Ciel Satellite to pursue additional orbital slots, wants three in total

Ciel Satellite Communications Inc. doesn’t plan to stand pat on the 129 degrees west orbital slot it was awarded earlier this month (RoW Update, Sept. 24/04). The company says it has plans to build and deploy a fleet of satellites. In a recent interview with Report on Wireless, Kevin Smyth, CEO of Ciel, says the company needs at least two additional satellites to be competitive in the market. He explains that with Telesat Canada offering a wide range of services, including broadcast, broadband and VSAT, Ciel needs to offer a comparable portfolio of services to be able to compete effectively against the incumbent. "…Our belief is that in order to fully realize the introduction of a competitive market in this country we’re going to need to be able to provide a full suite of services like the incumbent. But with one slot it’s difficult to do that. For example, (the 129) slot doesn’t allow broadband services at all…At the end of the day our aspirations are to really have a fleet." In its original application, Ciel had applied for access to the Ka-band in the 118.7 degrees west orbital slot and the C- and Ku-band spectrum in the 109.2 degrees west orbital position. Smyth refused to go into details about the specific orbital slots on the company’s radar, citing the need to first "ratify" its provisional licence. But he adds that Ciel looks forward to participating in future licensing processes. The Ottawa-based firm plans to begin offering service before the Aug. 25, 2005 deadline using an existing in-orbit satellite on a temporary basis. Smyth wouldn’t say where the company is getting the satellite, but it is likely that the in-orbit bird will come from its partner SES Americom. He wouldn’t go into detail about any of the other conditions of licence the company will have to meet. The company plans to have its first built satellite in service by 2009. "We’re in a stage where we’ve been granted a provisional licence (and) the next stage is to finalize terms of licence, and Industry Canada has to see certain definitive agreements and a certain Canadian ownership and control. While that process is taking place, we’re not talking about a lot of the details and so where the satellite is coming from is something that falls into that category," Smyth tells RoW. Ciel is working with Industry Canada to satisfy the Canadian ownership and control requirements. When Industry Canada announced that it had provisionally granted Ciel the 129 degrees west orbital position, it drew the ire of Telesat. The BCE Inc. subsidiary wasn’t happy about the decision, describing Ciel as a "storefront" for SES Americom. "In the last six years from the launch of Nimiq to the launch of (Anik) F3, we would have invested over $2 billion in Canadian infrastructure. The orbital slots are the real estate you need to be able to grow and expand, and the most maddening part about this is being put in the guise that this is a new Canadian entrant…This is not a new Canadian entrant, it’s an old American entrant. This is a storefront for a U.S. operator and, by the way, the biggest operator in the world, SES Americom," Paul Bush, VP broadcast and corporate development, tells RoW. Bush expressed concern that Ciel would simply sell capacity back to the United States. "We are going to be watching very, very closely in terms of the conditions of licence because we have conditions of licence to provide service in Canada…we have conditions of licence in terms of research and development, in terms of public benefits capacity, in terms of contribution fees, licence fees, etc. We will make darn sure that these guys are also going to be doing this and they’re also going to be providing service in Canada," he says. Smyth says capacity will be available for Canadians. "What I can say is we are following a Canada-first policy…for example, no capacity can be sold outside of Canada if there’s anyone in Canada that’s interested in the capacity. There’s a first dibs for Canadian customers," he explains. The Ciel CEO also took offence to statements that the company was nothing more than a front for a U.S operation. He admits the company is still trying to settle Canadian ownership and control requirements, but adds Barrett Corp., Borealis Infrastructure Corp., and Smyth Satellite Holdings Inc. are the Canadian shareholders. SES Americom is a minority stakeholder. "I can’t speak to the motivations of people that are calling us a storefront for a U.S. entity, but we are Canadian owned and controlled, and we’ve got all kinds of obligations and inclinations to work with Canadian industry. We’ll build facilities in Canada. We’re bringing high-tech jobs to the Ottawa region," Smyth states. But, he says, this is about opening Canadian skies to domestic satellite competition and whether the Canadian market is ready for true competition to be introduced. "Industry Canada did it in waves. The first wave was to allow American operators to compete. That was an important first step, but the reality is American operators don’t really cover too far north of the GTA…," Smyth explains. Bush says he wouldn’t take issue with awarding Ciel the position if the American government allowed reciprocal access to U.S. orbital slots. "If it was fair ball and open game, I could go into the U.S. and get a slot, bring it on," he says, "Because I feel comfortable that we could secure and win some of the U.S. business. But it’s not. The Americans would never allow a Canadian entity to secure one of their prime DBS slots or Ku- or Ka- slots. "I have found that the most open country in the world to the south of us is very good at, in name, saying that there’s competition, but when it comes to getting through all the regulatory, getting through the secret service, the FBI and by the time you get all through that, if you can afford it and if you can withstand the pain, sure there’s competition. But to get the landing rights, to get licences to be able to get in, it’s cost us years of effort and it’s cost us a lot of resources in terms of trying to do it…If it was a two-way street and if we could really get access into the U.S. market and some of their facilities, it’d be a different story, but it just doesn’t happen that way," Bush tells RoW. At least two of the largest U.S. satellite operators were at one point controlled by non-American interests. SES Americom’s parent company is based in Luxemburg. Panamsat was once owned by Australian-born Rupert Murdoch, but is now controlled by Kohlberg Kravis Roberts & Co., an American buyout specialist. Intelsat was born out of a United Nations resolution in the 1960s, but is now a private company based in Bermuda.

Ciel Satellite to pursue additional orbital slots, wants three in total

News | October 5, 2004

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