Update:  Alcatel Denies Reports of Abandoning SkyBridge

Alcatel Space has denied press reports that it is abandoning plans to deploy the SkyBridge satellite constellation. Alcatel has been restructuring its operations to reduce costs and cut losses. The company said, "we would invest in putting satellites into orbit when the market is ready." Alcatel says it is still committed to SkyBridge. Alcatel admitted that SkyBridge has delayed, to “early 2002”, plans to use capacity on existing geostationary satellites to provide broadband IP services by satellite to service providers. SkyBridge had announced plans to introduce such a service in 2001. No reasons were provided for the delay, though Alcatel has said SkyBridge is "on track".

Responding to recent press reports, Alcatel said its intention to wait until market conditions improve is an "old story." The French daily Les Echos was first to report that plans to deploy SkyBridge had been put on hold, though the service could be launched in 2004 should the market conditions change. The Wall Street Journal also reported that Alcatel was shelving plans for SkyBridge amidst doubts about demand for the services, as well as weakened financial markets. Websites that track launch manifests do not yet list any SkyBridge launches in 2002, though contracts totaling ~US$1 billion for six Boeing Delta and 11 Starsem Soyuz launches have been announced, with those announcements indicating launches might begin during 2002.

Total Telecom quoted Simon Bull, Comsys senior consultant, that there are certain merits to initially taking a geostationary satellite service approach. For example, SkyBridge would be able to start building up a customer base without having to wait for the deployment of the satellite network. Bull considers it unlikely that Alcatel will abandon SkyBridge given the amount of money already invested in R&D, but he was cautious about the chances of SkyBridge reaching full commercial service. He told Total Telecom, "At the moment I would say the odds are lower than 50-50," while conceding that the outlook might improve as general market conditions get better. Bull thinks there is demand out there, but said it's a question of waiting for the right climate.

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