Swedish satellite communications specialist Ovzon has achieved a significant milestone by securing its largest contract to date, worth 1.04 billion SEK (approximately 110 million USD) from the Swedish Defence Materiel Administration (FMV). This landmark agreement represents a major validation of the company's technological capabilities and positions it as a key player in the critical defence communications sector.

The comprehensive contract encompasses Ovzon's integrated SATCOM solution, which includes satellite network services, mobile satellite terminals, and dedicated customer support. The service is scheduled to run for 24 months, with delivery beginning in June 2025, marking a crucial period for the company's growth trajectory and operational expansion.

At the heart of this contract lies Ovzon's innovative SATCOM service called HERO, which is built upon the OVZON 3 proprietary satellite and third-party satellite capacity. This service represents a sophisticated approach to satellite communications that leverages existing infrastructure while providing enhanced capabilities tailored to defence requirements.

The HERO service demonstrates Ovzon's ability to create value-added solutions that go beyond traditional satellite communication offerings. Indeed, a substantial portion of the contract, valued at 220 million SEK, is dedicated to mobile satellite terminals from Ovzon's specialized product portfolio. These terminals have been specifically developed for both manned and unmanned missions, as demonstrated in December 2024. The delivery schedule for these terminals is strategically planned, with one-third to be delivered immediately and the remainder following a gradual rollout schedule. This phased approach ensures operational continuity while allowing for systematic integration and testing.

The satellite network services component of the contract represents both a renewal and expansion of a previous agreement signed on September 6, 2024. This continuity demonstrates the Swedish military's confidence in Ovzon's capabilities and suggests a deepening partnership between the company and Sweden's defence establishment. The expansion element indicates growing demand for Ovzon's services and validates the company's strategic direction.

What sets Ovzon apart from other satellite communication providers is its focus on delivering highly specialized, mission-critical communications solutions specifically designed for defence applications. Unlike traditional satellite service providers that offer general-purpose connectivity, Ovzon has developed an integrated approach that combines advanced satellite network services with purpose-built mobile terminals optimized for military use. This comprehensive solution addresses the unique challenges faced by defence organizations, including the need for secure, reliable communications in challenging environments and during critical operations.

Interviewed by FW MAG, Per Norén, Ozon’s CEO, explained that “Our technology and solutions stand out due to two defining elements: The first is what we refer to as the Ovzon Coefficient — a unique combination of performance, mobility, and resiliency. These three parameters are engineered to work in concert, enabling the most secure and high-throughput mobile connectivity in the most challenging environments.

The second is our proprietary satellite, OVZON 3, which is equipped with an advanced On-Board Processor (OBP). This processor enables in-orbit signal routing and dynamic link optimization, providing enhanced flexibility, reduced latency, and secure data handling at the satellite level. Together, these capabilities enable Ovzon to provide SATCOM solutions that are optimized for the most critical missions.”

The company's business model reflects a sophisticated understanding of defence requirements, with revenue recognition structured around both service delivery and equipment provision. For satellite services, revenue is recognized on a straight-line basis over the contract period as services are performed, while mobile satellite terminal revenue is recognized at the point of handover. This dual approach provides predictable revenue streams while accommodating the different nature of service and equipment contracts.

Ovzon's cash flow structure is equally strategic, with milestone-based invoicing that begins at contract signing for satellite services, followed by additional invoicing dates aligned with service delivery schedules. For mobile satellite terminals, invoicing occurs at handover, providing immediate cash flow benefits that support ongoing operations and future development.

Per Norén emphasized the significance of this achievement, stating that the company is "honoured by the trust that Swedish Defence Materiel Administration (FMV) is placing in us." He characterized the contract as "Ovzon's largest order to date" and described it as "a clear validation that our Swedish technology meets the most critical operational needs." This endorsement from Sweden's defence establishment carries particular weight given the country's reputation for technological innovation and stringent defence requirements.

Indeed, the contract's timing is particularly significant as it aligns with Ovzon's strategic objectives for scaling operations and enhancing market relevance. The company has outlined ambitious goals including increased order intake, revenue growth, improved EBITDA, and positive cash flow. These financial targets are supported by a commercial strategy focused on making every customer a reference, fully utilizing the OVZON 3 satellite, and concentrating on core market segments and relevant geographies.

This major contract positions Ovzon to accelerate its growth trajectory while demonstrating the viability of its specialized approach to satellite communications. Talking to FW MAG, Per Norén talked about recent scenarios where being equipped with Ovzon mobile satellite terminals and integrated service made the difference.

He said: “While customer and operational discretion prevent us from disclosing details of specific military deployments, we can share some verified scenarios that demonstrate the strategic impact of our technology:

- At the 2024 Summer Games in Paris, we deployed a resilient, secure SATCOM backhaul network. Units from the French GIGN were able to connect via standard LTE devices, leveraging our encrypted satellite links for mission coordination.

- In collaboration with the Swedish Defence Materiel Administration (FMV), we pioneered a project to remotely operate an unmanned ground vehicle (UGV) over a distance of 1,000 km — a proof of concept that showcases our ultra-low-latency link for real-time control.

- During the Ovzon High North Expedition, we tested our Ovzon T6 and Ovzon T7 mobile satellite terminals in arctic conditions above 70°N. The expedition demonstrated robust performance in extreme cold, low satellite elevation angles, and dynamic mobility scenarios.

These examples illustrate that our end-to-end integrated satellite communication SATCOM solutions — combining the high-performing Ovzon 3 satellite with our small and rugged mobile satellite terminals — deliver resilient, high-performance connectivity precisely when and where it is most needed.”

During a dedicated press conference, the company’s executives confirmed that the company’s ambition is to have a proprietary constellation that would allow clients to be strategically independent from other providers. Nonetheless, this will be only possible as the client base grows enough to justify such a major investment. Should this happen, Ovzon would be able to put in orbit a new satellite in 24-30 months.

As defence organizations worldwide increasingly recognize the critical importance of secure, reliable communications capabilities, Ovzon's success with the Swedish military could serve as a catalyst for expansion into other markets and with additional defence customers seeking similar integrated solutions.

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