Aussat 3 has already lost some of its operating capacity and is now in an inclined orbit where the satellite drifts in a north-south figure eight, with only east-west station keeping maintained as a means of reducing fuel consumption. However, this requires ground stations to track the satellite in a similar figure eight, consigning the satellite to mainly hub operations using large ground stations.

Optus must make a decision on replacing Aussat 3 by mid 1999. But there is some pressure within Optus to launch a new satellite by late 2000, requiring at least two years lead time and requiring a decision by later this year to meet this schedule.

According to an Optus official, the company in not yet ready to comment officially until the tender document has been released.

The official added that what was driving the tender was the need to reduce the company�s direct capital expenditure on large satellites, which are now moving into a new four-tonne class of very large and powerful satellites.

The problem for smaller telecom carriers like Optus is how to fund such large ticket items which, on one hand, can deliver significant economies of scale, but, on the other hand, can be an excessive drain on financial resources.

Optus officials indicated that the total cost for a four-tonne geo- stationary telecommunication satellite is now reaching $500 million when launch, satellite procurement, infrastructure upgrade and insurance costs are totaled up.

With most companies today throwing standard business models to the wind, Optus is planning to put the question back to satellite manufacturers and end users. Asking them within the terms of the tender documents, to draw up a range of service options that could be sold to commercial, government and defense customers.

One of the biggest potential partners for the project is the Australian defence establishment which is considering taking a significant portion of the satellite�s payload capacity to mount a variety of telecommunications instruments.

Optus officials however are anxious to caution, "at this stage there is no firm indication when and if the project will go ahead and it is entirely dependent on the business models that come out of the tendering process."

Further complicating matters is the increasingly dominant role Cable & Wireless is playing in Optus. With a 49% stake C&W is slowly bringing Optus within its own global business network and strategy planning for the future.

How this will impact Optus� future business planning is yet to be clarified, but it increasingly evident that individual companies within each telecom group need to align their business operations more closely. This is not to only avoid duplication of services but to achieve further economies of scale by standardising telecom infrastructure across regions.

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