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Technology Stocks : Loral Space & Communications -- Ignore unavailable to you. Want to Upgrade?


To: Jeff Vayda who wrote (5174)1/21/1999 10:24:00 AM
From: Jeff Vayda  Respond to of 10852
 
HONOLULU - Plans by Space Systems/Loral [LOR] (SS/L) to spend untold millions on the development of a 25 kilowatt satellite
will require larger launch vehicles and high demand regions of the world to make them cost-effective, industry sources said.

SS/L says its vision for the revolutionary model, appropriately named the "20.20," is to offer the lowest cost on a per-transponder
basis in the industry. Moreover, with its size and power, the spacecraft will be able to handle multi- region and digital processing
payloads for an unlimited range of applications.

"With this concentration of power and payload-carrying capacity, the 20.20 approaches the equivalent of two of today's satellites,
yet it occupies only one orbital slot, making full use of prime orbital locations to serve broader coverage areas," said Robert Berry,
SS/L president. "In addition, the customer avoids the cost of a second launch."

Only one rocket, the Ariane 5, is capable of lifting a satellite the size of the 20.20 satellite into geostationary transfer orbit (GEO),
but other major launchers have expressed interest in building larger rockets to accommodate the trend of increasingly large birds.

Questions also remain about whether the marketplace demands a satellite the size of the 20.20, but Loral officials expressed
confidence that birds of that magnitude would be needed by 2002 when initial deliveries are expected.

One major reason why Loral officials decided to begin developing the 20.20 is that history has shown that the size of commercial
satellites has doubled every five years for the past two or three decades, said Dan Collins, vice president of sales and marketing at
Space Systems/Loral. If that trend continues, the largest existing commercial satellites now in orbit that offer 10 kilowatts of
power will need to become twice as powerful, he added during a press briefing to introduce the plans at the Pacific
Telecommunications Conference here.

However, the size and power of satellites may reach a point of outstripping marketplace demand in the coming years several
satellite industry sources said. Although the 20.20 will be designed for higher power, greater payload capacity, longer life and
faster time-to-orbit, industry officials were not sure the higher price of the bird could be justified by most potential buyers.

Space Systems/Loral officials said the 20.20's 150 onboard transponders will offer the lowest cost on a per-transponder basis in
the industry, but they declined to identify the price they planned to charge for the bird. The cost of developing the bird will top tens
of millions of dollars and fall short of a billion dollars, Collins said. The company began incurring those development costs last year,
he added.

A key advantage of the 20.20's design will include a size that is about two-and-a-half times larger than today's commercial
satellites and accommodate larger communications equipment for the higher bit rates needed to offer next-generation services,
such as broadband Internet capability, Collins said. The advanced communications equipment will provide the bird's potential
customers with better frequency use, improved regional and beam performance and larger areas of coverage, he added.

Another plus of the 20.20's design is that it would be produced as a modular satellite, which will allow sections of the bird to be
built separately, then shipped to a central production facility for final integration. That approach will substantially save production
costs and follows a trend that already has emerged in home construction and automobile assembly.

Space Systems/Loral already manufactures the 10-kilowatt 1300 model satellite and will use many components and designs that
already have been proven to be successful in the proposed 20.20 model satellite, Collins said.

The threat of the 20.20 producing too much heat during its operation will be mitigated by improvements in dissipating heat, Collins
said. Additionally, the bird will have larger and more efficient power-generating solar arrays, better power-control and delivery
units, improved batteries, fuel-efficient ion propulsion thrusters for stationkeeping and advanced command and control systems to
provide a extended life than the 1300 model, he added.

"The body of the 20.20 is more than twice the size of our current 1300 model's body," Collins said.

The first customer for the 20.20 is expected to be SS/L's sister company, Loral Skynet, company sources said. One or two 20.20
satellites are expected to be ready for delivery by 2002, and the bird ultimately should be able to be built well within two years of
any orders from satellite operators, Collins said.

"The satellite is intended for those who need a lot of capacity with a very large bandwidth," Collins said. Customers will be able to
provide services to larger regions and offer up to 200 spot beams across a wide area.

The 20.20 satellite could be especially useful for direct broadcast satellite (DBS) services in providing local channels and allowing
the use of yet smaller satellite dishes due to the bird's higher power. Dish sizes for high-power DBS could fall from the 18-inch
versions of today to 10 inches or less, Collins said.

The 20.20 also will follow the planned rollout of the Hughes Space and Communications [GMH]-built HS 702 model satellites that
are expected to offer 15 kilowatts of power. A number of HS 702's are on order and are slated for delivery and launch soon.
Loral also can configure its 1300 model birds to offer up to 14-to-17 kilowatts of power, but customers typically have not needed a
satellite of that capability up to now, industry sources said.

Lockheed Martin Corp. [LMT], another major U.S.-based satellite manufacturer, has considered building a more powerful satellite
between 10 and 20 kilowatts, but company officials declined to discuss their intentions when contacted for comment.

Arianespace Inc. officials said the company's newly certified Ariane 5 rocket is the only commercial booster in the industry that
has the five-meter fairing needed to fit the 20.20 into the booster's payload compartment. Boeing Co. [BA] and Lockheed Martin
are expected to develop enhanced rockets with five-meter fairings by the time the 20.20 is ready for launch, launch industry
officials said. Boeing's rocket would be the Delta IV, while Lockheed Martin is developing an Atlas 5 that would be able to handle
the 20.20 or similarly sized birds.

Marie-Vincente Pasdeloup, director of communications for Arianespace, said her company's exclusive focus on commercial
launches since it was created in 1980 allows it to stay closely attuned to the needs of the industry and prepare for changes, such
as the need to carry ever larger satellites into space.

"It's no surprise that commercial foresight is built into our plans, operational structure and strategies, Pasdeloup said. "Anticipating
market demand is the name of the game."

(Phillips Telecom)



To: Jeff Vayda who wrote (5174)1/21/1999 10:29:00 AM
From: Jeff Vayda  Read Replies (1) | Respond to of 10852
 
(OT) Lots of money to be made if Pan Am Sat can make money last year.

(Phillips Telecom)
PanAmSat Reports 1998 Fourth Quarter and Year End
Financial Results

PanAmSat Corp. [SPOT] shrugged off a problematic year in its space segment to report strong growth for the fourth quarter and
year ended Dec. 31.

Despite the total loss of two satellites (Galaxy IV and Galaxy X) and the anomalies that hit others (PAS-4, PAS-5, PAS-8, Galaxy
7 and Galaxy 8I), the company's total revenues for 1998 increased to $767.3 million, compared to revenues of $756 million for
1997. The increase was attributed to higher operating lease revenues in 1998, partially offset by a decrease in sales and sales-type
lease revenue. Total sales-type lease revenues were $30.6 million for 1998, compared to $71.3 million in 1997. Operating lease
revenues for 1998 increased by 8 percent to $736.6 million because the company rolled out commercial service on two new
satellites, PAS-5 and Galaxy 8-I. The birds were launched in the latter part of 1997 and generated a full year of operating lease
revenues in 1998. Lease revenues were $684.7 million in 1997.

But PanAmSat's growth in 1998 might have been more robust. It was limited by several factors, including the loss of the Galaxy X
satellite during a launch failure in August 1998 and the reduced usable capacity of the PAS-6 satellite. Operating lease revenues
reflect long-term satellite service agreements from which PanAmSat derives revenues over the duration of the contract.

Earnings before net interest expense, income taxes, depreciation and amortization (EBITDA) was $553.3 million, or 72.1 percent
of total revenues, for the twelve months ended Dec. 31, 1998, compared to EBITDA of $543.5 million, or 71.9 percent of total
revenues, for the same period in 1997. The increase reflects lower sales costs and lower leaseback expenses, partially offset by
increased operating expenses associated with the normal growth of the company's operations.

As of Dec. 31, PanAmSat had long-term contracts for satellite services representing future payments of about $6.3 billion.
(Mitchell Burd, PanAmSat, 203/622-6664.)