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Hong Kong Satellite Technology Group (HKSTG)

On 17 January 2002 Hong Kong Satellite Technology Group (HKSTG) and Israel Aircraft Industries Ltd. (IAI) signed a contract for seven commercial communication satellites. The ceremony took place in the Great Hall in Beijing. The deal may reach as high as $1.0 billion.

HKSTG was formed in 2001 by a group of private Hong Kong investors. Partners in the venture include the China Aerospace Ltd. Science and Technology Group Corporation (CASC), Sino Satellite Communications Company Limited (Sinosat) and Israel Aircraft Industries (IAI).

The relevant parties agreed to complete production and launch of "Hong Kong No. 1" within 34 months of signing and have the second satellite in the series ready for services in another 18 months. Israel Aircraft Industries would provide the technology know-how for the satellite production. The two satellites would be launched at the Xichang Satellite Launch Center in China on the "LM series launch vehicle".

"Hong Kong No. 1"and "Hong Kong No. 2" formed part of the initial stage of satellite-based network construction by Hong Kong Satellite Technology Group. The company also planned to build a Hong Kong-based ground satellite control center, bringing itself closer to the goal of establishing a satellite-based network covering China and other parts of Asia.

HKSTG would provide communication services, particularly direct-to-home television services for the rapidly growing Asian market. The demand for HKSTG's Communication services is expected to intensify due to the retirement of other communication satellites that are currently in service. In addition, the new satellites would be used to support the 2008 Olympic games, which would be held in Beijing.

The Hong Kong Satellite Technology Group Ltd. would be in management, production and distribution of AMOS-HP/DFH-2000 medium-capacity commercial satellite series. Each satellite in the HKSAT series included 20 Ku band transponders designed to provide a 12-year service life. With 5500 Watts of power, the HKSAT series was designed as the ideal satellite constellation for providing direct TV broadcasting, digital communications, multi-media, Internet and other communication services. The contract allows HKSTG to purchase two HKSAT satellites from IAI's MBT Division, who is the prime contractor for the manufacture of the satellites. HKSAT satellites are based on IAI's successful AMOS series of communication satellites previously manufactured in Israel. Sinosat would provide ground service.

CASC would be used to launch the HKSAT satellites from the Xi Chang satellite Launch Center. The first satellite HKSAT-1 was scheduled to be launched in 2004, with the second satellite launched 18 months later in 2006. If the two are successful, another eight communications satellites will follow suit within six years to form a "sky network" of HKSAT series, and "bring knowledge to people," said David Chu, chairman of the Hong Kong Satellite Technology Holdings Ltd. , also a member of the Legislative Council of the Hong Kong Special Administrative Region.

Touting the co-operative project as the "largest commercial collaboration" between the mainland and Hong Kong, Chu claimed the new satellites will benefit every Chinese - and the Asia-Pacific region at large - by providing digital communications, remote learning and broadband Internet access. "For one thing, the Direct-to-Home TV, which is not available in Hong Kong but is in almost every part of developed countries, will soon be ready for every Hong Kong resident when the satellites are operational," he said.

The group will invest US$350 million for the initial two satellites, Zhang said. But Chu estimated each of the satellites will cost US$200 million. "We are a majority shareholder, holding 70 per cent of the group's shares," Chu said. "If the government is a major shareholder, inevitably there will be a lot of bureaucracy. We can operate much more commercially and efficiently."

The contracts were cancelled in January 2003. The potential $500-million Israel Aircraft Industries Corp. (IAI) communications satellite deal with a Chinese commercial venture Hong Kong Satellite Technology Group, set up with help of the Chinese government, collapsed because the Hong Kong, China investors involved with the project could not come up with the promised funding, Moshe Keret, IAI president and CEO, said at the Paris air show in June 2003. The project was to involve the procurement of two IAI Amos communications spacecraft for about $180 million with options for several additional satellites, bringing the total endeavor to about $500 million over 10 years. The broadcast of the 2008 Olympics from Beijing, China had been a key driver in the project as was the formation of a new Chinese direct-to-home television broadcast system across Asia.

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Page last modified: 25-12-2013 17:57:22 ZULU