Boeing Sees Up to $2 Billion in U.S. Military Satellite Orders

Boeing Co. the second-largest U.S. satellite maker, said it expects at least $2 billion of orders for military communications satellites stemming from a Defense Department contract announced last week.

The U.S. Air Force said Aug. 19 that it awarded a $182 million contract to Boeing to buy parts for a Wideband Global Satcom satellite used for military communications. That may lead to orders for as many as six new satellites, Ken Torok, a vice president at Chicago-based Boeing’s Space and Intelligence Systems unit, said in a telephone interview.

Those would add to a 2007 contract for six of the Wideband satellites that are used by the U.S. Air Force, Army and Navy for tactical military communications and allow soldiers on the battlefield to access the Internet. The company has delivered three, and the Air Force is looking to order up to six more to replace older systems, Torok said.

“One Wideband has 10 times the capacity” of the Pentagon’s earlier Defense Satellite Communications satellites, Torok said. “The difference is like going from dial-up to broadband for your Internet.”

The satellites have a higher capacity than any other owned by the U.S. Defense Department, Boeing said in a statement today.

Boeing fell 91 cents, or 1.4 percent, to $63.69 at 1:29 p.m. in New York Stock Exchange composite trading. The stock had gained 19 percent this year before today.

TSAT Canceled

The Air Force is seeking more Wideband satellites after Defense Secretary Robert Gates canceled in 2009 a planned project, known as the Transformational Satellite Communications System, to build five satellites and ground stations for an estimated $11 billion, Torok said.

Boeing; Bethesda, Maryland-based Lockheed Martin Corp., the largest maker of U.S. satellites; and Northrop Grumman Corp. of Los Angeles were potential bidders for that project.

The Air Force’s order for Wideband satellites “signifies the high-priority need” for satellite-based communications systems, Air Force Colonel Don Robbins, commander of the Wideband Global Satcom services, said in Boeing’s statement.

The Wideband satellites have steerable signal beams that allow U.S. commanders to get around jammers, unlike commercial communications satellites also used by the military, Torok said.

Boeing’s contracts for commercial communications satellites include a $1.2 billion order for three announced on Aug. 6 by London-based Inmarsat Plc. Under that contract, Boeing also will lease some frequencies from the company and offer them to the U.S. military, the manufacturer said.

To contact the reporters on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net;

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email