Antrix on the hunt for satellite JV

Antrix Corp, India’s only space services company, is out to break new ground in the $2.5 billion industry.

The Rs 1,000 crore firm is scouting for joint ventures with similar overseas firms to own and operate satellites.

It is talking to one European and a regional company, to buy a large sized communications satellite, managing director K R Sridhara Murthi told DNA.

“We are looking to build strengths in new areas and have kicked off talks with these parties to own and operate satellites,” Murthy added. But he refused to divulge the names of the involved parties pending finalisation of a deal.

The move follows an earlier attempt at a similar JV in 2004 with Malaysia’s MEASAT Global to develop a satellite neighbourhood for broadcasting and telecom customers across the wider Asia-Pacific region.

“We can invest $50 million plus towards such a JV,” Murthy said.

The funds would come from the company’s reserves, while it could raise another $20 million-odd from banks, he added. Antrix has a cash reserve of $100 million to which it is adding $20 million every year.

Typically, a medium-to-large communications satellite would cost in the region of $100 million. Demand for new video content and interconnectivity is pushing up demand for new satellite systems. High-definition television (HDTV) bandwidth, mobile services backhaul, and satellite broadband access services continue to drive growth.

Antrix functions as the marketing arm of the Indian Space Research Organisation (Isro), selling satellite imagery, transponder capacity on satellites launched by Isro and satellite launch services to foreign companies and other countries.

Set up in 1992 with an investment just Rs 1 crore, Antrix has a networth of Rs 450 crore today. About 50-60% of its revenue comes from transponder capacity rentals, while satellite launch and imaging services account for a significant chunk of the rest.

The company is on track to notch a growth rate of 10-15% in the current year, Murthy said.

The proposed JVs will help in new revenue streams and considerable asset creation. Murthy, however, expected the satellite launch business to get a fillip on account of two developments — the impending liftoff of the Geosynchronous Satellite Launch Vehicle (GSLV) Mark 3 later this year and the recently concluded Technology Safeguards Agreement, and the proposed Commercial Space Launch Agreement (CSLA), with the US.

GSLV Mk3, expected to be ready later this year, will be available for commercial use by 2011. Capable of launching satellites of up to 4 tonnes in weight, it will open up a segment that accounts for 30-40% of the launch market. “We are aiming a launch business worth between $100-200 million from GSLV Mk3,” Murthy said.
The Polar Satellite Launch Vehicle, which has been used for 16 launches so far, can only launch satellites up to 2.5 tonnes in weight.

Antrix has an understanding with over 26 countries to launch satellites and competes with the US, Russia and European Arianespace Agency for the market.

“Our aim is to be at least 20-30% cheaper than our competitors in the launch business apart from being known as a reliable partner,” Murthy said.

While the Technology Safeguards Agreement (TSA), with the US opens up the government-to-government business for Antrix, the follow-on CSLA needs to be signed before restrictions on US private sector companies and universities are eased.

Once this is done, it would open up a further market for Antrix to tap in the US that includes several universities and communications companies that want cheaper services.
Murthy says there is big demand for launching smaller satellites, or nano-satellites, as multiple payloads in one liftoff. India set a record of sorts in 2008 when it launched nine nano-satellites into orbit.

Currently, there is launch backlog of 10 satellites over the next two years. However, going forward, Murthy is confident of Antrix averaging 6-7 launches per year, totalling upwards of 15-20 commercial and non-commercial satellites in the next 2-3 years.