Soviet Union competitor for satellite contracts

Press, 29 June 1987, Page 29

Soviet Union competitor for satellite contracts

By

JULIE VORMAN

NZPA-Reuter Houston The Soviet Union, capitalising on setbacks in the United States and European space programmes, has become a stiff competitor for contracts to launch Western commercial satellites, an official of the European missile programme has said.

The Soviet space program launches an average of two rockets a week and has been talking to a Houston firm representing American companies anxious to get commercial satellites into orbit, space industry officials told reporters at a symposium. “There is no question we are worried about them,” Douglas Heydon, president of the American marketing subsidiary of

the Arianespace consortium, said of recent Soviet negotiations with American companies about launching commercial satellite payloads.

He said that Arianespace, which suspended launches last May after a missile had to be destroyed in flight, will resume launches in August.

“Our concern is whether the Soviets will be competing on a mar-ket-based price and we do not think they will,” Mr Heydon added. Arthur Dula, the founder of Space Commerce Corporation, which serves as a go-between for satellite companies and the Soviet Glavcosmos programme, said the Soviet Union would eagerly undercut Ari-

anespace to get business and earn hard currency.

“For example, if Ariane says it costs SUSBO million to launch, we will be at least SUS2O million under that,” Mr Dula said. “The Soviets seem quite eager to learn how to be capitalistic and open."

The Soviet Union has said it will have space on its Proton rockets in the fourth quarter of 1988, but has not yet formally agreed to launch any Western payloads. Meanwhile, there is a growing backlog of unlaunched satellites because of the groundings of the Ariane rockets and the hiatus in United States launches.

The Reagan Administration has barred commercial payloads from the American shuttle pro-

gramme which has been in limbo since the fatal Challenger explosion 18 months ago. The United States has no rockets for the unmanned launch of satellites.

Mr Heydon said a big problem for Arianespace is the continued low valuation of the dollar against European' currencies. In 1985, when the dollar peaked against the French franc, a rocket launch cost a satellite customer about SUS 23 million, Mr Heydon said. Today, the same service would cost SUS 42 million. “Western companies want to stay with launch facilities they know but if the price differential becomes too great, they cannot afford to do that,” Mr Heydon said. Arianespace has orders for 44 satellite launches

totalling $U52.35 billion.