Moon dust & hard business
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Even before Chandrayaan’s launch, while India and the world were worrying over the global financial meltdown, Antrix had crossed a milestone unnoticed and unheralded. It delivered a communications satellite, the W2M, to the Paris-based Eutelstat, a leading telecom operator, on October 18.
Although the W2M satellite—unlike the home-grown Chandrayaan-1—was conceived and built in association with EADS Astrium, the European satellite major, it was the first complete commercial satellite built by ISRO for a foreign client. Antrix is tight-lipped about the size of the deal or its share, but insiders said the contract was worth about Rs 350 crore, or close to Chandrayaan’s cost.
As the W2M was shipped, K.R. Sridhara Murthi, Antrix’s Managing Director, had told Business Today: “Today is a great day for us. For the first time, India has shipped a commercial satellite for export.”
The outside world had little clue about W2M, but Antrix does not mind. It is now putting together another satellite, Hylas, for a UKbased client, even as ISRO works on Chandrayaan-2. “Work on Chandrayaan-2 will start soon… It will contain an orbiter, a lander to soft-land in the moon and a rover to pick up samples and analyse them,” says Nair, adding: “Mars is our next challenge.”
On the edge
ISRO’s edge so far has been its ability to offer the cheapest platform for launching “light” satellites, even as it faces tough competition from global players in all its segments—satellite building and launching, and offering transponders on its satellites.
“We are not operating in isolation. We have adopted the cooperate-and-compete approach... that is how we have to do business and survive,’’ says Murthi. Antrix is not ready to spell out its rates vis-a-vis those of the competition, but Murthi says: “We can be 30 per cent cheaper if we can have an end-to-end value addition—from design to delivery of service.” And that has not happened yet.
Antrix is not the only one reaping gains. India’s private sector has latched on to the subcontracts from the space programme. The domestic industry, apart from meeting 30-35 per cent of ISRO’s orders for components and services, also gets orders from Antrix worth 20-30 per cent of its annual revenue, which is expected to be Rs 940crore in 2008-09. For example, the Rs 100-crore deep-space network built by the public sector Electronics Corporation of India (ECIL) on Bangalore’s outskirts, had components built by many others, including private sector Indian companies.
Apart from majors like ECIL or Godrej, ISRO’s activities have helped scores of medium-scale industries like Avasarala Technologies in Bangalore and Astra Microwave Products and MTAR, both in Hyderabad. “Over the last two years, we have got orders worth Rs 25 crore each from ISRO, and I think the orders are only going to rise in the coming years,” says B. Malla Reddy, MD & CEO of the listed Astra, which supplies transmit/ receive (TR) modules for remote sensing satellites, automatic weather stations and C-band and Ku-band receivers.
Avasarala, which supplies heat pipes for payload structural panels, is moving up the value chain. “We are thinking of migrating into total assembly of structural panels,” says T.T. Mani, MD & CEO of Avasarala, which hopes to end the year with revenues of Rs 200 crore, up Rs 48 crore over last year’s figure.
Growth trajectory
Antrix reported revenues of Rs 940 crore and a profit after tax of Rs 168 crore in 2007-08, an increase of 41 per cent and 60 per cent, respectively, on the corresponding figures for the previous year. “Antrix is an amazing success story. It was started with equity of just Rs 1 crore in 1994, and you can see where it is now,” says S.V. Ranganath, Special Secretary (Finance), in the Department of Space.
U. Sankar, author of The Economics of India’s Space Programme, notes that ISRO’s market opportunities lie in, among others, the launch of small satellites in polar orbits. “Its unit launch cost is lower because of its learning-bydoing approach, lower cost of technical manpower and lower risk,” says the honorary professor at the Madras School of Economics.
S.R. Kulkarni, Professor of Astronomy & Planetary Sciences at Caltech, says the future of the space business and space science is quite bright. “India need not travel the same path as the pioneers or the new entrants, but can blaze a distinct trail by building on her strengths,”’ he says. (see next page) As for Chandrayaan itself, the possibilities for commercial gains are quite distant. “Right now, it will be premature to talk of the commercial spin-offs from Chandrayaan-1. But at a later stage we will think of possible launch opportunities for any private initiatives for moon probes and lunar missions. Like, for instance, small satellites, which will be launched either through private enterprises or through space agencies,’’ says Murthi.
