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Israel's Space Plan Exploded With SpaceX Rocket. Now What?

Israel's Space Plan Exploded With SpaceX Rocket. Now What?

By Yaacov Benmeleh, Bloomberg | Updated: 6 September 2016 12:15 IST

A large question mark looms over Israel's space industry after its prized Amos-6 satellite blew up in last week's failed SpaceX rocket launch.

Space Communication Ltd., the Israeli company that was to operate the Amos-6, is still picking up the pieces and deciding what to do next. The government will formulate a long-term national space program, and may help develop a communications satellite, the Science Ministry said late Sunday after an emergency meeting with representatives of the country's space industries.

The September 1 accident in Cape Canaveral, Florida was the biggest blow to Israel's space program since the death of astronaut Col. Ilan Ramon in the Space Shuttle Columbia disaster in 2003.

The setback imperils Space Com's deal with China's Beijing Xinwei Group for control of the company, but presents an opportunity for Israel Aerospace Industries Ltd., the state-owned weapons manufacturer that built Amos-6. Prime Minister Benjamin Netanyahu can allot some of the estimated $300 million (roughly Rs. 1,996 crores) to pay IAI to build another satellite for Space Com, its sole client for such products, but first must decide if satellites are an industry of national strategic importance.

"This is a traumatic experience for the industry, but allows us to hold this discussion that should have happened 10-15 years ago," Yossi Weiss, IAI's chief executive officer, said Sunday.

Much like the majority of Israel's high-tech sector, its space program is an offshoot of military operations, according to Meidad Pariente, who started his 20-year career in the space industry at IAI and worked on the first Amos satellites.

Due to the army's secretive nature, little effort was made by the government to encourage the commercial potential of satellites, even after IAI began developing Amos satellites many years ago, he said.

"There's no space policy that says what the vision is, or what market share Israel wants to capture," said Meidad, now the chief technology officer of Sky And Space Global Ltd., a U.K.-based company that deploys nano-satellites to provide global communication infrastructure. "Every beeper used by the defense ministry, the army, the ambulances, relies on satellites. What if the Chinese one day decide to shut down business in Israel?"

(Also see: When a Commercial Rocket Blows Up, Who Pays?)

IAI's Weiss said the government needs to invest as much as $50 million per year if it wants to bolster Israel's competitiveness against global space companies. IAI could offer prices comparable to its American and European counterparts if the government shared the costs of development, he said.

"The government decided that the gas industry was a strategic asset," Pariente said. "So it should be with satellites."

The government could push to build a new satellite and maintain the independence of Israel's space industry, according to Tal Inbar, head of the space and UAV research center at the Fisher Institute for Air and Space Strategic Studies, based in Herzliya, Israel.

Keeping the country's space industry in-house shields it from pro-Palestinian activists who apply political pressure on foreign companies to stop doing business with Israel, Inbar said. Satellites also serve as backup for Israel's communications infrastructure in the event of war or technical malfunction, he added.

"There's a synergy in the triangle between Space Com, its biggest client, and its supplier, in that they're all Israeli companies," Inbar said in an interview. "They understand each other and would be responsive to each other, so that they could amend issues in the satellite, if need be, in no time."

Space Com said in a statement Sunday that it's owed $294 million in compensation after the accident. The company said it's talking to Xinwei about ways to amend the sale accord. Reached by phone Monday, a spokesman for the Chinese company said he couldn't immediately comment.

Shares of Space Com, which plunged Sunday to their lowest level in a decade, rebounded 3.3 percent to 27.16 shekels as of 1:36 p.m. Monday in Tel Aviv.

Space Com CEO David Pollack said on a conference call Sunday that the company is looking for an alternative satellite provider and would be able to launch a new satellite in about two years. An accord with Facebook to use the Amos-6 to provide Internet connectivity in sub-Saharan Africa has been cancelled, but the company will still be able to meet its financial commitments, he said.

Pollack said Space Com has three immediate options:

- Buy a satellite already in orbit and re-position it

- Buy a satellite on the ground

- Order a new satellite

Each avenue has its pitfalls. Purchasing a satellite already in space would be fastest but comes with a shorter lifespan, Inbar said. Existing satellites wouldn't be customized to the needs of Amos-6's clients, which included the country's defense ministry and its largest telecommunications company.

Launching a new satellite would take about 18 months if Space Com ordered one through firms such as Boeing Co. or Lockheed Martin Corp., Inbar said. It would take IAI about three years to build a new one, "a very long time relative to other industries in the world," he said.

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