Optus’s newest addition to its satellite fleet, Optus D1, is suffering from what the company describes as a “configuration problem.” If the problem with the $200m satellite is serious it could affect the services to New Zealand’s 650,000 pay TV homes. It may also cause flow-on issues with a range of Australian clients including the behind the scenes operations of Australian television networks including the ABC, Nine Network, Network Seven and SBS.

While Optus is putting their best spin forward, they have confirmed to Crikey that the “configuration problem” was uncovered during the satellite’s testing phase. Optus PR has sought to downplay the problem and has emphasised that the satellite will go into service this week as planned. Across the trench however, leading Kiwi TV industry players including Sky and TVNZ are said to have taken part in what a long-time satellite industry observer described as “a rather panicy (sic) 4 hour meeting” last Friday.

Optus D1 was launched in October and has been under testing in orbit since. It was designed to replace the Optus B1 Satellite that is rapidly nearing the end of its lifespan. For the last several months there has been an ongoing concern about whether D1 would be in service before the older satellite died. In March this year, an orbital positioning problem on the ailing B1 led to a 14-hour blackout of all pay TV services across New Zealand. As a result, most major Australian clients including ABC, SBS, Network Seven and radio networks were temporarily transferred to other satellites pending the commissioning of the new D1.

Satellite enthusiasts are speculating that Optus D1’s main New Zealand transponders may have been designed on the wrong skew or polarity – meaning that they are effectively pointing the wrong way to be received in many New Zealand homes. Optus could neither confirm nor deny this yesterday. If it turns out to be true, it would be a major problem given that Sky New Zealand – the Kiwi Foxtel – is the major client for the anticipated 15-year life-span of the new satellite.

While Optus is confident that the satellite will be operational this week, any configuration issues could mean that Optus will need to shift capacity that would have been utilised in Australia or elsewhere over to New Zealand. If that happens, Optus risks a very expensive piece of infrastructure operating at a significantly reduced capacity and profitability.

Optus D1 is the first of two satellites in the next generation D-series program. A second satellite, Optus D2, will also be built by US based Orbital Sciences Corporation and is due for launch in mid 2007. According to Optus, the D-series program represents an overall investment in the order of $400 million. Whether the problems are severe enough to warrant compensation from either Optus or the satellite’s manufacturer is not yet clear.