Orion's 1st satellite poised for launching

November 21, 1994|By Michael Dresser | Michael Dresser,Sun Staff Writer

There could be a second Orion in the heavens starting tomorrow night.

If all goes well with the launch scheduled for tomorrow morning at Cape Canaveral, the first satellite to be operated by Orion Network Systems of Rockville will slip into an equatorial niche just above the middle of the Atlantic Ocean.

Like its constellation namesake, the newcomer to space will be a hunter. In this case, however, its quarry will be market share that now belongs almost entirely to Comsat Corp., the Bethesda-based giant of the international satellite communications industry.

For Orion, it's been a long journey to its perch at 37.5 west longitude, from where it will command a view of the Earth stretching from Denver to the Ukraine.

The company was formed in 1982 by an international consortium of large aerospace companies, including Martin Marietta Corp., at a time when Comsat was still jealously guarding its monopoly on satellite communications between the United States and the world. Not until 1985 did Orion get a license from the Federal Communications Commission, and it took until 1993 for Orion to get into the business of reselling capacity on satellites operated by the international consortium Intelsat.

W. Neil Bauer, Orion's president and chief executive, said having its own "bird" on high will put the company in control of its own destiny, with stable costs and guaranteed availability of transponders to carry its signals.

The Orion 1 satellite was built by British Aerospace Ltd. and will be launched by Martin Marietta. Mr. Bauer said the cost of the satellite and launch would exceed $250 million.

With tomorrow's launch, Orion will join Connecticut-based PanAmSat as the only satellite communication companies to launch their own satellites to compete with Intelsat, whose largest owner and customer is Comsat.

Mr. Bauer said the Orion 1 satellite will serve parts of Brazil, Africa, the Middle East and Western Europe, but that Orion will make an especially aggressive push into the emerging East European market. He said the lack of reliable telecommunications infrastructure in the former Soviet bloc makes satellite communication attractive there.

Scott Chase, editor of Via Satellite magazine, said Orion has an ++ excellent opportunity to become one of the major players in a business that has room for relatively few competitors. "What they need to do is differentiate the service they provide."

Mr. Bauer said Orion is prepared to do that by offering "a true end-to-end service," including installation of equipment at sites on both sides of the Atlantic. For now, Comsat generally must hand off the signals it carries from the United States to the national Intelsat affiliate on the other end.

Orion 1 is only the first step toward global coverage, Mr. Bauer said. The company plans to launch a second satellite over the Atlantic in late 1997 or early 1998 and a Pacific satellite a few months later, he said. To extend the network's reach, Orion is looking at the possibility of direct communications between satellites -- a capacity he said Intelsat lacks.

Mr. Chase said PanAmSat's success bodes well for Orion's prospects. "There's a real demand in the marketplace for alternatives," he said.

Mr. Bauer, a former executive in General Electric's satellite communications business, said he has been surprised since becoming chief executive in March 1993 to find that the strongest interest in Orion's service was coming from Fortune 500 businesses. With the new satellite, Orion has been able to land a multiyear contract with RTL Television, Germany's leading private TV network.

Mr. Chase said Orion's ownership structure is one reason the company has been able to establish itself in a business that requires a massive capital investment before it sees significant revenues. Besides Martin Marietta, Orion investors include major aerospace companies in Britain, France, Italy, Japan and other countries, he said.

"This really is a prototype of how business will be done in the next century," Mr. Chase said. "They really have pioneered the idea of the global joint venture."

But that, too, is about to change. In June, Orion filed with the FCC to sell stock in a public offering expected to fetch $18-$20 a share.

Of course, that assumes the launch is successful. There's a small chance -- but a real one, as AT&T Corp. was reminded just this fall -- that something will go wrong, and the satellite will end up as that much more space trash.

Mr. Bauer, who will be on hand for the launch, admitted he'll be watching nervously.

"We have a lot riding on this, naturally," he said.

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