NEC Wins a Deal of 20 Billion for a Satellite Supply

NEC has won a 20 billion yen deal ($190 million) to supply a radar satellite to Vietnam, highlighting an advantage traditional players have over startups in these times of economic crises.

The deal, which will be announced soon, marks the first export of an observation satellite by a Japanese company and includes the cost of launch and ground equipment as well as that of training engineers and operators in Vietnam, company representatives said.

The ground station will be constructed in the Hoa-Lac Hi-Tech Park in Hanoi. The entire project is estimated to be worth around 50 billion yen ($470 million) and will be financed with official development assistance in the form of low-interest loans, the representatives added.

The satellite is scheduled to be sent into orbit in 2023 on an Epsilon rocket to be built by IHI Aerospace. The launch could be moved back if the coronavirus crisis drags on, preventing Japanese and Vietnamese engineers from visiting each other to work on the project, the company representatives warned.

With little growth expected in Japan’s space budget, NEC is looking overseas to expand its revenue. Vietnam, a strategic partner of Japan and a key counterweight to China, is seen as an ideal partner for the Tokyo-based company.

Vietnam is looking to Tokyo to help it develop the capability to build and operate its own satellites. Japan’s Mitsubishi Electric exported communication satellites to Singapore, Taiwan, Qatar and Turkey in the past.

The deal could also mark a resurgence for established companies like NEC, a 120-year-old telecom equipment maker and defense contractor. Until recently, traditional contractors had been seen slow and under threat from more dynamic startups as a belief grew that the private sector would take over the business of launching space missions from government agencies like NASA.