When the space shuttle Columbia deployed its first communications satellite in earth orbit today, it made a little bit of space history for Satellite Business Systems of McLean.
The first commercial cargo carried away from earth by the space shuttle was a 21-foot-tall cylinder of electronics worth almost $50 million and owned by SBS, the third in a network of four identical satellites that SBS is counting on in the next three years to make it one of the fastest growing companies in U.S. business history.
Last year, after seven years of planning and nearly $600 million in investment, SBS began its commercial operations, tallying $5 million in revenues. For the first half of this year, revenues reached $10 million. By 1985, SBS fully expects to produce sales of $500 million a year.
"These are realistic expectations based on real growth patterns," SBS President Robert C. Hall told The Washington Post in an interview. "We are literally signing new customers for our service every day."
It will be some time before SBS begins seeing a profit. Hall predicts the company will begin operating in the black in 1984, but some financial analysts doubt that SBS will be able to meet that goal, given its large investment and operating expenses.
Begun as a partnership of Aetna Life & Casualty Co., Comsat General (a subsidiary of D.C.-based Communications Satellite Corp.) and International Business Machines Corp., SBS counts the giants of private industry among its clients. Boeing Co. Inc., General Electric Co. and General Motors Corp. use SBS satellites to transmit their coast-to-coast computer traffic and telephone calls. More than 300 companies are SBS clients.
Some of these companies, however, use the system on a far smaller scale than SBS had hoped, relying on the satellite network for only a portion of their long-distance business instead of using SBS for the bulk of their calls.
Thus, SBS expects its most rapid growth to come from home-to-home long-distance telephone calls through the Skyline service that it will begin to provide late next month. SBS claims that Skyline will save customers anywhere from 14 to 30 percent of what they pay the Bell System for direct-dial service.
Skyline calls will pass through antennas and switching stations in 20 cities, beginning next month with Washington, Minneapolis and Philadelphia. Next year Skyline will be in Boston, Chicago, Dallas, Houston, Los Angeles, New York, San Francisco, Seattle and nine other cities.
Rates for Skyline include a one-time $16 charge to start service and a minimum-use charge of $15 a month. SBS says weekday calls to neighboring states will cost 25 cents a minute; those to the most distant states, 39 cents a minute. Late-night and weekend calls will be 10 cents a minute for nearby calls and 14 cents a minute for calls to anywhere in the United States.
"We think one of our best features is the quality of our service," Hall said. "Ours is a full satellite service without multiple switching and without interference from terrestrial microwave signals."
The two satellites already in orbit and the one put there yesterday by SBS operate at higher frequencies than other U.S. communications satellites. The signals sent from earth to SBS satellites leave at 14 gigahertz, which is twice as high in frequency as the signals used by other satellite communicators.
These signals are amplified 100 billion times by transponders on the satellite and then sent back to earth at a frequency of 12 gigahertz so they will not interfere with the signals coming up from earth at the higher frequency.
This means that the frequencies used on the SBS satellites do not mingle with the numerous microwave signals carried back and forth across the country by telephone companies, television and radio networks. The microwave frequencies used to handle message traffic on earth are almost identical with the frequencies used by most communications satellites, except for the three now owned by SBS.
"This means we can put our antennas on the roofs of buildings in the downtowns of cities," Hall said. "It also means we can eliminate a lot of the switching that other satellite users need to connect their city customers with their more rural antennas."
The company's sales growth has been matched by its personnel growth. SBS started with 100 employes, now has 1,600 and expects to grow to 3,000 by the middle of the decade. Said Hall, "We expect to level off at about 3,000."
What happens if something goes wrong with the satellite deployed in space by the shuttle astronauts? Hall said that a lost satellite could cost the company as much as $100 million a year in lost revenue. The two satellites SBS already operates are running at one-fourth of their capacity but should reach full capacity by 1985, Hall said. If the satellite deployed yesterday works as expected, all three should be at full capacity by 1985 as well.
A fourth satellite to complete the SBS network will be carried into orbit by the space shuttle in 1984. It will serve mostly as a backup for the other three, being put into service only if one of the others fails or reaches the end of its lifetime of nine years.