The UK Space Industry at a Crucial Crossroad
by Elisabeth Tweedie
London, UK, March 1, 2021--The United Kingdom (UK) has always been home to companies working in various parts of the space and satellite ecosystem.
From Novella Satcoms in Horsforth, West Yorkshire, which has been supplying high performance RF equipment and solutions for satellite earth stations and CATV systems since its founding in 1997; to Inmarsat, founded in 1979 as an intergovernmental organization for the maritime industry, privatized in 1999 and now listed on the London Stock Exchange. Inmarsat has 14 satellites on orbit, providing service to 160,000 maritime vessels and 17,000 aircraft. From Surrey Satellite Technology Ltd. (SSTL), spun out from Surrey University nearly 30 years ago, and acquired by Airbus in 2009; to Goonhilly, home of some of the world’s most memorable transmissions. SSTL has built 69 satellites for all orbits, and also runs a spacecraft operations center. Goonhilly’s earth station received the first ever transatlantic broadcast in 1962, a speech by then US President Kennedy. Seven years later, Neil Armstrong’s first steps on the Moon were broadcast from there, to a global audience of around 600 million. Now Goonhilly has multiple antennas providing access to satellites in all orbits. While all of these are very obviously British companies, until recently, space per se, has been neither a point of national pride, nor something one would particularly associate with the UK.
The UK space industry is facing a crucual crossroad. The industry must face the challenges of a post-Brexit and post-pandemic world with increasing competition and pressure from countries with greater ambition and resolve to developed their space resources and capabilities.
The UK space industry is facing a crucial crossroad. The industry must face the challenges of a post-Brexit and post-pandemic world with increasing competition and pressure from countries with greater ambition and resolve to developed their space resources and capabilities.
UK’s Space Ambitions
The seeds of change were sown just over ten years ago when the UK formalized its ambitions in space, with the publication of the “Space Innovation and Growth Strategy.” Following the publication of that report several new organizations, focusing on space including: The UK Space Agency, Satellite Applications Catapult and the Space Leadership Council came into being. Not to be confused with the UK Space Agency, is UK Space, a trade association that has been in existence since 1990.
The UK’s ambitions were further formalized in 2014 with the publication of the “UK Space Growth Action Plan 2014-30.” This plan set the target of obtaining a 10% share of the projected £400 Billion (US$554 Billion at current exchange rates) global space-enabled market by 2030. An interim target of accounting for £19 Billion (US$26.3 Billion) by 2020 was also set. Part of this goal is to be accomplished by increasing the export market from £2 Billion (US$2.8 Billion) to £25 Billion (US$28.5 Billion). Accompanying the goal of accounting for 10% of the market, is the equal goal of the creation of 100,000 new jobs. Britain isn’t quite there yet. Revenue at the end of last year was £15 Billion (US$20.9 Billion) and the sector employed 42,000 people.
However, important as all this is, none of it brought space to public attention in the UK, as much as Tim Peake’s flight to the International Space Station in December 2015. Peake was in fact Britain’s first European Space Agency (ESA) astronaut.
Fortunately for the UK, ESA is not a European Union (EU) institution. Norway and Canada are also participants, therefore the UK’s membership remains intact. Therefore, ESA’s European Centre for Space Applications & Telecommunications (ECSAT) remains at Harwell in Oxfordshire. ECSAT is the headquarters of ESA’s program of Advanced Research in Telecommunications Systems (ARTES). Other activities include the development of new satellite-based services and applications, and the Telecommunications and Integrated Applications directorate, whose brief is to keep European and Canadian industry at the leading edge of satellite communications and applications.
Brexit Implications
Unfortunately for the UK, Galileo, the European Global Navigation Satellite System (GNSS), is an EU venture. This means that in spite of investing £1.2 Billion (US$1.7 Billion) in the system, the UK no longer has access to the Public Regulated Service (PRS) — a secure, encrypted signal designed to be used by governments and the military. The regular service, which has already been built into many smartphones and satellite navigation systems, will be available to all, in the same way that the less precise part of the US GPS system is. The decision to exclude the UK from accessing this part of the signal, is a particularly hard blow for the UK in several ways. Firstly, without the help of SSTL, Galileo may have lost its frequency rights, so would never have come into existence. SSTL built and launched a small satellite Giove-A at the end of 2005 in order to make the mid 2006 deadline, to secure the frequencies; secondly, SSTL has built the payloads for all 34 satellites in the constellation, and thirdly the UK is one of the larger investors in the constellation. As if all that wasn’t hard enough to swallow, a lot of the brain power that developed the precise signal for PRS, was British. Nevertheless, losing access is part of the price of Brexit. Similarly, the UK lost access to the European Geostationary Navigation Overlay System (EGNOS).
Britain’s exit from the EU was a rude awakening. According to Graham Turnock, the retiring CEO of the UK Space Agency: “it provided a real stimulus to get us to think about what we actually need as a country in space.”
The initial response from the UK to being shut out of Galileo, was to allocate £92 Million (US$128 Million) to study building its own independent system. Given that at a minimum, it would cost several billion Pounds Sterling (£) to build a competing GNSS, (Galileo has cost around £10 Billion (US$13.9)) this was a tall order for a nation the size of the UK.
Last September the Department for Business, Energy and Industrial Strategy (BEIS) said that the study would shift focus to “consider newer, more innovative ideas of delivering global satellite navigation and secure satellite services to meet public, government and industry needs.” In October the Space-Based Positioning, Navigation and Timing (PNT) Program was launched by the UK Space Agency. There is a clear nationalist drive for the UK to be become independent in this area and not dependent on the US or any other nation’s GNSS system. Nonetheless, there is a recognition that collaboration will be needed and Requests for Information (RFI) have been sent to 170 organizations in the UK and other Five Eyes countries (USA, Canada, Australia and New Zealand).
Investment in OneWeb
This change of direction, may have been prompted at least in part, by the £400 Million (US$556 Million) investment that the government decided to put into OneWeb last July. OneWeb, is a low earth (LEO) constellation, designed to provide broadband service. Nevertheless, the potential to use the constellation for satellite navigation was one of the rationales given for the investment. Judging from the comments in the British press, there is little doubt that the investment was driven more by politics than by sound business analysis. With the resumption of launches at the end of last year, OneWeb now has 110 satellites in orbit. The initial constellation needed for global service is 648 satellites, but OneWeb has a filing for a total of 6,372 satellites (this is a recent reduction from the ~48,000 filed for in May 2020, two months after filing for Chapter 11 bankruptcy in the US). It is almost inevitable that further investment will be needed before the constellation is fully operational as a broadband system and the ground infrastructure complete. There is speculation that OneWeb may move the manufacturing of its satellites from Airbus Florida to Airbus in the UK, but given that the Florida plant was built specifically to manufacture those satellites, this cannot be a foregone conclusion. OneWeb, initially had first mover advantage, but it has now lost that, as Musk’s Starlink constellation is already providing a beta commercial service in parts of the US, Canada and the UK. Putting a navigation payload onto the communications satellites, is a different proposition altogether. Opinions are divided, a few believe that it can be done, most, including some in the UKSpace Agency feel that it cannot be done, or, the cost of adding an additional payload will be so great as to completely kill the business case for the investment - assuming, of course, that one exists.
Britain’s ambitions in space are not confined to OneWeb, nor to finding an independent solution to satellite navigation. It has also recently put an unspecified sum into Isotropic Systems, as part of a funding round that raised over US$40 Million for the company. Part of that money will be used to open a 20,000 square foot technology and testing facility near the company’s headquarters in Reading in the UK. Commenting on this investment, Amanda Solloway, UK Science Minister said: “The UK space sector is thriving and with connectivity never having been more important, it’s vital we support pioneering companies like Isotropic Systems who are tapping into the benefits that space technology can bring us all on Earth. Backed by UK government, these new multi beam antennas will improve connectivity for us all at home, and for emerging technologies such as driverless cars, while helping to create 150 highly skilled UK jobs as we build back better.”
The UK as a Space Hub
The country is also pursuing investments in Spaceports and SpaceHubs. Ian Annett, Deputy CEO, UK Space Agency said: “We want the UK to be the first in Europe to launch small satellites into orbit, attracting innovative businesses from all over the world, accelerating the development of new technologies and creating hundreds of high-skilled jobs across the whole of the UK.” The rapidly proliferating market of smallsats and cubesats, all of which have far shorter lifespans than traditional large geostationary satellites, is driving a new market for cheaper launches to lower orbits, so creating the opportunity for new players to enter the launch market.
The first vertical launch is scheduled for 2022 from the new Shetland Space Center (SSC) in Unst, Britain’s most northerly island. Last October Lockheed Martin announced that it was transferring its UK Pathfinder launch base to SSC, and since then has selected ABL Space Systems’ (a US company based in California) rocket for the launch. Once in orbit the rocket will release a small launch orbital maneuvering vehicle, which can carry and deploy up to 6U cubesats. Sutherland, also in Scotland is the site of another vertical launch pad. The first customer here, is expected to be Orbex. Several other sites are also under consideration in Scotland
At the other end of the country, Spaceport Cornwall, will be a horizontal launch site. The first launch is targeted for spring of 2022. This will use
 |
| An artist’s rendition of Spaceport Cornwall which plans to host satellite launches from Virgin Orbit starting in 2022 from the Cornwall Airport Newquay. (image courtesy of Virgin Orbit) |
a Virgin Launcher, similar to Launcher One, a rocket attached to the underside of a modified Boeing 747, that was launched in the Mojave Desert in California earlier this year. Once separated from the 747, the Launcher One rockets carry small satellites into low earth orbit.
The government is also investing in space “hubs”. These will be funded by government and local authorities, with the aim of bringing together expertise to support a range of cutting-edge aerospace and space activities. £250 Million (US$347 Million) has been invested in one of the first of these hubs in Ayrshire, Scotland. Part of this investment will be used to create a (horizontal) launch site at Prestwick Airport and to create a cluster of industry in the area for activities related to all parts of the value chain.
The British government is also placing an emphasis on education, and at the beginning of this year the Space Engineering Technician apprenticeship scheme was launched. This apprenticeship will provide trainees with space-specific technical skills, including spacecraft manufacturing and design, testing and satellite integration. It is hoped to recruit 50 trainees this year and more in the years to come. However, this is not the first apprenticeship for the space industry. Airbus has been providing apprenticeships in space manufacturing for the last 30 years.
Following Brexit, Britain’s ambitions in space have assumed increasing importance and are becoming a point of national pride. Interestingly, in spite of all this attention, or maybe because of it, the UK Space Agency has just lost a large part of its remit. Responsibility for launch site development and space strategy has been moved to BEIS. Some speculate that this is as a result of the Agency raising questions about the viability of the OneWeb investment, but this has been denied by the government.
Will the UK succeed in becoming a major player in the space market? That remains to be seen. It is behind in the targets that it set for itself; but given that the 2020 target of £19 Billion of the global space enabled market was set, pre-Brexit and pre-Covid, allowances have to be made.
There is undoubtedly a market for launches for small satellites, and right now the UK looks poised to be the first country in Europe to address that market; but that advantage is unlikely to last, and Brexit may dim European operators’ willingness to launch from the UK. It’s also hard to imagine that customers will want to ship small satellites from North and South America or Asia, to the UK for launch, unless it is offering a significant price advantage. So, the success of this market will depend to a large extent on local production of small and cube satellites. The UK has made space a priority and has demonstrated its willingness to invest not only in new ventures, but also to try and create the appropriate environment and incentives to grow new space related businesses, if it is successful, the market could grow to be large enough to support multiple spaceports.
Unfortunately, there is also the very real possibility that OneWeb will turn out to be a complete white elephant, devouring a large portion of the UK’s space budget.
No Country is an Island
The UK may be an island, but when it comes to space, no country is an island. Space is truly a global industry and competition in every part of the value chain can come from anywhere in the world.
The UK may have classified space as one of 13 critical national infrastructures; but as Rupert Pearce, former CEO of Inmarsat, pointed out in a recent op-ed in the Daily Telegraph: without more investment, focus, cooperation and education it will not be possible to stand up to the space “superpowers,” the USA, Russia and Japan, nor to the other countries currently focusing on expanding their space industries: France, Germany, the UAE, Japan, Australia. While more investment and government incentives would undoubtedly help the industry, it must be remembered, that the UK is currently not only dealing with the costs associated with Brexit, but also like most of the rest of the world, with the economic impact of Covid-19. Right now, at close to £300 Billion, (US$422 Billion) the country is running the largest deficit since the second world war. So, the question really becomes one of how important is space is to the government at a time when there are so many compelling and competing needs for resources?
-----------------------------
Elisabeth Tweedie has over 20 years experience at the cutting edge of new commmunications entertainment technologies. She is the founder and President of Definitive Direction (www.definitivedirection.com), a consultancy that focuses on researching and evaluating the long-term potential for new ventures, initiating their development, and identifying and developing appropriate alliances. During her 10 years at Hughes Electronics, she worked on every acquisition and new business that the company considered during her time there. She can be reached at etweedie@definitivedirection.com
