Tech Booster: In addition to supplying Turkey with the Gokturk-1 satellite, Thales Alenia Space is also building a satellite integration and test center to boost the country's domestic space efforts. (Telespazio)
ROME — Fresh from winning a hotly contested Brazilian military satellite contract, Thales Alenia Space appears to be reaping the benefits of a policy often relied on by European firms to win defense export orders: generous technology transfer.
“In the military satellite market, we are increasingly seeing customers who want to be independent and produce their own satellites,” said Joel Chenet, the firm’s public, regulatory affairs and general adviser.
Brazil’s Aug. 12 announcement that it had selected Thales Alenia Space to supply an X-band and Ka-band dual-use satellite marked a victory for the Franco-Italian firm over competitors from the US, Canada, Israel, Japan and Russia.
A condition of the deal was bringing Brazil’s fledgling satellite industry up to speed, and so the effort to build the Geostationary Defense and Strategic Communications Satellite will see Thales Alenia Space team with a local joint venture of telco Telebras and Embraer Defense.
Chenet said he could not discuss the accord because it is not finalized, but said, “We thought technology transfer would be important in Brazil, just as we have seen in Turkey.”
In Turkey, where the firm is supplying the Defense Ministry with the Gokturk-1 optical satellite, it is also working to complete a satellite integration and test center this year to boost the country’s domestic space drive.
Measuring more than 3,000 square meters, the clean room will allow the integration of more than one satellite at a time and should handle final integration of Gokturk-1 before it is launched in 2015.
“We aim to see the integration of a second Gokturk satellite in the new clean room,” Chenet said. “Clean rooms are a key enabler in technology transfer.”
Chenet said Turkey is also eyeing the construction of a synthetic aperture radar (SAR) satellite. Thales Alenia Space built the Cosmo Skymed SAR satellite used by the Italian military.
“Any defense contract with countries that do not have the requisite technology needs technology transfer, whether it’s arms, aircraft or satellites,” said Jean Pierre Darnis, the deputy director of the security and defense department at the Istituto Affari Internazionali, a Rome think tank. “If you want to compete in emerging markets, it is the rule.”
“There is the question of ITAR regulations, which can complicate matters,” he said of the US International Traffic in Arms Regulations. “It is tradeoff between conquering markets and handing over technology, which may prove difficult.”
One hazard of helping set up fledgling industries around the world is that countries may transform from customers who benefit from transferred technology to competitors who export it.
Chenet pointed to South Korea, which has gone from using US technology for its Kompsat-1 satellite to becoming an exporter.
“The Koreans are proof it happens, but they have only 10 years experience and we have more than 20,” he said.
Turkey could also become an exporter, he said, “but in the case of SAR technology the deal with Turkey would be to transfer just part of the technology.”
Meanwhile, the firm’s sales to China have long been a point of contention with Washington, but years of dispute appeared to be dramatically resolved in August.
The fight started when the firm began exporting satellites it said were ITAR-free to China, meaning they officially contained no US components included on the US list of products falling under the strict export controls.
Suspicions were raised in the US that the firm had indeed included ITAR products on the satellites destined for China — making them in breach of US rules — and proposals were launched in Congress to penalize the firm. Thales Alenia Space in turn claimed the US was wantonly applying ITAR rules to insignificant components to thwart its sales efforts.
But then in August the firm made a surprise announcement. “In consultation with the US Department of State, Thales Alenia Space learned that beginning around the year 2000, a number of US space component manufacturers and exporters had misclassified hardware as if it were commercial or dual-use” when in fact they fell under ITAR, company officials said.
Thales Alenia Space added that the State Department had found nothing wrong with the firm’s system of checks and that blame for any ITAR violations lay with the US firms that had mislabeled goods.
Chenet said sales to China are “on hold,” adding he believes that sales to other countries would not be compromised.
“We are not in charge of labeling products — the law is very clear on authorizations, and it has been the task of suppliers,” he said. “There has been a great deal of discussion between the US government and Thales Alenia Space, with the support of the French government, and the US knows Thales Alenia Space has always respected the law. This is a good starting point.”
The firm derives 20 percent of its €2.1 billion (US $2.7 billion) revenue from military contracts, and Chenet said he expects to see defense work grow by 20 percent over the next five years, boosted by growth in optical and SAR satellite work.
A contract signed with the United Arab Emirates in July will see the firm provide a high-resolution optical satellite system for launch in 2017 and 2018.
At home, the firm represents an exception to a series of Italian-French defense tie-ups that have been characterized by rows over technology sharing. Formed in 2005, the joint venture sees Thales holding 67 percent to Alenia’s 33 percent, while the stakes are reversed in the sister company Telespazio, which manages satellite services.
Chenet said the Italo-French Athena Fidus mil-sat program, on which Thales Alenia Space works, showed how industrial synergies could help foster military synergies. “This,” he said, “is genuine pooling and sharing.”