NBN Co's former chief executive has defended the decision to build its own satellites as the much touted private-sector alternative, Melbourne-based NewSat, files for bankruptcy and heads into voluntary administration amid allegations of mismanagement and mis-spending.
NewSat was repeatedly mentioned as a private-sector solution for NBN Co's satellite services for several years by its chief executive Adrian Ballintine and even by Communications Minister Malcolm Turnbull, who described the company as "pretty capable".
![Mike Quigley says the long-term implications of the Coalition's approach will be bad.](/web/20170205161932im_/http://www.smh.com.au/content/dam/images/1/0/d/8/s/h/image.related.articleLeadwide.620x349.1mopac.png/1466629426108.jpg)
NewSat is listed on the ASX and has been raising money to launch its own satellite, with plans to re-sell the capacity for profit. It already re-sells capacity on other satellites.
Mr Ballintine wrote opinion pieces arguing its Jabiru 1 satellite would be in the air much quicker than anything NBN Co could build. Jabiru was due to launch in early 2014, but was still under construction.
And shortly after NBN Co announced it was spending $620 million to build its own satellites, Mr Turnbull argued there was no need for NBN Co to do so when there was bandwidth on commercial satellites available for lease.
"There are Australian companies, there's one Australian company in particular NewSat ... which was in the press today which provides satellite services to the United States Defence Department in the Middle East, in Afghanistan and so forth so they're presumably pretty capable at what they're doing. Anyway, they've been brushed, they don't get a look in here. There is no need for the NBN to own this infrastructure itself..." Mr Turnbull said on February 8, 2012.
Now, NBN Co is just months away from launching the first of two Ka-band satellites while NewSat has never launched its own and the half-finished satellites may be sold off by receivers looking to recover millions of dollars. Ka-band satellites provide better internet services.
Turnbull's office did not respond to requests for comment.
NBN Co's first satellite is due to launch later this year providing internet relief for Australians living in regional areas, particularly those who missed out on its popular interim satellite products. The satellite has capacity to deliver speeds of 25 megabits per second download speeds and 5 Mbps upload.
"The NBN Co satellite program has been the subject of criticism almost from its inception," former NBN Co chief executive Mike Quigley said in response to recent queries from Fairfax Media.
"Claims have been made that it is a gold-plated solution, that it is significantly over budget, that it is a long way behind schedule and that the NBN Co satellite team have not been prudent in the process they followed in filing for the satellite orbital slots."
"The facts are that the NBN Co satellite program is still tracking to its original budget and schedule which were set more than five years ago...
"The NBN Co satellite team should be congratulated for keeping the project on track, both in costs and time ...
"The NBN Co satellite program is a very complex engineering project which required the expertise of a dedicated team of Australian engineers who are turning the vision for better broadband for rural Australia into a reality."
Last Friday NewSat and six subsidiaries were placed into voluntary administration with PPB Advisory. The administrators have kept the company running while they examine the books and assets to determine NewSat's future.
It looks unlikely that having NBN Co as a future customer could have saved NewSat from administration.
Meanwhile, McGrathNicol have been appointed receivers by two foreign lenders — the US government's ExIm bank and European COFACE, owed $280 million and $108 million respectively - to try and recover assets.
LockheedMartin has been building the Jabiru satellite for NewSat, but has threatened to terminate the contract because NewSat missed bill payments. The receivers and administrators have taken legal action in the US to stop LockheedMartin from terminating the contract.
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