NewSat offers to acquire NBN Co’s two under-construction satellites

19 Mar 2014

Satellite operator NewSat is said to have made an offer to acquire the two Ka-band satellites being constructed for NBN Co, the company overseeing the construction and management of Australia’s National Broadband Network (NBN). According to ZDNet Australia, NewSat has proposed leasing capacity back to NBN Co for regional services, should it purchase the satellites, which are currently under construction in the United States with Loral, and are due to be launched in 2015 with a view to bringing broadband services to the 3% of premises outside of the NBN’s fibre and fixed-wireless network footprint.

It is understood that the offer to buy the satellites was actually made in December last year, with the report citing a submission made by NewSat to the government’s broadband cost-benefit analysis panel. In this document NewSat founder Adrian Ballantine said: ‘The NewSat proposal envisages the NBN Co paying a fee for the wholesale service for the life of the satellites, plus one renewal. The fee must be guaranteed and must enable the purchaser to service debt and return a profit on the service in order for the business case to be sustainable.’ Further, the executive argued that its purchase of the satellites would allow NBN Co to reduce its subsidisation of the satellite service, with the submission adding: ‘NewSat contends that privatisation will benefit the NBN Co by dramatically reducing debt and de-risking the provision of the service by introducing an experienced, efficient, quality service provider. It is anticipated that this would also result in a significant reduction in staffing required by NBN Co.’

Australia, NBN Co, NewSat