Mexico Pays Boeing $1B to Build Satellites for Communications, Security

Boeing (NYSE:BA) will team up with the Mexican government and a rival supplier for $1 billion to build a three-satellite system and two ground sites for use in the Central American country's civil communications and national security.

The Chicago-based defense contractor will create the system, dubbed Mexsat, to help the Mexican government achieve secure communication for its national security needs, as well as enhanced civil telecommunications coverage.

Interestingly, Boeing Defense, Space & Security, which is one of the largest businesses in the world of its kind, will buy one satellite and certain ground-operations equipment from rival Orbital Sciences (NYSE:ORB).

Each Boeing satellite will supply 14 kilowatts of power through five-panel solar array wings that use high-efficiency, ultra triple-junction gallium arsenide solar cells. The Orbital Sciences satellite will provide full coverage of Mexico and its patrimonial seas and relay civil communications for socioeconomic development, the company said in a statement. The first is slated for launch by the end of 2012.

The two ground sites in Mexico will be created with advanced beam-forming flexibility to direct mobile user spot beams to government agencies operating in Mexico and its nearby seas, including the Pacific Ocean and Gulf of Mexico.

Craig Cooning, chief executive of Boeing Satellite Systems International, said the system marks the fourth-generation of satellites provided to Mexico by Boeing for security and communications needs.

"MEXSAT builds on Boeing's 13 years of experience in designing and delivering advanced geomobile systems," he said.

Boeing has provided Mexico five satellites since 1985.