment of DISH Network, EchoStar's broadcast satellite TV system.

NASA Chooses Delta II for Swift Spacecraft
NASA has announced plans to exercise a contract option with the Boeing Company for a Delta II 7320-10 expendable launch vehicle to launch the Swift Gamma Ray Burst Explorer spacecraft.

NASA's total launch services budget for the Swift campaign is approximately US$50 million dollars.

Using multiple instruments, Swift is the first-ever spacecraft designed to detect, observe and characterise gamma ray bursts in several different wavelengths. It is designed to provide a definitive answer regarding the nature of gamma ray bursts and will also perform the first sensitive hard x-ray survey of the sky. Over the operating design life of three years, Swift will observe approximately 1,000 gamma ray bursts.

Swift is scheduled for launch September 2003 from Cape Canaveral Air Force Station, Florida.

Launches

Ekran-M

Launched: 6 April 2001
Site: Baikonur Cosmodrome, Kazakhstan
Launcher: Proton-M/Briz M
Orbit: GEO: 99° E
International Number: 2001-013A
Name: Ekran M16

Ekran M16 (also known as Ekran M18 and M24) is a domestic communications satellite. It is expected to replace Ekran 20 in the 99° E slot where it will be used for TV and radio broadcasts to the Russian Far East and Siberia.

This was the first launch of the Proton-M/Briz M combination. It is capable of placing 21,000 kg into low earth orbit (LEO) at 51.6° inclination.

2001 Mars Odyssey

Launched: 7 April 2001
Site: Cape Canaveral Air Force Station, Florida
Launcher: Delta 2
International Number: 2001-014A
Name: 2001 Mars Odyssey
Owner: Jet Propulsion Laboratory
Contractor: Lockheed Martin Space Systems

2001 Mars Odyssey is a planetary probe bound for Mars which should arrive at the Red Planet on 20 October this year. It will orbit Mars searching for water ice below the Martian surface and will monitor any potential radiation hazards which could affect future human explorers.

The spacecraft carries three scientific instruments to map the chemical and mineralogical makeup of Mars: a thermal-emission imaging system, a gamma ray spectrometer and a Martian radiation environment experiment.

After completing its primary mission, the Odyssey orbiter will provide a communications relay for future American and international landers, including NASA's Mars Exploration Rovers, scheduled for launch in 2003.

Business

Class Action Filed Against Globalstar
The law firm of Schiffrin & Barroway has filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all persons who acquired Globalstar Telecommunications Limited debt securities between December 6, 1999 and October 27, 2000.

The complaint charges Globalstar and certain of its officers and directors with issuing false and misleading statements concerning the Company's financial condition and prospects. The complaint alleges that defendants misrepresented the Company's plans on when it would roll-out its satellite phone network and the demand for the system. As a result, the value of Globalstar's debt was artificially inflated during the Class period.

Gilat's Restructuring Charges
Gilat Satellite Networks Ltd has provided details of its corporate restructuring plan. This restructuring plan involves, among other things, reduction in workforce worldwide, streamlining physical facilities, discontinuing secondary product lines, and moving to a wholesale model for the international consumer segment.

In connection with the restructuring, the Company has expenses totalling approximately US$ 28 million which will be presented in the results for the first quarter ended March 31, 2001, of which approximately US$ 10 million will be classified as restructuring expenses. The remainder, representing expenses associated with the restructuring, will be included in operating expenses.

Globalstar 2000 Financials - Bankruptcy a Possibility
Globalstar's year 2000 results show continued minimal growth in voice traffic as well as reporting that the company has taken a US$ 2.9 billion non-cash charge related to the carrying value of the Globalstar system.

Globalstar ended the year 2000 with approximately US$ 197 million in cash on hand, which it believes to be sufficient to continue its operations through 2001, and it is continuing to meet its obligations to its employees, customers, and trade suppliers.

The estimated number of mobile and fixed subscribers at the end of 2000 was 30,583. The mobile and fixed subscriber total as of March 18, 2001, was 40,009.

In the fourth quarter, Globalstar recorded a US$ 2.9 billion non-cash impairment charge related to the US$ 3.2 billion carrying value of the Globalstar system, including spare satellites, unsold equipment and other assets. This charge resulted from the company s revision of estimated gross cash flows through 2009, which is the estimated useful life of the Globalstar satellite system.

Gross service revenue for the fourth quarter was US$ 1.1 million and net revenue, including royalty income from phone sales and less discounts and promotions, was also US$ 1.1 million. Both were essentially flat compared to gross and net revenues in the third quarter, due in large part to the slowdown of usage during year-end holidays and lower royalty income. Growth in revenue resumed in the early part of 2001.

For the full year, gross service revenue was US$ 2.8 million, and net revenue was US$ 3.7 million.

The impairment charge, combined with operating losses and other expenses, resulted in a total net loss of US$ 3.8 billion for the year. The portion of this loss that is applicable to Globalstar Telecommunications Ltd (GTL) is US$ 2.1 billion or US$ 20.85 per common share of GTL.

In order to remain solvent, Globalstar has suspended indefinitely principal and interest payments on all of its funded debt, including its credit facility, vendor financing agreements and Senior Notes, as well as dividend payments on its preferred stock. The suspension of these payments will reduce the company s payments by approximately $400 million for the year 2001. However, as a result of these actions, defaults have occurred with respect to some of Globalstar s debt.

In its annual filing, Globalstar warned that its restructuring plan may fail if it conflicts with certain restrictions under existing agreements or if it cannot forge an accord with its creditors. If this is the case it may seek bankruptcy protection.

Harris Corporation to Acquire Exigent International
Harris Corporation and Exigent International Inc have signed a definitive merger agreement for Harris to acquire Exigent through a cash tender offer and merger.

Exigent provides software and services for satellite command and control, telecommunications, and information technology, primarily for government markets.

The board of directors of each company has approved the transaction. Under the terms of the transaction, Manatee Merger Corp, a wholly-owned subsidiary of Harris Corporation, will commence a cash tender offer for all of Exigent's approximately 6 million outstanding common shares at a price of US$ 3.55 per share in cash. The transaction values the equity of Exigent at US$ 23 million, which includes payments for in-the-money Exigent employee stock options.

Exigent is headquartered in Melbourne, Florida, and employs approximately 260 employees, including 220 engineering and technical personnel. Calendar year 2000 revenues were approximately US$ 38 million. Exigent has primary engineering and service centres in Melbourne and the Washington, DC area, with smaller centres located in Colorado and North Carolina. Exigent operates through three subsidiaries: Exigent Software Technology Inc, Exigent Digital Telecom and Wireless Networks, and Exigent Solutions Group.

Iridium Satellite Reveals Ownership
A regulatory filing made by Iridium Satellite, the new operator of the Iridium system, has revealed the ownership of the company for the first time.

Iridium Satellite made the filing to enable it to transfer licences held Motorola and used by the bankrupt Iridium LLC. Iridium Satellite is trying to get a waiver on a limit of the normal 25% ownership cap on foreign investors in US telecommunications service providers. Foreign investors own a total of 61% of Iridium Holdings LLC, the parent of Iridium Satellite.

Iridium Carrier, a further Iridium Holdings affiliate, is trying to gain approval for the transfer of licences for the Iridium handsets which are also held by Motorola.

The main shareholders in the three new Iridium companies are:

• Baralonco NV (Netherlands Antilles) 24.3%: controlled by Prince Khalid bin Abdullah bin Abdulrahman, a Saudi citizen
• Bareena Holdings Party Ltd (Australia) 26.9%: owned by Michael Boyd
• Milport Associates SA (Panama) 8.9%: owned by Inepar (Brazil)
• Syndicated Communications Inc (USA) 26.9%: controlled by Herbert Wilkins

Loral Space and Communications Sees Trouble Ahead
Loral Space & Communications is in a dire financial situation, heavily burdened by its 38% shareholding in Globalstar, a massive debt burden, reducing revenues from its Space Systems/Loral subsidiary, ever increasing competition and problems with its satellites. 2001 is going to be a difficult year.

Loral, in its annual filing with the US federal securities regulators reveals that if it cannot make its business plan work it may not have enough cash to meet its obligations.

Loral's loss for the year 2000 was US$ 1.54 billion (US$ 247 in 1999) which translates to US$ 5.20 per share (US$ 0.85 per share in 1999). The 2000 results included a charge of US$ 2.9 billion against earnings for Loral's Globalstar involvement.

Globalstar has recently stopped making interest payments on its debts in a desperate attempt to fight off bankruptcy. These debts amount to US$ 1.45 billion in outstanding senior notes, US$ 500 million outstanding under a credit facility, US$ 250 million in three-year notes and US$ 788 million of vendor financing. Much of this debt is with Loral.

Loral has some US$ 394 million in cash which it intends to use to develop satellite technology and hardware, its new corporate strategy following the acknowledgement of Globalstar's probably fatal problems. Unfortunately for Loral its cash reserve may not be enough and it may have to raise more cash in the capital markets if it is to succeed with its business plan and to meet its obligations. In its current state the company may find it impossible to raise money in this way with analysts rating Loral debt at junk status.

Space Systems/Loral is the only health part of the company, generating some 80% of the operating revenues for Loral in 2000. Even here Loral faces significant problems. SS/Loral only has a few customers, but these include Globalstar and start up companies, organisations which must be seen as high risk and there is no guarantee that they will be able to pay for the satellites they have ordered. Furthermore, SS/Loral is under grand jury investigation for possible violations of export control laws in 1996. In the worst case SS/Loral could be banned from exporting. To make matters worse SS/Loral has been developing business relations with China and has a satellite under construction, which it has not been able to export for some time. Last week, in a statement, the company believed that relations with China were improving and that the export would be permitted - then a US plane made an impromptu landing in China. If the Chinese cancel the contract because of SS/Loral's inability to deliver, SS/Loral could face penalty payments and rework costs amounting to hundreds of millions of dollars.

Rockwell Halts IFN Investment
Rockwell International Corporation has announced that it has stopped further investment investments in its In-Flight Network (IFN) joint venture because the market has shown little interest in the system.

In connection with this action, the company will take a non-recurring after-tax charge of approximately US$ 16 million in the second quarter of FY 2001 for the write-off of inventory related to the IFN initiative.

The IFN system, which uses Globalstar satellites, was tested successfully last year, but has so far failed to attract any commitments from the major airlines.

Sirius Warns of Low Subscriber Growth
Sirius Satellite Radio Inc has warned analysts that it may have difficulty meeting expectations for the number of subscribers the company will attract in 2001.

Sirius needs to begin commercial service by September if it is to meet subscriber projections set by industry analysts. Sirius has not specified when it intends to begin commercial service except to say it will be in late 2001.

However, a number of factors have worked against the company delaying the launch of service. The main problem has been difficulties experienced by chip suppliers which have delayed the availability of chips for the manufacture of the radios.

People

Astrolink Adds Legal VP to Team
Astrolink International LLC has announced the appointment of Robert Horvath to the position of vice president and corporate counsel.

As vice president and corporate counsel, Mr Horvath will be responsible for legal issues relating to the establishment of Astrolink's overseas offices, operations and employees. In addition, he will also be responsible for real estate, tax, regulatory, and certain other general corporate and financing matters.

Astrolink is owned by Liberty Media, Lockheed Martin Global Telecommunications, Telespazio, and TRW. Based in Bethesda, Maryland, Astrolink will build and operate a global telecom network based on next generation satellite technology. Astrolink will focus on the high-growth area of broadband data services, carrying traffic for Internet, intranet, multimedia, and corporate data networks.

Sirius Satellite Radio Names CFO
Sirius Satellite Radio has appointed John Scelfo as Chief Financial Officer.

From its three orbiting satellites, Sirius will directly broadcast up to 100 channels of digital-quality radio to motorists throughout the continental United States for a monthly subscription fee of US$ 9.95. Sirius will deliver 50 channels of commercial-free music in virtually every genre, and up to 50 channels of news, sports, talk, comedy and children's programming.

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