The strategic importance of ESA R

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The strategic importance of ESA RD Programmes

• Dirk Breynaert, CEO
• NEWTEC
• VRI President
• 27th October 2005

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VRI (1)

• VRI (Vlaamse Ruimtevaartindustriëlen) groups 27
  Flemish companies, research centres and
  educational institutions involved in the
  aerospace field
• VRI members investment (made in technology
  development in the space sector) has a direct
  impact on the added value and employment in
  Belgium
• The association represents its members in
  cooperation with the Belgian and Flemish
  Authorities and sets up actions to enhance the
  space industry image in Belgium
• VRI celebrates its 10th anniversary

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VRI (2)

• VRI members have in common to support
   alternative  space strategies 
• VRI members are mostly supported  alternative
  ESA programmes 
• VRI is therefore wishing ESA and Belgian
  authorities to give the highest priority to these
  programmes
• As a consequence, in view of the forecoming ESA
  Council at Ministerial level, VRI decided to
  organize a workshop on the subject

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VRI members
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Alternative companies represent 95 of the
market
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Alternative space companies (1)

• Alternative space companies are those focusing
  their strategy on
• The provision of products or services for
  commercial satellite applications (1st category)
• Companies exclusively active in the 3 lower
  segments of the value chain value-added
  services, ground equipment, lease of satellite
  capacity
• OR
• The integration of small space missions or
  scientific instruments (2nd category)
• Companies offering solutions for smart space
  missions
• Newtec and Tellitec are belonging to 1st category

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Alternative space companies (2)
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Newtec - Profile

• Newtec is a leading satellite solutions and
  equipment provider for
• Internet-IP Access network
• Television Radio Exchange Networks
• Broadcast TV Uplink Stations and Downlink
  stations
• Television Distribution Networks
• Interactive Television
• Unconsolidated sales of 70 Million in 2005
• 200 highly qualified people employed

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Newtec - Major milestones

• 1985 NEWTEC Cy founded
• 1994 Start development of Newtec-defined
  products
• 1997 NEWTEC AMERICA founded
• 2001 NEWTEC ASIA PACIFIC founded in Singapore
• 2002 Take-over of SKYWARE from Philips in
  Germany and TEAMTEC from Cable-Print in Belgium
• 2004 Creation of a SANGINE , Joint Venture
  company with Aramiska in Belgium
• 2005 Creation of a NEWTEC DIAMOND SATELLITE
  COMMUNICATIONS, Joint Venture company with
  Diamond electronics in China and Newtec_MENA in
  Dubai

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Newtec Strategic move

• Newtec was created in 1985 with the objective to
  provide cost-effective equipment to ESA
• Such equipment, responding to ESA specifications,
  was fully (100) funded

• When European telecom market got liberalised in
  1994, Newtec decided
• to target the commercial market
• to become responsible for defining its own product

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Newtec Turnover evolution (1)
Up to 1994, Newtec turnover was 100 coming from
ESA
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Newtec Turnover evolution (2)
From 1997, commercial turnover started to grow
significantly
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Newtec Relations with ESA

• Before 1994, ESA was the privileged customer of
  Newtec
• After 1994, Newtec decided to apply exlusively
  for support from industrial RD programmes
• ARTES-4 is 50 co-funded by industry
• From a  customer , ESA became the  catalyst 
  of Newtec entrepreneurship
• 10 years later
• gt 90 of Newtec turnover is commercial
• lt 10 is coming from ESA
• Newtec has a worldwide market presence

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Leverage effect

• Thanks to their leverage effect, industrial RD
  programmes are the best tools to maximise
  economic return from public investments

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Tellitec Profile (1)

• Tellitec (Berlin) is an SME focused on the
  development of software for 1-way and 2-way
  satellite communication systems including
  DVB-RCS applications are (e.g.)
• Protocoll enhancements and replacements for
  TCP/IP including HTTP-Prefetching and
  SMB-Enhancement
• IP Multicast content delivery solutions
• IP Traffic shaping, compression, and encryption
  systems
• Tellitecs turnover in 2004 was 2.3 Million EUR
• Since its inception in 2004 Tellitec has become a
  prominent software supplier for the European and
  world-wide satellite industry

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Tellitec Profile (2)

• A well known suite of off-the-shelf software
  products
• Tellitec has large operational projects in
  Europe, Australia, Africa, the Middle-East, and
  the Americas
• Strong experiance in B-2-B (e.g. DVB-RCS,
  DigitalSignage, and D-Cinema) and B-2-C (e.g.
  1-way satellite Internet services) projects
• Strong position in standardization of DVB-RCS
  (air) interfaces to foster future cross-vendor
  interoperability

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Tellitec Relations with ESA

• Tellitecs commercial activities have been
  supplemented over the past two years by
  involvement in various ESA ARTES projects.
• This lead to successful customer- and
  use-case-centered product enhancements oriented
  towards the cutting edge of the market.
• The participation within ESA ARTES projects also
  lead to further fruitful co-operations with other
  European companies involved in the satellite
  communication business.

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Alternative ESA programmes (1)

• From an SME perspective, ESA programmes can be
  classified in
• Institutional programmes, for the implementation
  of ESA missions
• large missions (GALILEO, GMES)
• small missions (PRODEX)
• Industrial RD Programmes, for supporting
  companies in the development of their own
  products
• ARTES

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Alternative ESA programmes (2)

• Alternative ESA programmes are defined as the
  ones offering to industry the opportunity to
  develop alternative strategies
• Industrial RD programmes
• AND
• Small institutional programmes
• Newtec and Tellitec are exlusively concerned by
  Industrial RD programmes

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Alternative ESA programmes (3)
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Importance of industrial RD Programmes

• The commercial success of Newtec and Tellitec is
  the result of their focus on industry-driven RD
  (ARTES) which allowed the companies
• to define their own products according to their
  own strategy
• to focus on their customers requirements (a
  clients)
• to define their own RD activities
• Efficiency of ARTES-4 is mostly the result of
  industry financial commitment (50 co-funding)
• Programmes such as ARTES deserve the highest
  priority from ESA

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ARTES budget (1)

• Within European Space Policy, satellite
  communication is considered as one of the 5
  priority areas of action
• See EU  White Paper   Bridging the digital
  Divide 
• However, ESA satellite communication budgets
  (ARTES) proposed by ESA are decreasing

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ARTES budget (2)Yearly budget proposed to Council
Total ARTES budget proposed (Berlin) is 1135 M
on 4 years incl. 250 M for ARTES-4 and 235 M
for ARTES-3
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ARTES budget (3)

• Furthermore, within ARTES, an increasing priority
  is given to large institutional programmes
  (Alphasat, ARTES 8  Large Mission )
• This is done at the detriment of Industrial RD
  programmes (Artes 3, 4 5)
• Newtec is therefore recommending
• ESA to give a higher priority to ARTES RD
  Elements, in particular those which are close to
  the market (ARTES-3 4)
• ESA Member States to subscribe in priority to
  these Elements

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ESA role and priorities (1)

• ESA should break away from seeing big
  institutional programmes as the only solution
• ESA should rather give the priority to
  alternative programmes (such as RD programmes).
• As a consequence
• ESA impact on industry turnover, employments and
  competitiveness would drastically increase
• ESA would have to accept to act also as a
  catalyst (as it is already the case in Artes)
  instead of just a customer

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ESA role and priorities (2)

• ESA acting as a catalyst means also
• Encouraging all actors of the industrial value
  chain to cooperate (e.g. within pilot projects)
• Making a bridge between terrestrial telecom and
  satellite telecom actors
• for example by encouraging the later to adapt
  existing terrestrial telecom standards, as it is
  has been initiated for the use of TMN standard
  (for network management) within SATLABS

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ESA procedures

• Present ESA procedures (tenders, evaluations,
  contracts) are presently optimised for 100
  funded procurements, and not for industrial RD
• Especially for co-funded RD activities - with
  50 financial contribution from industry - ESA
  should establish lighter procedures
• Procedures for (100 funded) small Work Orders
  should also be simplified

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Importance of an active role of national
authorities

• Lack of ESA focus on industrial RD programmes
  such as ARTES is a great problem, especially for
  a small country
• Belgium does not benefit from a national space
  programme to support their SMEs
• In the present circumstances, an active role of
  the Belgian authorities to support such
  programmes in ESA Delegates Bodies is becoming
  more and more important

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CONCLUSION

• In view of the ESA Ministerial Conference in
  December 2005, European authorities are asked to
• strengthen their policy in favour of RD
  programmes in ESA Delegate Bodies
• allocate a large part of their space budget to
  ESA industrial RD Programmes
• Newtec and Tellitec strongly encourage
  alternative space companies from all ESA Member
  States to send a similar message to their own
  National Delegation