by Jeff Foust, Ph.D.
Senior Analyst, Futron Corporation
The market for commercial launches of satellites to non-geosynchronous orbits (NGSO) is very different from the market for launches of geosynchronous orbit (GSO) satellites. In the case of the latter, the market is comprised almost exclusively of commercial communications satellites, a relatively mature market that, while cyclical, is not prone to huge swings in demand.
In comparison, the commercial NGSO launch market consists of several sectors, only one of which is communications. The market has also experienced a great degree of volatility in the last decade, from the boom in the late 1990s driven by the deployment of systems such as Iridium and Globalstar, to the bust in the years that followed when launch demand almost completely dried up, as Figure 1 illustrates
There are indications of a renaissance in the commercial NGSO launch sector. Satellite systems deployed during that earlier boom are nearing end of life and will be replaced over the next several years. This will stimulate launch demand. Other market sectors, from remote sensing to government missions, are continuing to use commercial launches for new and replacement spacecraft. Moreover, new markets are emerging, from resupply of the International Space Station to space tourism that could, over time, generate substantial additional launch demand. While we may not see a return to the NGSO launch boom of a decade ago, we instead may see a steadier — and, ultimately, healthier — increase in NGSO launch demand over the next decade.
Communications
The surge in commercial NGSO launches in the late 1990s was primarily due to the deployment of three communications systems: Globalstar, Iridium, and ORBCOMM. At that time, these systems were seen as pioneers of a new wave of satellite communications. Many other similar systems — Teledesic, Skybridge, and Ellipso, among others — were under development and would continue and even grow the demand for such launches. However, faced with stiff terrestrial competition and the end of the telecom boom, those three pioneering companies all filed for bankruptcy protection. The other, proposed systems never materialized, virtually eliminating launch demand in this sector.
Today, Globalstar, Iridium, and ORBCOMM have all emerged from Chapter 11 and are taking on a new challenge: replacing their existing systems that are nearing the end of their lives. These companies have either signed manufacturing contracts for their new satellites, or are in the process of selecting a prime contractor.
In the case of Globalstar, the company has already signed a launch contract with Arianespace for at least four Soyuz missions from Kourou, French Guiana. Provided these companies can remain in good fiscal health and raise the money needed to deploy these replacement systems (not a certainty in today’s markets) these systems could generate demand for 20 or more launches in the next decade, depending on the deployment schedules decided upon.
There are also signs of new entrants into this market. In September, O3b Networks announced plans to deploy a constellation of 16 satellites in an equatorial medium Earth orbit, starting as early as 2010. The company still needs to raise a significant amount of capital to make this system a reality, but it does have the backing of several major companies, including Google, HSBC, and Liberty Global. If O3b is successful, it might attract additional interest from new players to the NGSO communications market, stimulating additional launch demand.
Remote Sensing
The commercial remote sensing industry, after struggling for several years, is now far more robust, thanks to a combination of industry consolidation, government support, and growth of commercial markets. This has resulted in an uptick in launch demand in this sector. The two major U.S. companies, DigitalGlobe and GeoEye, have launched their first second-generation satellites, funded in part by the National Geospatial-Intelligence Agency’s NextView program; they are also developing additional spacecraft using only private funding for launch in the next few years.
There is also some growth beyond high-resoltuion imagery outside the U.S. In August, German company RapidEye launched its constellation of five satellites that are designed to provide medium-resolution imagery. Infoterra and MacDonald, Dettwiler and Associates (MDA) launched radar imaging satellites in 2007 and they also have plans for additional spacecraft over the next few years. These developments all suggest there will be continued modest, but steady, demand for commercial launches of remote sensing spacecraft through the next decade.
Additional and Emerging Markets
With the communications market in stasis and remote sensing solutions providing only limited demand, what has sustained the commercial NGSO launch field for the last several years has been an ad hoc market of primarily government and university-built small satellites that procure commercial launch services, often manifesting several satellites on a single vehicle. Much of this demand comes from nations with emerging space programs who do not possess indigenous launch capability. These nations go to the commercial market for their satellite launches.
Additional demand also comes from European governments looking for vehicles better suited to launch smaller satellites. The Ariane 5 is too large for such spacecraft, but that situation may change once the Vega launch vehicle enters service. As more countries seek to establish space programs, and as interest in smaller satellites in general increases, this level of launch demand is likely to continue for the near future.
An interesting — and potentially significant — new market for commercial NGSO launches is emerging: delivering cargo and crews to, and helping assemble, orbiting space facilities. NASA is currently supporting the development of spacecraft and launch vehicles by Orbital Sciences Corporation and SpaceX under its Commercial Orbital Transportation Services (COTS) program. There are plans to procure services to transport cargo and, eventually, astronauts to and from the International Space Station (ISS) in the near future. (Recent geopolitical events could force NASA to accelerate those efforts, particularly if access to Russian vehicles is cut off.)
In addition, a private company, Bigelow Aerospace, has plans to develop its own orbital complexes using inflatable modules; the company has already launched two subscale demonstration modules, Genesis 1 and 2, in 2006 and 2007. Those complexes will create demand for the launch of their components as well as for cargo and crew services, such as those planned for the ISS. This could, over the next decade, create a sizable new sector of the commercial NGSO launch market, possibly larger than any existing segment.
Conclusions
In support of work for the FAA Office of Commercial Space Transportation, Futron has analyzed the trends in these various market sectors and developed a forecast for future commercial NGSO launch activity, shown in Figure 2. This is intended to be a somewhat conservative forecast: more speculative systems and applications have been left out of the forecast, in an effort to avoid the “irrational exuberance” of some past forecasts.
The forecast shows an average of more than 11 commercial NGSO launches a year over the next decade. More importantly, the forecast shows a relatively steady level of activity, without the sharp peaks and sudden drops in activity that have taken place over the previous ten years, as Figure 2 shows. This may be a sign that the commercial NGSO launch field is finally starting to mature into a more stable market similar to the commercial GSO launch market: a successful development for the overall space industry.
About the author
Jeff Foust is a senior analyst and project manager with the Futron Corporation of Bethesda, Maryland, and has been with the company since late 2001. He investigates current conditions and future trends in domestic and foreign commercial, civil, and military launch industries and related markets. He has a Ph.D. in planetary sciences from the Massachusetts Institute of Technology and a B.S. with honors in geophysics and planetary science from the California Institute of Technology. He also maintains several online space resources, including the news aggregator Spacetoday.net and the weekly publication The Space Review.
