Building A Better Satellite

Boeing Co. will start making a new satellite that will be cheaper, lighter and more flexible than its top-of-the line model, the company said Thursday.

The new satellite line could be ready in two years and prove a trendsetter in the industry, as well as pulling up the bottom line for Boeing's sagging commercial market.

The new model will be built much like the company's best-selling 601 satellite, a workhorse that has provided services for DirecTV and other telecommunications.

However, the new model will carry the more powerful propulsion system and electronics of the larger 702 satellite, said Boeing spokesman George Torres.

"We're taking the best of two great satellites and coming up with a hybrid design," he said.

Boeing is the world's largest satellite manufacturer. It doesn't divulge its satellite business revenues, but analysts believe overall commercial and military sales were around $3 billion last year.

The 601 satellite sells for about $100 million while the 702 goes for about $200 million, analysts say. Torres said the new satellites would cost somewhere between the prices of the two older satellites. He declined comment on how much the other models fetch.

The most important feature of the new satellite is the ability to reconfigure it in space, Torres said.

Current satellites are dedicated for one task, such as beaming data or TV signals to single regions, such as North America. Satellites typically stay in orbit for up to 15 years in orbit.

The new satellite will be able to adjust its payload to handle Internet, radio, telephone or other signals, Torres said, and could shift the signal to different regions of the globe as needed.

An improved solar panel array will provide power to the satellites. Boeing warned last year that the 702's solar arrays could degrade more quickly than expected, reducing power.

SES Americom, the world's largest satellite fleet operator, expressed interest in the new satellite and said Boeing could receive orders for hundreds of millions of dollars in the 2004-2005 fiscal year.

Monica Morgan, spokeswoman for the Princeton, Calif.-based SES Americom, said the concept of reconfiguring satellites in space is intriguing.

"It would be great differentiator if they were able to pull it off," she said.

SES Americom is the U.S. unit of SES Global SA of Luxembourg, which has 42 satellites in orbit with eight more being built for its use.

But Morgan said SES Global wants to make sure the new Boeing technology is reliable.

"We're like the car buyer. We're not going to buy the first-year model. These things are very expensive ... and they have to last a long time."

Over the last year, Boeing announced 1,400 job cuts from its southern California satellite manufacturing division.

The division's work force could increase somewhat as Boeing develops the new satellite, but the number of jobs is hard to predict because actual satellite assembly is still several years away, said Paul Nisbet, an aerospace industry analyst with JSA Research.