quick money, page-36

Lockheed is spending up to $83 million to move to a 50/50 JV with EOS re this business unit. The JV is currently building a tracking station in WA to complement EOS’s existing site in Canberra. Other sites are also likely to be announce over calendar 2016. These telescopes cost around $20 mill each, hence Lockheed to get to a 50/50 JV needs to build an additional 3, in addition to the WA one they are funding.
  
The business model EOS/Lockheed are implementing is similar to the existing infrastructure model.

The characteristics include:

• The provision of an essential service; (as debris orbits change daily, they need to be tracked daily, hence there is an ongoing requirement for the data)
• Significant barriers to entry and a generally dominant market position; (Initial capex is around $150 million, yet access to the IP which only EOS controls, is the biggest hurdle for competition.)
• Long duration assets, with a life of 30+ years;
• Have high upfront costs, but low ongoing operational costs; (The tracking stations are largely automated, hence high margin)
• Long-term, stable cash flows, generally with low volatility compared to other asset classes; (EOS’s main clients will be Government agencies and the large multi national satellite operators and insurance agencies, all requiring ongoing data, via long term contracts.

Once the tracking facilities are completed, it is estimated that revenue from satellite/insurance operators etc could be very large.
This Business unit also has a "production and testing facility" for the design and manufacture of the observatory telescope systems being built.