NEW YORK-Mobile Communications Holdings Inc., Washington, D.C., announced The Boeing Co. is to be the system integrator for the new Ellipso mobile satellite system in a contract valued at more than $1.4 billion.
The Ellipso system, which could make its commercial debut as early as 2000, will focus on telephone service. It also will provide digital data transfer, fax, paging, voice-mail, messaging and geopositioning services.
As a systems integrator contractor, Boeing will use its capability as a large systems producer and integrator to achieve a low-cost, satellite-based communications system, MCHI said. Up to 300 Boeing employees, mostly based in Southern California, will work on the systems integration project, which includes design, development, construction and deployment.
Boeing Satellite and Ground Control Systems, Seal Beach, Calif., also is prime contractor for the space segment of Ellipso, including satellites and launch services.
“This arrangement with Boeing further validates the system’s viability and signals the industry enthusiasm generated by the unique Ellipso orbital configuration …” said David Castiel, president and chief executive officer of MCHI.
The MCHI Ellipso constellation has a patented “highly elliptical orbit” configuration using two complementary sub-constellations totaling 17 satellites, one of which is to be an on-orbit spare. Use of elliptical orbits requires fewer satellites and launch services while also allowing better coverage of highly populated areas during peak daylight hours, MCHI said.
“HEO constellations gain efficiency by passing very close to the earth at high speeds over the South Pole but slowing down at the apogee of their orbits over the populated Northern Hemisphere,” Thomas W. Watts, vice president of Merrill Lynch U.S. Fundamental Equity Research, New York, wrote in a newly released report about the satellite industry.
“The slowing down effect maximizes the time the satellite remains overhead, thus reducing the number of satellites required to provide continuous service. Orbits can be reversed for Southern Hemisphere coverage.”
Besides serving as a systems integrator, Boeing will be an equity partner with MCHI, Mobile Communications Holdings said. MCHI did not place a dollar value on Boeing’s equity stake.
According to Watts of Merrill Lynch, Ellipso had received a total of $450 million in equity commitments as of late April. This includes $50 million from its prime contractor, Orbital Sciences Corp., which also is a major stakeholder in Orbcomm Global L.P.
“We believe later entrants, including Ellipso, will compete aggressively on price, but in doing so, (will) broaden the market to include a wide range of casual MSS users as well as the target intensive business user,” Watts said.
