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Lockheed gets $2 billion US satellite deal

Sunday January 29, 11:07 am ET
By Jim Wolf

WASHINGTON (Reuters) - Lockheed Martin Corp. (NYSE:LMT) has won a $2 billion, 10-year contract to build the backbone of a space-based U.S. Air Force network that would boost greatly communications links to forces worldwide, the Pentagon announced Friday.

Bethesda, Maryland-based Lockheed beat Northrop Grumman Corp. (NYSE:NOC) and Raytheon Co. (NYSE:RTN) to lead development of the ground segment of the so-called Transformational Satellite Communications System, or TSAT.

A ground-based user will be able to connect at 1.5 megabits per second using a one-foot antenna, or roughly 25 times faster than conventional dial-up Internet access connections, an Air Force fact sheet said.

Such speeds are capable of handling multiple streams of video, audio and text data.

"It's hard to overstate how important this technology is to future U.S. military plans," said Loren Thompson, a defense consultant with close ties to the Pentagon and to industry.

The links are designed to support forces with real-time intelligence, surveillance and reconnaissance data.

TSAT is to consist of a ring of five satellites cross-linked by lasers to make the network less vulnerable to potential disruptions on the ground.

The so-called Mission Operations System contract, or TMOS, went to Lockheed's Integrated Systems and Solutions business unit, San Jose, California, where the work will be centered.

"Awarding TMOS decreases TSAT program risk by providing an integrating construct for network architecture and design," the Defense Department said.

TSAT has been controversial in Congress because of its projected high costs as well as concern over whether it will work as promised .

Lockheed's main subcontractors on the project include Northrop Grumman, closely held Telecordia Technologies Inc., Science Applications International Corp. and Verizon Communications (NYSE:VZ), Lockheed said.

The system is designed to extend the Pentagon's so-called Global Information Grid to users worldwide and "deliver an order of magnitude" increase in capacity, the Air Force fact sheet said.

It is expected to start operations in 2014, said Keith Mordoff, a Lockheed spokesman.

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