Trends to Watch in the New Decade
by Virgil Labrador
Los Angeles, Calif., January 6, 2020--Here we are in the new decade of the 2020s. The recent history of the satellite industry have been highlighted by key developments that have had a profound impact on the industry. The 1970s and 80s saw the rise of C-Band which facilitated the distribution of video to various networks. The 1990s gave us Ku-Band technology that brought about the explosion in Direct-to-Home (DTH) services. The new millennium of the 2000s brought Ka-Band to the fore enabling broadband services.
If there is anything that will epitomize the 2020s for the satellite industry, it will be the so-called Non-Geostationary Orbits (Non-GSOs) with the upcoming Middle Earth Orbits (MEO) and Low Earth Orbit (LEO) constellations.
As we have reported in these pages, new LEO constellation filings dominate the regulatory landscape. Thousand of LEO satellites are planned for deployment. There is also a growing market for smallsats and cubesats which is lowering the barriers for entry for almost anyone to enter the the satellite business.
Not all of the planned constellations and new satellite systems will meet with success. Some are in a more advantageous position than others. We have already seen the demise of one of the leading contenders (LeoSat), but we have also seen the rapid deployment of the OneWeb and Starlink systems. The jury is still out on the business case for these new constellations, but there is sufficient cause for optimism with the rising demand for broadband access and promising potential of vertical markets as Internet of Things (IoT), Machine to Machine (M2M), In-Flight Connectivity (IFC), Maritime and others.
New Space
One key difference in decades past is the influx of investment in the space industry from the private sector including successful Billionaires like Spacex’ Elon Musk, Amazon’s Jeff Bezos, Virgin’s Richard Branson, among others. These new players are dubbed “New Space” mainly to differentiate them from “Old Space” which leaned heavily on governmental support. We have already seen the positive impact new space entrepreneurs have made in instilling new dynamism and competition in the satellite markets.
One area where New Space has been in the forefront is Space Tourism. After many delays in last decade, we will finally see the first commercial space flight by Virgin Galactic in 2020. NSR in a recent report believes that the delays in the commercial launch of space flights has led to pent up demand for it. Regular commercial flights into space will have a spillover effect on other industries much like commercial aviation has made an impact 100 years ago. An example of how commercial space flights can affect other industries is that the same technology can be used to dramatically shorten commercial flights between cities by using rockets in a space trajectory. There are also many other spinoffs from Space Tourism like Virgin Galactic’s foray into launch services for small satellites.
The Rise of China, India and Other Up and Coming Players
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| China has been pursuing an aggressive space program that is challenging the established players. |
The past decades have seen the rise of China as an economic superpower. China has a very aggressive space program, managing to be only the third country after the US and Russia to have landed on the moon. As we can see from the article by Blaine Curcio in this issue on China space developments, the growth in its space sector is strongly supported by the government with many new private sector initiatives.
In October 2019, China stirred a lot of interest when it announced that it aims to build an Earth-moon space economic zone by the mid-century. This zone is projected to generate US$ 10 trillion for the Chinese economy by 2050.
India is another country to watch. In 2017, the Indian Space Research Organization (ISRO) made waves in the global satellite industry by placing 104 satellites (including 103 nanosatellites) in orbit in a single launch. India’s ISRO, a governmental organization has pursued the development of the commercial space sector in India through incubator programs and development of key technologies such a low cost launchers and small satellites. With its competitive costs, India can be a big player in the low-cost launch business and manufacturing of small satellites.
Other countries are developing their space industries as well. Look out for Israel, Brazil and other to be making inroads into the commercial space sector.
Military Space
Concerns over the weaponization of space with anti-satellite missile launches conducted by China, Russia and India has led to U.S. forming a new military branch of service-The Space Force. The US Space force became official in 2019 and other countries like France have announced that they will be organizing a space force as well. More emphasis on military space applications will revitalize the military satellite market which has been declining in the last decade.
Challenges
While there appears to be much cause for optimism for the satellite industry in this new decade, the road is fraught with challenges as well.
Analyst Roger Rusch, CEO at TelAstra said that terrestrial growth from fiber and wireless is threatening future growth of the satellite sector. “The wireless and fiber providers are more agile at introducing new technology and expanding throughput into more remote regions. They provide service for much lower cost when available in urban regions,” said Rusch. Terrestrial operators will be actively pursuing the very same markets that satellite providers will be going after such as broadband internet, IoT, M2M, etc. The ability of satellite service providers to obtain as much of the market share in these key verticals would be crucial.
The resulting proliferation of satellites in various orbits pose a set of challenges as well. For one, more satellites have resulted in in lowers prices and dropping revenues for satellite operators. Satellite operators and service providers should maximize the potential in the key verticals in order to supplant the revenue losses from traditional sources like video. The satellite industry should also focus on the areas where it has little competition from terrestrial such as in the maritime and in-flight connectivity markets, among others.
The influx of thousands, perhaps tens of thousands more satellites of various sizes--mostly very small nano satellites and cubesats--will result in more orbital debris posing a risk to operating space assets. In the vacuum of space, even a very small piece of orbital debris travelling at 17,000 miles per hour can disable an operating satellite. Thus there is a need to address this problem on a global scale and find workable solutions for clearing orbital debris.
Conclusion
It would be a very interesting decade, to say the least, for the satellite industry. The forthcoming changes in the in the composition and complexion of the industry will make it almost indistinguishable from the industry that started in the middle of the last century. How the industry will shape up in the next decade would largely depend on its ability to take full advantage of the opportunities before it and surmount the accompanying challenges. Knowing the resilience of the industry over the years, it should make for very exciting times.
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Virgil Labrador is the Editor-in-Chief of Los Angeles, California-based Satellite Markets and Research which publishes a web portal on the satellite industry www.satellitemarkets.com, the monthly Satellite Executive Briefing magazine and occasional industry reports called MarketBriefs. Virgil is one of the few trade journalists who has a proven track record working in the commercial satellite industry. He worked as a senior executive for a teleport in Singapore, the Asia Broadcast Center, then-owned by the US broadcasting company CBS. He has co-authored two books on the history of satellite communications and satellite technology. He holds a Master’s in Communications Management from the University of Southern California (USC). He can be reached at virgil@satellitemarkets.com
