The delivery of high-speed internet to some of the most remote communities in Australia has taken a leap forward following NBN Co's selection of Space Systems/Loral (SS/L), a leading manufacturer of commercial broadband satellites, to build two next-generation Ka-band satellites.

The satellites, which are planned to launch in 2015, are designed to provide high-speed broadband coverage to around three percent of premises outside the reach of the NBN's fibre optic and fixed-wireless services, including outback areas and Australia's external territories such as Norfolk Island, Christmas Island, Macquarie Island and the Cocos Islands.

The contract, valued at approximately $620 million, follows a comprehensive, two-year procurement process undertaken by NBN Co. The contract is part of a total investment of approximately $2 billion that is required to deliver the NBN Long Term Satellite Service. Other agreements will cover the ground systems, end-user equipment and the space launch.

As part of the contract, SS/L will also supply associated telemetry, tracking and command systems for NBN Co's Long Term Satellite Service.

The satellites and ground-based control systems are expected to be delivered over the next 41 months, with the first satellite launch planned for early 2015 and the second planned for the second half of 2015.

NBN Co Chief Executive Officer Mike Quigley said: "NBN Co's satellites have been designed to deliver initial peak speeds of 12/1 Mbps* at the wholesale level for the same wholesale access price as similar fibre services. It will be possible for retail service providers to offer services to homes and businesses in the satellite footprint that are as good or better than the services many city people currently experience.

"NBN Co is providing an open access network which is expected to deliver competition amongst retail service providers because it is provided on a non-discriminatory basis. This in turn has the potential to lead to lower prices and innovation for consumers - including those in geographically isolated areas"

John Celli, President of Space Systems/Loral, said: "NBN Co and Space Systems/Loral share a commitment to excellent performance and the highest quality service. We're delighted to play a part in helping to deliver much-needed high-speed broadband services to communities in regional and remote areas."

Two further tenders for the delivery of other components of the Long Term Satellite Service will be awarded in due course; NBN Co is evaluating supplier submissions for the construction of satellite ground systems, and in coming months will release a tender for the launch of the satellites into orbit.

Until the two satellites are operational, NBN Co is operating an Interim Satellite Service which was set up to assist the transition from the Commonwealth's Australian Broadband Guarantee program to the Long Term Satellite Service. The Interim Satellite Service provides download speeds of up to 6Mbps* to retail service providers, and more than 2500 premises have already connected.