After establishing itself in missiles and the Iron Dome, David's Sling, and Trophy defense systems, Rafael Advanced Defense Systems is expanding into surveillance satellites, sources inform "Globes." Israel Aerospace Industries (IAI) has dominated the Israeli satellites market up until now.
In recent days, Rafael unveiled in Brazil new capabilities it has developed over the years in this area, and begun marketing an advanced nano-satellite system. This active is designed to inaugurate competition for IAI's surveillance satellites in overseas tenders and Israeli Ministry of Defense procurement programs.
Rafael's new satellite system, called Lite Sat, is based on groups of nano-satellites operating at the same time and being used for observation missions for several points of interest on the earth's surface simultaneously. The system is designed for military uses, but can also be adapted for civilian use, such as in agriculture, monitoring natural disasters, weather, etc.
Each satellite weighs 50 kilograms. Rafael is talking about launching a number of satellites on the same missile, to be placed at cruising points at a distance of 350-400 kilometers from the earth's surface. Each satellite will be given a different cruising orbit, and when an army or intelligence agency uses a group of satellites, the satellites can significantly increase the rate at which intelligence is provided to the operating party's ground station.
Satellites are nothing new for Rafael
Surveillance satellites orbit the earth every 90 minutes. According to the concept presented by Rafael, the rate of providing intelligence output at every point of interest to be defined will be once every few minutes, thereby improving intelligence capabilities in real time. These capabilities are essential in order to monitor the movement of vehicles, deployment of forces, preparations for launching missiles, etc. This will make it possible to aim deadly fire at these sites ahead of time.
Rafael's decision to expose its satellite activity in Brazil follows the company's decision to compete in a tender published by the Brazilian government in order to upgrade its strategic capabilities. Although Rafael has been involved in satellite programs in various ways for two decades, it never manufactured satellites. The only Israeli company that has done this up until now is IAI, which manufactures the Ofek series of surveillance satellites used by the Ministry of Defense and the Amos communications satellites. Rafael was formerly a subcontractor for IAI in satellites, including the supply of parts relating to them.
In contrast to the small satellites that Rafael is offering, IAI's surveillance satellites are regarded as large, with each one weighing several hundred kilograms. The price of each such satellite is estimated at NIS 1 billion, and its lifespan is 10-15 years.
"A lot of room for innovation"
"We decided to enter this field because we realized that there is a lot of room in it for innovation," a senior Rafael executive told "Globes." "For half the price of a large satellite, we can place a large number of small satellites at various points in space and guarantee full intelligence coverage at very high frequency."
Defense industry sources say that there are already contacts between Rafael and the Ministry of Defense about possible cooperation in this field. The Ministry of Defense is the main customer for the surveillance satellites developed and manufactured by IAI. The sources estimated the potential for deals in the first stage of Rafael's new satellites program at several hundred million dollars.
Although Rafael is not aiming at the large satellite market, the concept it is proposing - deploying many small satellites at substantially lower prices, marks further tension between the two government-owned defense companies. "Rafael's experience in satellites is fairly limited, because up until now, it has focused on very limited activity in this sector. But it is a good company, and if it decides that it wants to accelerate its activity in this area, it will do this, and it will definitely challenge IAI," a senior defense industries source said.
The source added, "Rafael knows that if it enters the large satellite field, it will pay quite a high entry price, and it realizes that the entry price in the nano-satellites market is lower. It also understands that the entire world is going in the direction of nano-satellites, and although no one has yet proved the validity of this concept, it is a forecast that can pose a significant threat to IAI's dominance and hegemony in the sector."
Rafael finished 2018 with 15% growth and records sales of NIS 9.3 billion. In an effort to boost its growth, the company is aiming at the small UAVs market, and is in the process of acquiring Aeronautics for NIS 850 million, together with businessperson Avichai Stolero. Aeronautics' shareholders approved the deal last Thursday.
Several months ago, in an attempt to prevent Rafael from acquiring Aeronautics because of concern about intense competition in the UAV market, IAI made a proposal to acquire Yavne-based Aeronautics itself, thereby arousing complaints and severe criticism in the government. The criticism accused IAI of raising the price for Aeronautics and making the deal more expensive by forcing another government company, Rafael, to pay a substantially higher price.
IAI has been struggling for a long time against its negative image as a company controlled by its workers' committee, and has been the subject of very critical reports accusing it of inefficiency. The company lost tens of millions of shekels in 2018. In contrast, Rafael enjoys great prestige because of its successes in developing groundbreaking systems, including anti-missile defense systems, smart munitions, and systems for protecting tanks and armored vehicles against missiles.
Rafael's chairman is Uzi Landau.
Published by Globes, Israel business news - en.globes.co.il - on April 7, 2019
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