Satellites for Africa, perhaps a military one too

South African investors, including former communications director general Andile Ngcaba, the Oppenheimer family, Nedbank and the Industrial Development Corporation have formed a joint venture (JV) with satellite service provider Intelsat to put a US$250 million device in the sky over Africa in the next two years.
The New Dawn JV plans to put the satellite into the 33º East orbital location, which Intelsat says is ideal to serve the African continent. Intelsat currently has 25 satellites in service over the continent. 
The new satellite, to be called “Intelsat New Dawn,” will feature a payload optimised to deliver wireless backhaul, broadband and television programming to the continent and is expected to enter service in early 2011. The satellite will be operated and marketed as part of the global Intelsat fleet.
Intelsat says Africa has been one of the fastest growing regions for fixed satellite services in recent years, fuelled by demand for critical infrastructure from communications providers and television programmers.
Wireless telecom operators, broadband service providers, corporate network service providers and direct-to-home television operators have experienced growth along with the economic development of the region.
The New Dawn JV was thus established to provide solutions for African communication needs, and is expected to deliver new capacity for voice, wireless backhaul, Internet and media applications.
Over 50% of the satellite`s 28 C- and 24 Ku-band 36 MHz transponder units are under contract, with pre-launch commitments received from leading wireless, network and video service providers such as Vodacom International Ltd., Gateway Communications Africa (UK) Ltd., Zain Nigeria and Gilat Satcom.
Pre-orders for satellite capacity, or backlog, currently total more than US$350 million, with some contracts for up to 15 years of service on the satellite.
The JV has concluded agreements for the financing of the project, which is expected to cost a total of about US$250 million.
The project is to be funded approximately 15% with equity and 85% with debt, the debt being in the form of non-recourse project financing provided by African institutions.
Nedbank Capital, a leading telecom project financier in SA, has arranged the debt financing. Nedbank and the Industrial Development Corporation of South Africa, a self-financing national development finance institution, are the largest participants in the debt funding consortium.
The equity is to be provided by Intelsat (74.9%) and the Convergence Partners-led group (25.1%), which also includes Altirah Telecoms. Intelsat`s cash contribution to the project is expected to be approximately US$25 million.
Convergence Partners chairman Ngcaba says the announcement of the JV “marks an important milestone in the development of Africa`s infrastructure.
“The New Dawn joint venture, with its optimized satellite and African-led financing, represents a solution for Africa by Africa. Over the course of this satellite`s life, it will provide world-class connectivity, allowing businesses to grow and rural communities to connect. Convergence Partners believes that investments in African projects of this nature can offer superior returns while also accelerating the socio-economic development of the continent.”
Ngcaba – also computer group Dimension Data`s chairman – explains that Convergence Partners is a South African-based investment company focused on the telecommunications, media and technology sector, predominantly in Africa and the Middle East.
Altirah Telecoms is the common investment vehicle of Altirah Capital and the Oppenheimer family’s private equity portfolio, which has been set up for the New Dawn satellite venture. Altirah Capital’s principal partners are David Frankel, one of the co-founders and former CEO of the Internet Solution Group and Paul Salomon, a former investment banker.
The Oppenheimer family’s private equity portfolio is advised by Southern Cross Capital which is headed in South Africa by Peter Maw, one of the founders of Primedia. The Oppenheimer family’s private equity portfolio in South Africa has invested in a range of industries including telecommunications, logistics, information technology, financial services, media, retail and BEE initiatives. The Oppenheimer family has a large stake in De Beers and Anglo American.  
Intelsat CEO David McGlade says his company has provided satellite communications to Africa for more than 40 years. “We have witnessed the economic growth realized by our customers when they have access to reliable communications,” he says.
“The New Dawn joint venture is a great example of the type of creative investments Intelsat will use to further develop our fleet in regions where we believe there is unmet demand. Once in service, Intelsat New Dawn will be an integral part of our global, resilient satellite network, providing growth capacity and allowing us to further expand our services to our long-time customers in Africa.”
The New Dawn venture will compliment cloud-computing and Internet search-engine giant Google`s plans to roll out Internet connectivity in Africa. The company in September announced plans to launch a cluster of satellites to provide cheap, high-speed Web access via satellite to Africa and other emerging markets.
The US$650 million programme, named O3b Networks, a reference to the “other 3 billion” people on Earth who do not have Internet access, is backed by European big bank HSBC.
O3b Networks says their 16 low-cost satellites will be constructed by Thales Alenia Space and should be operational by the end of 2010, when they will link to cellular tower ground stations.  
Company’s founder Greg Wyler says O3b intends to offer fibre optic-like performance over satellite to parts of the world where it is not commercially viable or practical to deploy a fibre network.
Meanwhile, Foreign Minister Nkosazana Dlamini-Zuma late last month confirmed that the Department of Science and Technology-owned 80kg satellite, R11-million, earth observation satellite Sumbandilasat (ZA-002) will be launched on 25 March “weather permitting”.
She was speaking just after a session of the Russo-South African intergovernmental committee on trade and economic cooperation. The launch – initially using a R-29RM (SS-N-23) Shtil (“Calm Weather”) submarine launched ballistic missile from a nuclear-powered Russian submarine in the Barents Sea, near the North Pole – has been postponed multiple times since 2006.  
SunSpace export manager Ron Olivier says Sumbandilasat was built under a R26 million contract, which includes launch and shipping costs, as well as funding used by Stellenbosch University to present post-graduate and PhD courses on satellite development. The satellite itself cost R11 million, compared to the R8 million spent on its predecessor, Sunsat (Stellenbosch University Satellite), also an earth observation satellite.
“It has three times better ground resolution and, instead of a gravity gradient boom, which is not very stable, we can now, with three-axis stabilisation, keep it stable enough to achieve the 6.25m ground sampling distance objectives we set ourselves.”

Olivier explains this means one pixel = 6.25 sq metres. Images taken by Sumbandila will be downloaded by CSIR engineers at its Satellite Application Centre, at Hartebeeshoek, near Pretoria, as the satellite crosses over.

The satellite will also carry a number of experiments and an amateur radio payload. The CSIR will be responsible for the satellite’s day-to-day operations, as well as telemetry, tracking, control and data capturing.

Sunsat, or ZA-001, also built by SunSpace, was launched in February 1999 from Vandenberg Air Force Base, in California, on a Delta II rocket. It had a 23-month operating life and ceased functioning in 2001. It remains in orbit.
“We expect her to last five years plus, however,” Olivier says. Commissioning entails remotely switching the satellite on and “detumbling” it, as it will be “spinning at one heck of a rate”, Olivier has previously told defenceWeb.

Once stabilised, Olivier says, they will ensure the power system is working as designed and the solar panels are pointing to the sun and powering the satellite. They will also place Sumbandila in a sun-synchronous (on the sunny side of earth) polar orbit at an altitude of 500km.

The satellite in 2006 successfully completed a series of performance tests at the Institute for Satellite and Software Applications, at Grabouw, near Cape Town.

The facility, now in the hands of the Department of Communications, was in the 1980s known as Houwteq, part of apartheid SA’s space programme, which was central to a broader scheme to build a ballistic missile, tipped with a nuclear weapon.

Olivier says Sumbandila is all-South African, except for its batteries and solar panel substrate. He explains that, because the “power system went bonkers” on Sunsat, Sumbandila has a double dual redundant power system with space qualified battery cells.
“A lot of SA technology is riding on this satellite. We have tested it and every indication is that once it is up there it will work,” Olivier said.

The Engineering News and the Mail & Guardian (M&G) have reported the delays in launching Sumbandilasat relate to Russian unhappiness with former defence minister Mosiuoa Lekota cancelling a R1 billion Defence Intelligence order for a reconnaissance satellite.     
The Department of Defence`s latest Annual Report notes in its section on risk mitigation actions that the “collection environment is challenged by technological advances that require expensive solutions”, that funds “were made available by the National Treasury to alleviate the problem” but that the “project was stalled on the instruction of MOD” [Ministry of Defence].
African National Congress MP Pamela Daniels noted the matter in a meeting of the National Assembly`s Portfolio Committee on Defence on 19 November. Acting chairman Gerhard Koornhof said the matter would be discussed the next week at a closed session on defence readiness. The contents of that discussion, if it happened, are not in the public domain.    
The M&G has reported the contract was place by the Chief of Defence Intelligence, Lt Gen Moreti “Mojo” Motau. It adds it is “unclear why Lekota cancelled the contract. NPO Mashinostroyenia, the Russian state company from which Motau ordered the spy satellite, referred all queries to Lekota’s ministry.” The MoD declined to comment.
The M&G further noted that in “retrospect the signs that the SANDF wanted its own space capability had been there for some time.
“The intelligence chapter of the defence department’s 2003/04 annual report — Motau’s domain — warned that ‘worldwide developments in information technology, sufficient bandwidth, the availability of collection databases and space technologies” might require expenditure “beyond defence intelligence’s current budget allocation`.
“The 2004/05 annual report was more specific: ‘The collection capability of defence intelligence is being expanded continuously and needs further improvement at huge cost to stay abreast of new technological developments … [The] inflexibility of commercial satellites and bad weather limit the use of satellite reconnaissance over equatorial regions.`
“The SANDF’s expanding peacekeeping commitments in the Great Lakes region would also have been a strong motive for a better satellite-snooping capability than could be rented commercially. Enter the Russians.
“A source in contact with role players, speaking on condition of anonymity, said that the satellite built by NPO Mashinostroyenia was not only capable of high resolution photography — about six times as detailed as the civilian Sumbandilasat — but it also had the ability to ‘see through` clouds.
“Motau travelled to the Russian Federation to buy the satellite. The price tag, as hinted by the annual report, was astronomical. Including ground facilities and launch costs, the satellite could cost between US$150-million and US$300-million (between R2,2-billion and R2,4-billion). The expenditure is recurrent, as satellites have a lifespan of only a few years.
“The defence intelligence annual budget in 2004/5 was comparatively miniscule, at R140-million”.

The Treasury in February gave a slightly different figure, putting the 2004/5 Defence Intelligence budget at R196 million. It adds that expenditure is set to grow “at an average annual rate of 20.8%, from R196 million in 2004/05 to R608.5 million in 2010/11.

“The high average increase is due to the anticipated development and investment in a strategic collection capability for collecting intelligence information vested within the Operations Subprogramme.”
Science and Technology minister Mosibudi Mangena has previously argued SA needs its own proprietary satellites and cannot rely on commercial machines for imagery as they may not always be available and may not offer coverage of the area of interest. In addition, he warned that relying on satellites owned by others had national security implications – the operator and likely their national intelligence establishment would have insight into strategic South African government decision-making.     
MoD spokesman Sam Mkhwanazi this morning said government-to-government discussions were still ongoing and he could not comment further on the matter.