Optus Satellite signs AU$40m Department of Defence contract extension

The Department of Defence has extended its satellite partnership with Optus, with the deal worth around AU$40 million to extend the life of the C1 satellite out to 2027.

optus-satellite-c1-defence.jpg
(Image: Optus)

The Australian Department of Defence has announced extending its satellite communications partnership with Optus for the next 10 years for AU$40 million, involving a reconfiguration of the C1 satellite.

The deal will also necessitate the upgrade of ground infrastructure at Optus' facilities in Belrose, New South Wales, and Lockridge, Western Australia, with Optus to continue operating and maintaining the satellite and its services.

"Optus will reconfigure the C1 satellite to operate in an inclined orbit to reduce on‑board fuel usage and extend the life of the satellite as far as 2027," Defence Minister Marise Payne said.

"The existing agreement with Optus was due to expire in 2020, coinciding with the satellite's anticipated end-of-life."

The deal also comes with the option to "preserve Australia's orbital filing precedence within the region" and add future satellite capabilities, Payne added, and to support other federal government agencies and international partners.

"The agreement assists Defence and the government to preserve Australia's right to continue to operate in the radio-frequency spectrum from space until such a time as Government elects an alternative course of action," Payne said.

Optus has been providing satellite communication services for Defence through the C1 satellite since 2003, with the contract last extended in July 2015 for an undisclosed amount.

"Optus Satellite has enjoyed a long and collaborative relationship with the Department of Defence, and we are pleased to reaffirm our relationship through the consistent delivery of quality service outcomes for the department," Optus Satellite VP Paul Sheridan said.

"Our relationship is built on our deep experience and flexibility to support Defence's satellite communications needs, and through this relationship we will continue to assist Defence's strategic goals across the Asia-Pacific region."

The Department of Defence and Optus had initially collaborated to fund, build, and launch the C1 satellite back in 2003, with Optus making use of the Ku-band and Defence making use of its Ka-band, UHF, and X-band frequencies for coverage across the APAC region.

Although Optus had briefly considered selling off its satellite division in 2013, it then extended the satellite's services to 2018 by signing a AU$19.5 million contract renewal with Defence in 2014.

Optus' satellite division owns the highest number of satellites covering Australia and New Zealand, with five satellites in orbit providing coverage to the region.

It also provides wholesale satellite services for various private companies and services, including for Virgin Australia's in-flight Wi-Fi service; developer and operator Aeeris' Early Warning Network; and Mobile Health NZ's rural connectivity program.

Optus made AU$281 million in revenue from wholesale satellite services in the year to March 31, and last month snagged Telstra exec Stuart Bird to head up its Satellite and Wholesale division following the retirement of former lead Robert Parcell in April.

Communications service provider SpeedCast told ZDNet in April that it foresees satellite growth due to defence and military spending increases under governments throughout Australia, the United States, the United Kingdom, and Europe.

The Australian government has been accelerating its military and defence spending and will continue to do so, SpeedCast CEO Pierre-Jean Beylier told ZDNet.

Updated at 2.15pm AEST, June 1: Added quote from Paul Sheridan

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