The Fate of ABS-8

Ex-im’s lending timeout was “Blessing in Disguise” for Fast-growing ABS

When the U.S. Congress shuttered the Ex-Im Bank in 2015, an untold number of commercial satellite orders stalled out or changed hands. ABS-8 was the first to publicly fall apart. After announcing the deal with Boeing that June, ABS rescinded its order six weeks later.

The all-electric,  tri-band satellite was to replace ABS-7, a now 17-year-old Lockheed Martin satellite that ABS bought from Korea Telecom in 2010. ABS is still in discussions with Boeing about building ABS-8, though  ABS Chief Executive Tom Choi said he’s also consideringcompeting offers. But in the 16 months since ABS canceled its order, the Bermuda-based operator has radically changed its future satellite plans.

ABS is taking ABS-8 back to the drawing board after concluding that competitor ViaSat’s forthcoming ViaSat-3 satellites will set a new industry benchmark for high-throughput capacity. In an interview with SpaceNews, Choi said Ex-Im’s lending timeout has turned out to be a “blessing in disguise” for ABS.

It was only after the bank’s closure put the brakes on the ABS-8 deal that Carlsbad, California-based ViaSat fully revealed its intentions to cover the globe with three enormous broadband satellites each promising a blistering 1-terabit-per-second of throughput.

“The ABS-8 we designed in 2015 would have been made obsolete by ViaSat-3,” Choi said, praising ViaSat Chief Executive Mark Dankberg for going all-in on the high capacity front.

“He has set the bar very high, and unfortunately for all the other satellite operators who have launched or are currently building lower-capacity high-throughput satellites, their satellites are not going to be cost-competitive versus ViaSat-3,” Choi said. “This means ABS-8 and all of our future satellites designed for data services will have to meet the cost-per-gigabit bar set by ViaSat-3.”

ViaSat contracted with Boeing in February for two ViaSat-3 satellites built around high-throughput Ka-band payloads ViaSat is building in-house. The first two satellites will cover the Americas, Europe, the Middle East and Africa; a third satellite, for Asia, hasn’t been ordered.

ViaSat’s announcement shook up a lot of operators, but none have been as candid as ABS about how they intend to adapt their businesses. Choi said ABS has good ideas on how to obtain bandwidth economics that will be competitive with ViaSat-3, and “not in the obvious ways people are thinking about.”

One of the selling features ABS has in mind for ABS-8 and its successors is the introduction of what it calls ultra-high throughput, or UTS, capacity. Choi expects UTS satellites, combined with a “rainproof VSAT” ABS has patented, will raise the bar even higher than ViaSat-3.

“Our future UTS systems will be comparable in price/Mbps [to] ViaSat-3 but it will be rainproof because we can deliver 99.9 percent availability. In this way it will be far superior to ViaSat-3 or any other Ka – or Ku-band-only HTS system,” he said.

Choi described UTS as a combination of extremely low per-gigabit costs and high levels of availability for end users. When it comes to data services (broadcast TV was 45 percent of ABS’s  business in  2016), ABS has its eyes chiefly on consumer broadband and telco customers, markets Choi said dwarf aeronautical and maritime. Excluding aero mobility due to the lack of a need for C/Ku-band load balancing, he said satellite operators bringing HTS capacity to bear should be worried about more than just ViaSat-3.

“Once our UTS satellites launch, we will be ourselves ‘obsoleting’ other HTS satellites because only our terminals will be delivering the low cost per gigabit while giving extremely high availability,” he said.

Choi said ABS is still trying to close a deal for ABS-8 and has been exploring ways to proceed with or without Ex-Im — which despite reopening last December still can’t approve loans in excess of $10 million without further action from Congress.

“We will continue to explore our satellite ideas and design concepts with U.S.-based vendors and a select few outside the U.S. for our future satellite orders,” Choi said. “Although we hope for Ex-Im Bank of the U.S. to regain [a] full board to approve future projects, for some of the options for ABS-8, we would not need to rely on Ex-Im financing.”