NewSat CEO Lashes Out on NBN Over Satellite Lease
NewSat CEO Adrian Ballintine was upset that NBN never consulted his company on matters relating to the government's satellite broadband development project.
- (1888PressRelease) February 28, 2012 - NewSat CEO Adrian Ballintine finally broke his silence over NBN's snubbing the satellite service provider. NewSat expected to be one of the prospective contractors to be considered for the multi-million National Development Broadband Project. NBN already awarded a $620 million contract to a foreign venture, Space Systems/Loral, for manufacturing two Ka-band satellites for the NBN.
Ballintine hoped NBN would have opted to lease satellite communications capacity on the upcoming Jabiru satellites, which can significantly cut project cost. Ballintine's public criticism came after some NBN opponents question whether the government-owned company has been prudent enough in cost control. The CEO said he cannot understand why NBN did not opt to lease satellite communications capacity instead. To date, NewSat is the largest employer in the local satellite communications industry, operating two state-of-the-art teleports in Perth and Adelaide. NewSat is planning to launch its own Ka-band satellites ahead of the launching of NBN's satellites.
With billions of dollars allocated for long-term broadband development, NBN critics led by Tony Abbot of the opposition party is calling on NBN to hold back its fiber optic and satellite projects. Some were alarmed by the low subscription rate of NBN networks, which is far below the initial forecast. Abbot said the low activation rate does not justify spending billions on telecommunications infrastructures like satellites.
NBN CEO Mike defended the company's decision to build satellites rather than lease capacity since the country has no sufficient satellite infrastructures. Moreover, Optimus has already confirmed that it has no sufficient Ka-band capacity to meet the demand of NBN.
There is a possibility of unhealthy competition resulting from the excess capacity of NBN's satellites, warned Ballintine. One of the two proposed NBN satellites is mainly intended for backup purposes only. The spare capacity can be resold and find its way in the commercial market for consumption by oil , mining and gas industries. This could have a serious effect on NewSat's business, Ballintine said. He added that taxpayers would definitely hate the idea of helping foreign capacity buyers to exploit cheap rates due to unused local surplus.
Nevertheless, the CEO is still optimistic of the prospects of the Jabiru fleet. Jabiru 1 and Jabiru 2 satellites are going well as planned, and the funding for Jabiru 1 is about to be completed. Over the past months, the company has been signing multi-million contracts with energy, telecommunications and mining companies, as well as the US military. The company is looking forward to securing credits from US Ex-Im Bank and Coface of France. The terms of the financing are expected to be announced in April or May.
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