2010 Speeches
Craig R Cooning

Craig R. Cooning

Vice President, General Manager

Boeing Space and Intelligence Systems

Chairman and CEO

Boeing Satellite Systems, International

"Boeing's Strategy for the 702 Satellite and Hosted Payloads"

Euroconsult's "World Satellite Business Week"

Paris, France

September 08, 2010

Good afternoon and welcome.

On behalf of Boeing Satellite Systems International, it's a pleasure to welcome all of you to today's luncheon.

I am back for a second year as your host, and it's great to see so many friends and colleagues here today.

When I addressed you last year at this luncheon, my theme was, "We're back."

This year I will tell you: "We're here to stay!"

And I hope that all of you are as optimistic about the future as we are, for although the world economy is still unstable, there seems to be many opportunities in the satellite industry to grow and prosper.

The video you just watched is a nostalgic look at the way it used to be.

It's intentionally humorous in places, but I hope that you saw that satellite technology really has changed our lives for the better.

And, most importantly, satellite services are here to stay.

2010 has been a successful year for the satellite industry.

9 satellites have been launched thus far, and 15 satellites have been ordered.

And clearly there are more launches scheduled and more contracts being negotiated.

It's far from the late 1990s when the commercial satellite industry was booming. . . but it's still a good sign that satellites continue to be among the world's most desirable assets when it comes to communications.

We see it:

In weather reports on the nightly news;

In cellular phone service and blackberry use

When people are on the move but still require access to information on the Internet

When people need directions showing them how to get from here to there

Or when someone lost needs to be found. . .

And we see it during the most tragic of times, such as the devastating earthquake in Haiti, when live news coverage via satellite helped to mobilize the world to immediately begin relief efforts

In weather reports on the nightly news;

In cellular phone service and Blackberry use;

When people are on the move but still require access to information on the Internet

When people need directions showing them how to get from here to there

And we see it during the most tragic of times, such as the devastating earthquake in Haiti, when live news coverage via satellite helped to mobilize the world to immediately begin relief efforts.

The hunger for information is far from being satisfied.

And we all know that satellites play a critical role in the delivery of this critical information.

But let's not forget our men and women in uniform.

Because just as each of us is now accustomed to information, 24/7, no matter where you are in the world, it unfortunately is not always true for our men and women in uniform.

Yet they need and deserve the same level of communications support.

But there's an issue, and it's a shortage of communications bandwidth to support the military.

Today, approximately 80 percent of the communications services in use by the military are leased from commercial satellites.

And . . . the military has forecasted that their ongoing need for communications support from commercially available space systems will triple during this decade.

As many countries continue to tighten their belts in defense spending, programs that could help to meet the needs of the military are being delayed, or cancelled entirely.

The result is that there's a lag in providing these important communication services, and up until recently, the only options were:

Begin work on a new military communications system, knowing it may take 10 years to enter service;

OR

Deliberately decide to do without the capability, and cancel any plans for starting the program. . . which for anyone who has family or friends in any branch of the military, seems like a catastrophic option

Today we know that there's a third option:

Lease communications services from commercial owner/operators.

The benefits of relying on the commercial industry for some of these services are many.

First, the commercial industry operates with velocity, and by that I mean that they can generally expect to sell services on a satellite within about 3 years of placing the order.

That's about 1/3 of the time it would take to get a military satellite into service.

Second, by partnering with the commercial industry, the military benefits from newest technologies, already proven and in-use on commercial spacecraft

And third, this arrangement is mutually beneficial, because it opens up a new revenue stream for commercial operators, while helping the military to meet its communications demands.

At Boeing, we've been leveraging our experience in ka-band satellites as one way to help our commercial customers access the military communications market.

In July of 2009 we announced a four-satellite contract with Intelsat, which included a UHF hosted payload that Intelsat will lease to the Australian Defence Force.

Last month, Intelsat ordered a second UHF payload.

And we also recently announced a three-satellite contract with Inmarsat. This contract also includes a hosted payload, this one with ka-band service.

Every indication is that, while the world economy continues to be slow, the commercial satellite industry continues to prosper.

Our philosophy is one of diversity.

Diversity in markets served, diversity in technology, and diversity in product.

That's why we introduced the Boeing 702 MP --- for "medium power" -- last year.

We listened to our customers and invested four years of research that enabled us to introduce a highly affordable, technically competitive, flexible satellite.

The 702MP enabled us to reach out to an important market segment that we'd been overlooking: the market for fixed and broadcast satellite services.

Add to this the investments we made in our powerhouse 702, now known as the 702 HP for "high power," and we have two flight-proven, highly capable satellite designs that can be tailored to meet the needs of nearly any customer in the military, intelligence or commercial markets.

The strategy must be sound, but timing is often the indicator of success.

We have the right products at the right time, and as we continue to develop relationships with customers new and old, we are committed to the continuing evolution of our 702 satellite line.

The world is a different place today.

Our parents would find it difficult to fathom the instant, 24/7 communications capabilities we have today.

And our children cannot fathom life without it.

It's a great time to be a member of the satellite industry, and I believe that we collectively stand on the cusp of some really innovative and compelling changes that will make our world a better place.

Again, it's a pleasure to serve as your host today.

Thank you.