Satellite Industry Development Bill

On September 30, 2015 the Executive Branch sent a Bill called “Law of Satellite Industry Development” (the “Bill”) to the Senate. The Bill aims to declare the development of the satellite industry as a state policy to be of public interest and the development of geostationary satellites of telecommunications a national priority.

In this context, the Bill proposes the approval of the “Argentine Geostationary Satellite Plan 2015-2035”, (the “Plan”), whose implementation is entrusted to the “Argentine Company of Satellite Solutions” (“ARSAT”), created by Law No. 26,092 to which it has attributed the orbital position 81° West.

The main objective of the Plan is to strengthen the developed and installed capacities for the development of geostationary satellites of telecommunications and the exploitation of satellite services in Argentina. It provides for, among others, developing and launching a series of 8 new geostationary satellites of telecommunications over the next 20 years, bound for the marketing of satellite services by ARSAT or selling platforms.

It also stipulates the realization of research and development in order to reach a new geostationary satellite of telecommunications platform with more payload power as an evolution of the current ARSAT satellite platform, as well as increasing the national component of Argentine geostationary satellites.

ARSAT’s bylaws provide the issuance of Class “A” shares (in favor of the Argentine State), “B” and “C” (the latter two to be acquired by third parties through public tender proceedings or stock public tender offers). To guarantee the Argentine’s State’s control over ARSAT, the Project sets that the capital of ARSAT will be represented by 51% of shares Class "A", setting restrictions on the transfer of these shares without the express authorization of two thirds of the members of the Argentine Congress.

The same authorization is required for any act or action that limits, alters, deletes or changes the destination, availability, ownership, domain or nature of the essential resources and associated resources of the Information Technology and Communications and Telecommunications ("ITC"), as defined in "Digital Argentina" law, which belong to ARSAT.

The frequency bands reserved preferentially for ARSAT will be used for the implementation and operation of services and applications for which these bands are allocated, giving priority to public protection applications and operations of emergency and defense, complementing ARSAT ITC network services, and primarily serving the most vulnerable areas of the country, in their own projects or partnerships with licensees of ITC services.

The project should now be analyzed by both Houses of the Argentine Congress.