Eutelsat 5 West B Arrives DOA? Implications for Satellite Manufacturers and a Struggling Insurance Market


In late October 2019, Eutelsat announced that Eutelsat 5 West B experienced a potentially fatal anomaly with one of the satellite’s two solar panels. An ILS Proton rocket successfully deployed the satellite earlier in the month.

The satellite was slated to replace Eutelsat 5 West A, a satellite operating two years beyond its 15-year design life, and anticipated to run out of fuel by December. Eutelsat 5 West B is fully-insured for € 173 million, but deeming the satellite as a total loss would hit Eutelsat’s pocketbook nonetheless, forcing a reshuffling of its fleet to maintain/restore critical Ku-band broadcast coverage over Europe and North Africa (note: Eutelsat 5 West A contributed €30 M of revenues last year).

What’s more, Eutelsat 5 West B was designed to provide an overlay signal for the Galileo GNSS. The satellite hosts a payload that was expected to generate incremental revenues of approximately €7 million for a total of €102 million over the 5 West B’s 15-year lifespan.

During its earnings call, Eutelsat noted it needed to determine the primary cause for the solar panel issue, making sure, among other challenges, that the satellite’s remaining solar panel isn’t impacted. The company aims to determine the cause by the end of November 2019.

Looking beyond Eutelsat, the potential loss of Eutelsat 5 West B is likely to impact other industry players, including:  

• Northrop. This was Northrop’s first-ever sale of a GEOStar bus to Eutelsat. First introduced in July 2002, the GEOStar-2 has a fairly strong heritage, but this is now the third major anomaly of a satellite based on NG’s GEOStar-2 bus (out of 15 launched) since 2011.

• Teaming agreements. Eutelsat 5 West B represented the first-ever (at risk of being last-ever?) satellite teaming effort between Northrop (bus) and Airbus (payload). Such teaming agreements represent a small minority of the GEO satellite market (primarily Airbus/Thales), and there have been several instances where unfamiliar parties coming together for the first time has proven more challenging.

• The insurance market. Following a 15-year downward trend in space insurance pricing, the insurance market is now undoubtedly experiencing rate increases. These increases follow an unfortunate spate of losses (WorldView-4, FalconEye-1, ChinaSat-18, Intelsat 29e) that has caused the space insurance industry to lose money for the second consecutive year (first time since 2001).

• C-Band winner? Of the four primary US satellite builders, Lockheed is basically a non-player in the commercial market, Boeing is arguably in the doghouse (at least with Intelsat, due to the loss of Intelsat 29e), and this episode is likely a blemish to Northrop.

Assuming that the FCC approves a private auction of C-Band spectrum later this year, the spectrum holders have committed to purchasing eight (8) US-built replacement satellites. This confluence of events strengthens Maxar’s standing among large U.S. satellite manufacturers, making it a potential beneficiary of the 5 West B loss.