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Main Trends & Challenges in the Space Sector

2nd Edition

December 2020 Version 1.7 – Updated 05/03/2021 Introduction 05

Major trends in the space sector 09

Earth Observation 15

Satellite 21

Navigation 25

Access to space 29

Space Situational Awareness 35

Space exploration 37

Space law, regulation & procedures 41 PwC Space Practice PwC dedicated space practice with leading edge insights and global reach

The PwC/Strategy& Space Practice in 5 points Recent publications

Market perspectives of With a global reach, and a dedicated strategy and policy team based in Paris and as a Toulouse, the PwC Space Practice is unique among large firms. It November 2020 1 Provides a comprehensive understanding of combines focused space expertise with a significant reach into the broader downstream. GSaaS, its current context, market and its potential evolution in the future. It explores the market drivers that could impact the The core space team is currently involved in assignments for public and private entities in GSaaS market in the future and assesses 2 and worldwide. their potential impact. Trends and challenges in the space sector Our core team notably works on strategy assignments (e.g. market , go-to-market, October 2020 business plan development, commercial due diligence, etc.), commercial due On the occasion of the Indian International Space Conference, we have published a diligences and support to M&A, socio-economic impact assessments related to public report on the current trends and challenges in investment in space, analysis of governance & organizational structure (at the space sector, with a specific focus of the 3 programme, company or country level) and regulatory analysis (e.g. impact of existing & Indian space . prospective regulations, assessment of regulatory requirements in the cycle market- Resilience of the Space Sector to the regulation, etc.) COVID-19 Crisis April 2020 Learn more With the PwC Data Lab – an entity from PwC specialised in the development of Provides an assessment of the impacts and innovative applications – we provide services (PwC Insights from Space) using space resilience to the COVID-19 crisis of the pwc.fr/space various domains in the space sector. 4 data to public and private decision-makers (often non-familiar with the space-based data derived capabilities). Emerging Space Nations March 2020 The PwC Space Practice is part of the wider PwC and Defence network Provides an understanding of the role of emerging space nations in supporting 5 which is composed of more than 2,000 consultants in the world. sustainable development and economic growth.

PwC - Space Practice - www.pwc.fr/space December 2020 4 Introduction 1. Table of Content/Scope 2. The Space Value Chain 3. Space Market Sizing 4. Trends at a Glance The space sector is driven by complex macro-level dynamics that go beyond simple market forces, requiring an holistic view

A sector with multiple specificities The “Main Trends & Challenges in the Space Macro trends in the Space sector Sector (2nd Edition)” provides PwC Space Practice views on major trends and dynamics Space domains trends impacting the civil and commercial space sector globally. • Multiple domains with different trends and specificities The document is organised into 8 sections: an Observation introduction to macro trends impacting the • An ever evolving regulatory and policy environment space sector; 6 dedicated chapters per space Satcom domain; and a closing section on governance, • A significant reach and policy and regulation. implications into other industrial sector, with subsequent dependency on general macro- Disclaimer on Scope Access-to-space trends The present document focuses on civil and • Considerable wider societal and commercial space, only providing some minor Space Situational economic impacts, justifying the pointers touching space. Awareness still prevalent government As such, it should not be considered comprehensive or spending in the sector representative of trends related to military space and defence. A separate piece of thought leadership dedicated to space and defense is currently being prepared by PwC. Governance, policy and regulation

Source: PwC analysis ; Image : CNES, , NASA PwC - Space Practice - www.pwc.fr/space December 2020 5 Introduction 1. Table of Content/Scope 2. The Space Value Chain 3. Space Market Sizing 4. Trends at a Glance Space is experiencing significant mindshare growth, as well as increasing implications in multiple downstream industries

Upstream Downstream End users Key take-aways

Technology push – Applications • The space value chain is System & Data & Advanced products Operation evolving, with the traditional infrastructure Processing & services upstream driven push User demand pull – Services (upstream creates new applications for the downstream market to follow) transitioning into Launch systems and Data and services (-to- Consumer, industry, a market demand pull governments, non-profit Satellite AIT and home, broadband, navigation, etc.) (downstream drives space organisations systems development with needs Ground segment systems and network Value-added services A variety of sectors (, for new services) equipment (e.g. gateways, VSAT, etc.) User equipment (e.g. GNSS devices and infrastructure, , • Space has attracted an important Launch service provision, satellite and chipsets, TV dishes, receivers, marine, defence and , etc.) number of actors in the past ground segment operation Location-Based Services, etc.) decades, with New Space and non-space companies entering Example of companies (non-exhaustive) Example of companies (non-exhaustive) Examples (non-exhaustive) the different streams of the value chain • Space retains its status as a halo sector, with positive impacts and spillovers over a large pool of end users, in the global economy

Source: PwC analysis Source: PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 6 Introduction 1. Table of Content/Scope 2. The Space Value Chain 3. Space Market Sizing 4. Trends at a Glance Sizing the global space economy is a complex exercise due to the lack of a unified taxonomy and difficulties in setting up boundaries

Measuring the space economy Sources Market estimate Notes on the assessed perimeter and granularity

• Upstream (USD 23 Bn): launch services; satellite manufacturing • Midstream (USD 40 Bn): ground infrastructure & operations; fleet ops • Space is not recognised as a category in international USD 371 Bn • Downstream (USD 226 Bn): consumer equipment, space services (2020) standards of industrial classification. Therefore, worldwide • Institutional budgets (USD 82 Bn): research & ; space market sizing studies differ in definition, coverage and exploration; military; etc.

methodology. This makes it difficult to compare the results Source: PwC, 2020 in global estimates. • Commercial revenues (USD 336.9 Bn): • The boundaries between space and non-space activities • Space infrastructure (USD 119.2 Bn); USD 423.8 Bn are often blurred, leading to different ways of assessing the • Space products & services (USD 217.7 Bn); (2020) overall space economy. This is specifically critical when • Governmental spending (USD 86.9 Bn). setting the boundary between the downstream space Source: , 2020 industry and end-user economy: as the analysis moves down the value chain, the assessment of the direct causal • Satellite Services (USD 123 Bn): , , relationship (called paternity) between the science & national security; and the benefits brought to end-users become complex • Ground Equipment (USD 130.3 Bn): network & consumer equipment; USD 366 Bn • Government Space Budgets & Commercial to isolate and accurately measured. Indeed, benefits (2019) derived from space tend to only represent a tiny part of the (USD 95 Bn): non-satellite industry; value created for end-users. • Satellite Manufacturing (USD 12.5 Bn); • Launch Industry (USD 4.9 Bn). • Given the above, when considering global and regional Source: Bryce, 2019 figures related to space market sizing, it is extremely important to understand what they encompass in their This figure refers to commercial revenues only: • Upstream (USD 8 Bn): satellite manufacturing, satellites launch, ground perimeter. USD 298 Bn (2019) equipment manufacturing; • Downstream (USD 290 Bn): satellite operation, services.

Source: Euroconsult, 2018 PwC - Space Practice - www.pwc.fr/space December 2020 7 Introduction 1. Table of Content/Scope 2. The Space Value Chain 3. Space Market Sizing 4. Trends at a Glance Cross cutting macro-trends and main trends per domain at a glance

Macro-trends impacting the space sector transversally Overview of trends in space domains (focus on civil and commercial space)

While the EO domain remains geared towards defence and security COVID-19 Digital Drivers Earth markets, an increasing demand from a diversified pool of customers is leading the rapid evolution of Earth Observation, with more supply from The COVID-19 crisis has mainly impacted Observation Companies that are combining multiple digital new entrants, and innovative delivery models for data and analytics to operational and manufacturing activities during such as Cloud, Artificial support situational awareness. country-wide and partial lockdowns. These Intelligence, Additive Manufacturing or resulted in programme delays and financial Demand from new market segments (mobility, IoT, M2M and ubiquitous Blockchain tend to have a high competitive strain on small and medium enterprises. Satellite connectivity) is transforming the satcom domain. LEO-based advantage in the sector. These technologies Heavily tied to institutional budgets, the space communication systems and new types of antennas are being deployed to give rise to more scalable and innovative sector is expected to be impacted by changing address market needs. business models with more customer-oriented government priorities and agendas, with approaches, and push for the democratization GNSS alternatives from GPS have come to maturity in the recent years, sizeable knock-on effects from other industrial leading to the uptake and growth of the downstream market offering of the access to the space sector. Navigation sectors. numerous PNT solutions. Space-Based Augmentation Systems (SBAS) are increasingly deployed worldwide. Defence programmes Broader Public Policy The launch market is experiencing a drive towards reduced cost to , Access to and shows increasing competition at global level, while still retaining a While defence has always been one of the Institutional actors are expected to take a Space significant captive nature at a regional level. Sovereign interest in launch drivers for space activities, we see leading role with the definition, update and capability is becoming widespread new types of malicious threats and implementation of their space policies to foster Increased space activities and traffic are leading to the need to conceive demonstration of sovereignty driving an economic growth and to face upcoming SSA/STM and implement Space Traffic (STM) system(s) to sustain the increased militarisation and weaponization of challenges such as the sustainability of the . space. This manifests itself with the launch of space environment. In addition, the renewal of dedicated defence units to ensure space several major space programmes, towards Numerous new actors, both institutional and commercial, show interest in sovereignty and surveillance. Examples green economy for example, is expected to Space manned missions to LEO (mostly in the frame of institutional missions, while include the US and the French create new opportunities for space-based Exploration the commercial sector is closely examining the business case of Space Commandement de l’Espace. applications and services. Resource Utilization (SRU). A lunar economy is under consideration.

PwC - Space Practice - www.pwc.fr/space December 2020 8 Macro Trends in the Space Sector 1. COVID 19 2. Digital Technologies 3. New Business Models 4. Institutional Trends Space domains and subsectors each show a different level of resilience to the impacts of the COVID-19 crisis

Overview of the main impacts of the COVID-19 crisis on the Space sector Resilience of space domains to COVID-19

The COVID-19 crisis has provoked the slow-down of the majority of High operational activities along the value chain. Manufacturing facilities have put Direct operational impacts their activities on hold and launches have been delayed due to the Telecommunications interdependence between actors and their global footprint. With sustained delaying the supply chain High SSA/SST demand for satellite services, mission operations have been preserved and resilience facilitated through remote working. Access to Space/Launch systems

Most prime integrators have defined measures to mitigate the financial impact Navigation of the crisis, whereas small/medium enterprises, including critical sub- Medium Financing issues hindering component suppliers, are facing cash flow difficulties due to the delayed and Earth observation cancelled orders. Start-ups are exposed to liquidity dry-ups and increased resilience business continuity financing risks driven by a heavily impacted global economy. The business Satellite manufacturing continuity of these players is jeopardised by the prospected outlook of the financial markets. Low Space exploration resilience Heavily tied to institutional budgets and overall wider public agendas, the space sector is expected to be impacted by changing government priorities Expected to result in wider and agendas. Public institutions and governments play a prominent role in Low impacts at public policy shaping the space industry by placing orders and implementing large space and procurement level programmes. Driven by reshuffled priorities, the revision of institutional Learn more on PwC’s insights on the impacts of budgets could be expected to lean towards decreased envelopes for space COVID-19 on the Space sector programmes.

Source: PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 9 Macro Trends in the Space Sector 1. COVID 19 2. Digital Technologies 3. New Business Models 4. Institutional Trends Digital technologies are enabling reduced costs, faster production and diversification of business models

Space 4.0 Digital technologies enable new manufacturing methods

Space 4.0 is similar to the concept of Industry 4.0, highlighting the impact of the so-called “fourth industrial Additive manufacturing (AM) methods have led to reductions in revolution” of manufacturing and services. Companies that are combining multiple digital technologies such as cost, weight and production time of space assets and is the Cloud, Learning, and Blockchain are developing a strong competitive advantage in the sector, stepping stone for in-. impacting both upstream and downstream parts of the space value-chain. The 3D market for space applications is forecasted to top USD 5.5 Bn in value by 20271 . Employing cloud computing bypasses the need for hardware and software , opening up the AM has enabled of production in companies market to startups and allowing companies to due to the low-volume, high-value nature of the space sector, provide ground stations as well as full turnkey These technologies give rise to more solutions as a service. decreasing costs and eliminating reliance on . On scalable and innovative business the other hand, an increase in mass production and models that are democratizing access , and miniaturization of electronics has led to an Machine learning facilitates the extraction of to the space sector. increase in the development and use of COTS components actionable insights from large amounts of data, and globalization of supply chains. automation of repetitive processes, and extends Users are seeking effortless access to the use of space-based applications to new insightful outcomes from space data. markets. Diversification of business models is Blockchain can employ token-based financing for allowing for a more customer-oriented Research shows that the top 19% of companies in the space missions as well as start-up funding to ease approach. aerospace and defence sector that have significant the barrier of entry. It also offers transparency in investments in digital technologies consequently achieve supply chain management, efficient procurement higher than average returns on these2. processes, and secure satellite communication

Source: ESA; PwC analysis, OECD, 1SmarTech , 2Accenture PwC - Space Practice - www.pwc.fr/space December 2020 10 Macro Trends in the Space Sector 1. COVID 19 2. Digital Technologies 3. New Business Models 4. Institutional Trends Ground Segment as a Service (GSaaS) contributes to lowering barriers to entry in the space industry

Ground Segment as a Service (GSaaS) concept GSaaS current supply and demand GSaaS market perspectives

Ground segment activities require significant investment GSaaS supply is made of half a dozen actors… The customer base could be enlarged • Ground segment activities require expertise, infrastructure and resources, New satellite operators (e.g. military entities, both human and financial emerging space agencies) and customers with • Difficult for satellite operators to invest in a wholly dedicated network other mission types (e.g. low latency applications, Regulation aspects require time and effort deep space and lunar missions) could contribute to • Licensing needed to build and operate a enlarge the GSaaS customer base... • Complex procedures to follow (i.e. lack of clarity/transparency), fees, etc. To answer to such customers, the supply will • Can cause delays in satellite operators business development have to offer adapted services (e.g. enhanced security, data processing/ analysis, consulting Ground segment services were not adapted to New Space operators services etc.), notably leveraging on • Costly and complex premium solutions from incumbents adapted for and technologies: satellite operators with demanding requirements • Partnerships with specialised companies in • New Space satellite operators have different needs (e.g. smaller satellites) … supplying services to a variety of users specific domains (e.g. to offer better security) or with ground suppliers (e.g. to expand ground Trends in GSaaS users stations coverage) Mutualising ground infrastructure (e.g. ground stations, data storage), GSaaS enables Mission type EO, of Things (IoT) different satellite operators access a single network of ground stations, together with • Technologies like Artificial Intelligence, benefits including: Customer type Mostly private and some public users Electronically Steered Antennas, Optical • Flexibility: possibility to have on demand or reserved contacts communications and Inter-Satellite Links could Orbit type LEO satellites mostly • Cost-effectiveness: pay as you use or subscribe on a monthly/yearly basis enhance satellite communication performance on the ground and in space • Simplicity: easy-to-use API and interfaces

Switching CAPEX to OPEX, GSaaS allows satellite operators Learn more on our Paper on Ground Segment as a Service to focus on the core of their business: data Non-exhaustive list Source: PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 11 Macro Trends in the Space Sector 1. COVID 19 2. Digital Technologies 3. New Business Models 4. Institutional Trends While always strongly tied to defence, Space sees its relevance growing as a component of defence programmes, with space sovereignty key for an increasing number of nations

The strategic dimension of space Evolving National Space Strategies and Governance

The Space Force was created in 2019 as a new branch of the US Space assets are an essential component of the infrastructure and armed forces dedicated specifically to orbital and space defense. Space assets play a backbone enabling military activities and operations. Examples The Space Force is focused on train, , and equipment of key role in military include the use of satellites to allow secured communications, the missions that are to executed by the US (re- activities collection of earth observation to perform intelligence activities, and established in 2019), in turn in charge of the operations (space the support from to conduct drones operations. The US Space Force observation activities, surveillance and tracking potential threats that and US Space could jeopardize the network of US space assets). The foreseen Command budget dedicated to the US Space Force in 2021 is USD 15.4 B*.

The development of offensive space assets designed to eavesdrop, The space jam or disrupt satellites capabilities is increasing. In response to Following the announcement of its space strategy for national environment is these increasing threats, nations are developing capabilities to defence, France launched its Space Command which will lead and targeted by observe, prevent and counteract these attacks. These coordinate the country’s enhancement of its space surveillance and increasing countermeasures are materialized by increased space observation observation means and the development of self defence means. The capabilities and the development of more resilient space systems is expected to be supported by a budget of malicious threats The French Space EUR 700 M over the 2020-2025 period. (e.g. quantum communication) Command

In 2007, conducted an anti-satellite test using a kinetic kill on its own satellite -1C. More recently, in 2020, Space militarization Driven by the need to protect its rapidly growing architecture of conducted a similar test targeting a LEO satellite. So far, only is used as a space systems, China has increased its military capabilities related few nations (USA, , China and India) have demonstrated the to space. In 2015, China created the Strategic Support Force which sovereignty capability to potentially neutralize a foreign . But other demonstration tool aims at fostering synergies between China’s military components in nations are expected to acquire this capability to prevent such China’s Strategic space, cyber and electronic warfare. scenarios from occurring, and to establish ways to counterattack. Support Force

Examples, non-exhaustive - Source: PwC analysis ; * Space.com (it includes administrative costs) PwC - Space Practice - www.pwc.fr/space December 2020 12 Macro Trends in the Space Sector 1. COVID 19 2. Digital Technologies 3. New Business Models 4. Institutional Trends

A zoom on Europe The institutional civil space budget in Europe is split between the EU Space Programmes, the and national space budget

European Commission European Space Agency (ESA)

Multiannual Financial Framework (MFF) (2021 – 2027) ESA Ministerial Space+19: Budget 2020 – 2024 EUR 14.8 Bn (including EUR 12.5 Bn over the period 2020 – 2022) EUR 14.4 Bn EU Member States (EU MS) (27) ESA Member States (MS) (22) + 3 countries with specific agreements with ESA

Associate Czech States Bulgaria Cyprus Czech Denmark Estonia Finland Austria Belgium Denmark Estonia Finland France Republic Republic

Canada Slovenia Latvia France Germany Greece Hungary Latvia Lithuania Hungary Ireland Italy Luxembourg Poland Portugal

: Country not part of the United Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden Kingdom Budget among the EU Flagship Budget distribution among the main space domains Programmes

Earth Space Space Space Basic Others Telecom. Govsatcom Observation Transportation Exploration Activities (space safety, Navigation, 9.01 Bn 5.42 Bn 0.44 Bn Science Technologyx,, etc.) SSA 2.54 Bn 2.24 Bn 1.95 Bn 1.67 Bn 1.51 Bn 0.8 Bn 3.69 Bn

The EU Space budget is based on the contribution of EU Member States. Main MS’s contributors to ESA overall budget Nevertheless, each EU MS has it own national budget for space activities, (% of overall ESA budget over the period) together with a possible contribution to the European Space Agency (ESA) in addition to the EU Space Programme. 1 2 3 4 Germany France Italy UK NB: the financial envelope for the MFF 2021-2027 is based on the update 22.9% 18.8% 15.9% 11.8% performed on 18 December 2020 (3.3 Bn) (2.7 Bn) (2.3 Bn) (1.7 Bn) Source: ESA, ASI, CNES, DLR, UKSA, PwC - Space Practice - www.pwc.fr/space December 2020 13 Macro Trends in the Space Sector 1. COVID 19 2. Digital Technologies 3. New Business Models 4. Institutional Trends

A zoom on Europe The European Green Deal initiative is expected to stimulate the demand for advanced satellite-based applications in the EU Member States for the decade

Green deal societal impacts and associated role of the space sector EO leads the way to sustainability in the space sector

The European Green Deal sets Europe’s roadmap towards a pan-European resilient economy, driving Satellite data can play a critical role in the achievement of the goals incentives to turn climate and environmental challenges into policy and business opportunities. This new EU’s of the EU Green Deal. A significant part of the budget of the Green “climate action plan” will be mobilizing EUR 1,000 bn for the EU economy over the next decade. Deal investment plans is expected to support the space industry, especially related to the development of advanced satellite-based The utilisation of satellite data & information (e.g. , GNSS products and services. Contribution of space data signal, meteorological data, etc.) fused with in-situ data and other sources of data offers a unique capability to monitor the state and change of the in science-based decision- Machine learning applied to satellite imagery can be environment on a global scale, allowing the creation of a digital library of implemented for change detection to protect biodiversity making tools for policy Earth’s evolution. Such continuous monitoring of Earth is allowing to and provide evidences to decision-makers and legislative makers observe and forecast the impacts of human activities on soil, air, and . authorities

Many products and platforms have been funded by the Governments and If the European Climate Law goes forward, it will be transforming EU’s Member EU and ESA over the next decade that could support the can ensure States political commitment into a legal obligation. Advanced satellite-based products & services, more specifically for EO-based applications, would then implementation of the EU Green Deal compliance to become highly critical as support-evidence, opening a major field of activities environmental regulations for certification and standardization Next generation meteorological satellites (i.e. EUMETSAT EPS-SG) and EO satellites (i.e. ESA Aeolus) will improve Europe’s forecasting capabilities for a more efficient use Offers the space industry an of Variable Renewable Energy. to re-evaluate The sector is opting for green propellants for cleaner launch, space removal and regulation, in-orbit servicing missions to extend satellite its practices to become a lifetime, and implementing more sustainable models in system and Learn more on PwC’s identification of the benefits brought by the more sustainable industry, space system both on Earth and in space European Green Deal to the Satellite Services Industry

Source: PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 14 Earth Observation 1. Market Overview 2. Market Trends 3. Institutional Trends The Earth Observation market is rapidly growing with rise in both supply of imagery through NewSpace constellations as well as in demand

Earth Observation Value Chain Key facts and figures

Upstream Earth Observation Satellite •Satellite & The EO market has been growing over the last year USD 5.3 Bn in 2020 manufacturing Manufacturing and integration of thanks to: Including USD 1.5 Bn for •Ground equipment EO satellite and ground systems The impact of manufacturing EO on the • A global growing interest from institutional and upstream and about USD 3.8 commercial players in buying EO satellites Bn for downstream EO space economy • A democratisation of the use of satellite data activities Ground Segment Midstream leading to an increase in demand from end-users Acquisition of imagery, by •Satellite operation operating EO satellites through •Data acquisition Many NewSpace players •Data storage tasking or continuous monitoring • Increasing number of new entrants with incoming vertical integrated business model on the Strong increase Planet, IceEye, Capella Space, Image Processing commercial EO market aiming at EO small Satellogic, SpaceWill or Zhuhai in competition Orbita Aerospace, all targeting Downstream Processing raw imagery into a • Strong pressure on EO data price and push for large-scale small EO satellites diversification constellation. •Data processing usable data format •Data fusion •Algorithms & analytics Value Added Services •Product & services Access to low cloud-storage & computing and an Towards the >20% CAGR for BDA Processed imagery transformed emergence of a increasing volume of satellite imagery at low cost is into advanced products & allowing the emergence of a new type of EO market Estimated CAGR of the services for specific end-users promising EO revenues generated by EO Big based on Big Data analytics & services, unlocking Data Applications (BDA) BDA market new business cases for the next decade End users

Non exhaustive list Energy of vertical domains Defence Agriculture Environment Climate Financial Security Change Services Source: PwC analysis, NSR PwC - Space Practice - www.pwc.fr/space December 2020 15 Earth Observation 1. Market Overview 2. Market Trends 3. Institutional Trends Recent trends are stimulating the demand for EO data while strongly impacting the price of such data, allowing a steady growth for EO-based products & services

DEMAND TRENDS

• Vertical integration of traditional actors (e.g. , Maxar, etc..) aiming at building synergies Increasing • Strong pressure on EO data price between upstream and downstream activities availability of EO • Raising interest/awareness for EO-based products & • New entrants focusing on large-scale constellation of small satellites or focusing on the analytics services, indirectly stimulating demand for EO data data side of the activities, attracting very large private investments

• Responding to new developments in cloud and computing power, new delivery models, based on API • Strong increase in demand for large volume of data (especially for medium and high resolution optical data) Democratisation of (i.e. APIfication), are being developed by the entire market • New delivery models responding to client needs to facilitate access to data, data discovery and to • Commoditisation of basic analytics (e.g. objects the use of EO offer access capacity to very large volumes of data at low cost (i.e. for EO BDA companies) counting, change detection, etc..) • New models enable to switch to subscription and volume-based business models • Unlocking new use cases based on scalability

• Strong and rapid in capabilities to fuse large volume of heterogeneous data sources • Stimulation of the demand in EO data Advancements in (i.e. data with different format), including satellite data with other sources of data (e.g. mobile data, • New opportunities with large BDA companies data fusion social media data, images, video, text, statistics, financial data, etc.) consuming large volume of data capabilities • Explosion of large Big Data Analytics (BDA) market, on which EO data offer an interesting • Growing interest for -based analytics exploiting additional source of data heterogeneous data sources

• Low-cost imagery, cloud storage and cloud computing stimulate the emergence of a fast growing EO • Strong growth in demand for EO data, with recent Big Data Analytics (BDA) market, attracting large private capital important interest in high and very high temporal revisit New emerging • The growth of such a market will stimulate demand in EO data, driving prices down, notably for: (i.e. daily and sub-daily) analytics markets • Long archives of EO data to perform change detection over time for very specific region, especially • Strong pressure on archive prices for MR and HR EO for Medium Resolution (MR) and High Resolution (H), data • Continuous monitoring of very specific AOIs.

PwC - Space Practice - www.pwc.fr/space December 2020 16 Earth Observation 1. Market Overview 2. Market Trends 3. Institutional Trends The changing and growing competition and the impacts of digital trends on EO data distribution business models are reshuffling the EO supply-chain

SUPPLY TRENDS

• Large volumes of EO data freely available from open source programmes such as Copernicus or Landsat • Reduction of barriers to entry for new comers Changing market • Development of large scale EO constellations • Strong pressure on EO data price • Growing interest from governments to build their own EO capacities • Raising interest and awareness for EO-based dynamics • Ground Segment as a Service (GSaaS) offers turnkey solutions to EO satellite operators products & services, indirectly stimulating demand for that wish to avoid investing in dedicated infrastructure, while benefiting from fast and secure EO data data download and processing

• Access to low-cost cloud storage capabilities and powerful low-cost computing power • Strong increase in demand for large volume of data through cloud services (AWS, Microsoft Azure, Cloud, etc.) (especially for MR and HR optical data) • Availability of open source tools & analytics facilitating experimentation and utilization by New delivery models • Commoditisation of basic analytics (e.g. objects non-technical users counting, change detection, etc..) • Important public investments, especially in Europe by the EU and ESA, to support • Unlocking new use cases based on scalability dissemination of EO knowledge (e.g. online free trainings, classes, etc.)

• Switch from direct distribution channel (i.e. selling EO data directly to end-users for expert communities/analysts and/or EO downstream actors) to vertical specialist Value-Added • Stimulate demand in EO data New distribution Services (VAS) • New opportunities with large BDA companies • Raising interest from end-users to access diversified sources of data into one stop-shop consuming large volume of data channels digital marketplaces bringing together different datasets (EO and non-EO), but also • Growing interest for insight-based analytics exploiting sometime VAS and computational capacity, under one subscription (e.g. SkyWatch, UP42, heterogeneous data sources Arlula, etc.)

PwC - Space Practice - www.pwc.fr/space December 2020 17 Earth Observation 1. Market Overview 2. Market Trends 3. Institutional Trends Over the period 2015-2019, 180 institutional satellites have been launched globally, including ~30% of military assets

The figures displayed here refer to institutional satellites only (i.e. civilian & military). They do not include educational satellites (i.e. satellites owned by research centres, universities, etc.)

European Region (# of satellites; 2015 – 2019)

North American Region (# of satellites; 2015 – 2019)

Space agencies’ Other institutional Military satellites satellites (civilian) satellites Space agencies’ Other institutional Military 13 8 11 satellites satellites (civilian) satellites Major large-scale open data program 4 5 10 Major large-scale open data program Owned & managed by With technical support from Joint programme between

Asia-Pacific Region (# of satellites; 2015 – 2019)

South American Region (# of satellites; 2015 – 2019)

Space agencies’ Other institutional Military satellites satellites (civilian) satellites Space agencies’ Other institutional Military Middle East & Africa Region (# of satellites; 2015 – 2019) 30 45 32 satellites satellites (civilian) satellites Major large-scale open data program 2 2 1 No large scale open Program data programme for Owned & managed by No large scale open data Space agencies’ Other institutional Military satellites satellites (civilian) satellites this region programme for this region 9 5 3

Source: PwC Earth Observation data PwC - Space Practice - www.pwc.fr/space December 2020 18 Earth Observation 1. Market Overview 2. Market Trends 3. Institutional Trends

A zoom on Europe The Copernicus Programme from the European Union provides various economic, social, environmental and strategic benefits (1/2)

Copernicus HPCM Potential / Envisioned Use Cases Budget

CO2M will analyse anthropogenic CO2 emissions, enabling the derivation of the overall Copernicus CO2 budget at national and regional/megacity levels. This will enable better assessment Anthropogenic of related COP21 decisions, which require EO support for accurate and consistent Carbon Dioxide quantification of anthropogenic CO2 emissions and their trends. Auxiliary observations of 455 Monitoring NO2, cloud and distribution support the mission objective. The instrument will Science (e.g. Auxiliary M EUR* CO2 (CO2M) also provide valuable data to the scientific community, including , meteo, Monitoring Owned & With the technical climatology, or atmosphere studies. climatology) Monitoring managed by support from LSTM shall complement current visible (VIS) and near-infrared (NIR) Copernicus Copernicus observations with high spatial-temporal resolution. Near real time evapotranspiration , generated by LSTM primarily will support agriculture, but may also aid in disaster Land Surface management, ecology, currents, , erosion control and others. It will Temperature 389 help implement optimized irrigation strategies, decreasing the amount of water required in In July 2020, ESA has Monitoring Environment M EUR* agriculture and increasing yield. By extension, LSTM will support food security and Water announced the awarding of more (LSTM) Agriculture & Climate decision making in cases of water shortages. The heat measurements can also be used Management than EUR 2.5 B to the European to infer information on and on issues. Monitoring space industry for the development of the 6 HPCMs. The ROSE-L mission is responding to the requirements expressed by both the Land Monitoring and the Emergency Management services. Unlike the Sentinel-1 radar This new generation of Sentinels instrument, ROSE-L leverages on L-band waves capability to penetrate through natural L-band Synthetic satellite will be developed in barriers like vegetation, dry snow and ice. This would enable improved applications in Aperture Radar 500 addition to the current Sentinels forest management, , land monitoring, shipping through fleet. (ROSE-L) Emergency M EUR* measurements of soil moisture, quantifications, and monitoring of polar Land Forest Management phenomenon. Other emerging applications will be possible by the synergetic and Monitoring Management complementary observations with C-band and X-band SAR systems. Services Source: PwC analysis, ESA, DLR, SpaceNews PwC - Space Practice - www.pwc.fr/space December 2020 19 Earth Observation 1. Market Overview 2. Market Trends 3. Institutional Trends

A zoom on Europe The Copernicus Programme from the European Union provides various economic, social, environmental and strategic benefits (2/2)

Copernicus HPCM Potential / Envisioned Use Cases Budget

Leveraging on knowledge developed from Cryosat, CRISTAL shall improve land ice Copernicus elevation and sea ice thickness measurements by implementing higher spatial resolution Polar Ice and for improved lead detection and an additional capability to determine snow loading on sea Snow ice. CRISTAL is thus of relevance to the maritime sector as sea ice is an important 300 Topography component of maritime logistics, especially for future polar marine spatial planning. The Environment M EUR* mission will also be critical to measure specific variables associated with climate change. Maritime & Climate Meteorology (CRISTAL) The data gathered by P-ICE will be relevant to climatologists and scientists interested in Logistics the planet’s such as glaciologists, meteorologists and oceanographers. Monitoring

Copernicus CIMR shall provide improved continuity of sea ice concentration monitoring missions, in particular in terms of spatial resolution (15 km), temporal resolution (sub-daily) and Imaging accuracy (in particular near the ice edges). The instrument will notably measure sea ice 495 concentration, and sea surface salinity, and will have Radiometer Environment M EUR* implications for the maritime sector (e.g. shipping). As with CRISTAL, this mission has a Maritime Ocean (CIMR) & Climate high potential to monitor climate change. Logistics Monitoring Monitoring

Copernicus The CHIME mission aims to augment the Copernicus space component with precise Hyperspectral spectroscopic measurements to derive surface characteristics in support of the Imaging monitoring, implementation and improvement of policies in the domains of raw materials, 455 Mission agriculture, soils, food security, biodiversity, environmental degradation and hazards, M EUR* Biodiversity Urban (CHIME) inland and coastal waters, snow, and the urban environment. Agriculture Monitoring Monitoring

Source: PwC analysis, ESA, DLR, SpaceNews; Image credits: NASA PwC - Space Practice - www.pwc.fr/space December 2020 20 Communications 1. Market Overview 2. Market Trends The satellite communication domain is still by far the largest satellite services market

Satellite Communication Value Chain Key facts Key figures

Satcoms are critical to a wide range of The impact businesses, governmental and leisure Satellite Operator activities. of Satcom USD 153 Bn on the global Compared to terrestrial infrastructures, Estimated size of the global market for Satcoms provide an unmatched level of satcom services Teleport Facility economy availability, coverage, confidentiality and resilience.

Hub The dot com billionaires have heavily Infrastructure invested in the satcom market, and are Highly redefining the satcom architecture from GEO centric to LEO centric. 900+ Network competitive SpaceX and Oneweb satellites currently Operations business There are 4-5 prominent NewSpace LEO in orbit as of mid-Nov 2020 operators (e.g. SpaceX, Oneweb, environment and Telesat, etc.) that are cumulatively expected to send thousands of satellites in Service Provider the coming years 21% End-user Towards the New markets such as M2M/IoT enabled by Estimated CAGR of the revenues emergence 5G, in- connectivity, connected generated by Satcom based broadband of potential cars, and maritime security, are expected internet access markets to sustain and grow the Satcom market.

Source: NSR, PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 21 Communications 1. Market Overview 2. Market Trends The demand for satcom enabled applications is on the rise especially for mobility markets and markets that shall be enabled by the advent of 5G

DEMAND TRENDS

• Moving away from traditional GEO Large satellite constellation (10’s of satellites) towards • Enabling applications that are highly demanded and LEO small satellites constellation (100’s of 1000’s of satellites) require low latency New business models • Leveraging economies of scale to reduce CAPEX • Strengthening demand for existing applications at a • Moving towards a vertically integrated business model (example: OneWeb, , etc) lower price point

• Safety and reliability are the key demand drivers for connectivity within the maritime • Unlocking new mobility applications for safety, Safety, reliability and (offshore and merchant vessels) and land mobility (firetrucks, ambulances and surveillance reliability, and purposes vehicles) markets • Growing demand for connectivity “anywhere and entertainment drive • The demand for aero connectivity in broad terms is generated for entertainment purposes in anytime” demand in mobility flight. 's 2018 survey suggests that about 67% of the passengers are likely to rebook • Increased interest in adopting In-Flight Connectivity with an if inflight Wi-Fi were available. (IFC) over In-Flight Entertainment (IFE)

• End-users demand low latency and high throughput systems for internet connectivity, • Transition from a video heavy market to a data heavy Low latency and high especially for 5G applications market throughput • IoT/M2M are expected to be the demand pillars for the satcom market. • New opportunities and applications to be addressed by applications • The satellite IoT market is expected to reach healthy profits and achieve growing revenues in the advent of satellite enabled 5G, and 5G enabled the coming five years with a market forecast reaching USD 5.9B in 2025 M2M/IoT

Source: PwC Analysis PwC - Space Practice - www.pwc.fr/space December 2020 22 Communications 1. Market Overview 2. Market Trends LEO mega constellations are expected to drive the within this market in the upcoming years, by supplying approximately 85% of the capacity by 2024

SUPPLY TRENDS

• It is expected that between 2019 and 2024 approximately 65-70 Tbps of capacity could be • Strong pressure on capacity pricing across all major supplied to the market and LEO mega constellations are expected to account for 85% - 86% of this verticals, especially for video distribution via C-band • OneWeb and Starlink have cumulatively launched more than 800 satellites Mega-constellations satellites. • Mega-constellations projects have strong anchor customers, mainly institutional (USAF, FCC for • The 4-5 prominent mega constellation operators, in Starlink, UK government for OneWeb, Canadian government for Telesat) or linked to GAFA conjunction with traditional satellites operators could business (Amazon for Kuiper, Facebook with its own constellation project) potentially oversupply capacity in the mid to long terms, as both these segments are aggressively launching communication satellites. • The evolution of the satcom market will largely depend • GEO High Throughput Satellites (HTS) operators are expected to contribute an additional 10-12 on the success or failure of mega constellation Tbps of capacity, accounting for 13-16% of the total capacity supplied between 2019 and 2024. operators GEO capacity • In 2020, and SES cumulatively ordered 13 C-band satellites as a part of US C-band • M2M/IoT and 5G applications are the key supply repurposing for 5G. drivers for both traditional and NewSpace (mega constellation) operators

• Operators are partnering with local distributors and gaining access to these niche regional Distribution markets • Access to niche regional markets • OneWeb partners with Airtel in India, Viasat in USA, and and Avanti in Europe for its • Opportunity to stimulate capacity in developing partnerships distribution network over these regions nations • Other mega constellation operators are expected to follow suit

Image Credits: SpaceX PwC - Space Practice - www.pwc.fr/space December 2020 23 Communications 1. Market Overview 2. Market Trends

A zoom on Europe Various quantum technologies initiatives in Europe are ongoing to form the European Quantum Communication Infrastructure

What is EuroQCI Current status of the initiative in Europe The recent developments around quantum computers threaten current Quantum Key Various quantum initiatives and projects exist within EU cybersecurity systems and algorithms with obsolescence in the coming Present An initiative Member States, supporting the development of quantum years. In order to guarantee the security of current and future data Distribution (QKD) embraced by technologies and testbeds, in particular around QKD. On exchanges, disruptive strategies are envisaged, among which is the use Unconditionally secured top of the national initiatives, 16 EU Member States have of quantum technologies. Member States distribution of and at EU level also signed a declaration of cooperation to jointly on key In this context, the European Commission laid out its the establishment of a EuroQCI. ambition for a European Quantum Communication At EU level, in 2018, the EC launched the Quantum Infrastructure (EuroQCI) acting as a secure Technologies Flagship programme, with a budget of EUR 1 communication shield across the EU. This network, Bn over the next ten years. This programme targets the The vision Other quantum based on a combination of a terrestrial infrastructure development of quantum technologies and will be for EuroQCI services and space infrastructure, should secure sensitive supported through the Multiannual Financial Framework communications and digital transactions both at EU Quantum based… (MFF) for 2021-2027, which includes a EUR 2 Bn envelope scale and globally. In the longer term, EuroQCI would for Cybersecurity and Trust and through the dedicated be a step towards the quantum internet. • Digital signatures • Authentication research projects in the Europe programme. • Secret sharing As part of the Quantum Technology Flagship, the What role for Space in the EuroQCI schemes OpenQKD pilot project launched in 2019 is supported by 38 industrial, academic and institutional partners across 13 EU During their transportation through optic fibre links, quantum signals countries, and aims at establishing a QKD-based are attenuated with the distance, and require relays to be re-amplified 10+ experimentation platform. every 100 to 200 km. Such relays, also called “trusted nodes”, Quantum Internet years represent security weaknesses in the network, and greatly affect the The EC is also supported by the European Space Agency relevance of a QCI over large distances. Interlinking quantum (ESA) for the design of the of the EuroQCI, the « Security And cryptoGrAphic » (SAGA) Satellite-based links enable a limitation of the number of nodes when computers, simulators mission, a GEO based QKD system. ESA is also studying communicating at large scale, increasing the level of security for and sensors are via a LEO QKD missions, such as QUARTZ (led by SES based communications across Europe, or at global scale. quantum network. in Luxembourg) and QKDSAT (led by the private British company Arqit) projects. PwC - Space Practice - www.pwc.fr/space December 2020 24 Navigation 1. Market Overview 2. Digital Technologies 3. Overview of Systems 4. EGNSS Programme Navigation satellites provide positioning and timing data to an ever-expanding user base

Satellite Navigation Value Chain Trends in the Navigation Sector Key facts and figures

Upstream Space system development and launch Today, global navigation systems provide information 4 Satellite system manufacturing A vital asset for about positions, routes, speed and timing, and are used GNSS constellations providing Provision of launch service performance, by an extremely wide range of users in every economic global signals: GPS, Glonass, safety and sector. and Beidou satellites Navigation signals are freely emitted by public entities, Midstream Operations leisure and their exploitation drives significant economic activity. Satellite operations GNSS service provision 102 The development of multi-constellation receivers Number of Global Navigation Satellites in MEO in operation in Downstream Receiver manufacturing and (compatible with multiple GNSS signals) is expected to system integration Pushing for result in greater uptake by end users and enhance 2020 Design development and production greater accuracy performance in terms of accuracy and integrity. of receivers and chipsets Receiver and component integration In addition, navigation signals will have to resist jamming and spoofing threats. EUR 150.7 Bn Navigation data exploitation Estimated global navigation market revenues in 2019 Provision of services to institutional, industrial, public and private users Development of The expansion of GNSS constellations and augmentation systems and the associated increase of new signals are multi-frequency End users driving the receiver market to develop multi-frequency EUR 324.4 Bn Manned Emergency Critical capabilities Drones transportation Aviation response infrastructures features for their devices. Projected global navigation Consumer Agriculture Rail Maritime solutions market revenues in 2029

Source: PwC analysis and GSA GNSS Market Report (Issue 6) PwC - Space Practice - www.pwc.fr/space December 2020 25 Navigation 1. Market Overview 2. Digital Technologies 3. Overview of Systems 4. EGNSS Programme Interests in global and regional navigation systems remains in high priority for faring and emerging space nations, especially for augmentation systems

Infrastructure development initiatives R&D development

• In its proposal for 2021 – 2027 spending programmes, the Commission acknowledged the The European Global Navigation Satellite Systems Agency importance of ensuring the operational and service provision continuity of the EGNSS (GSA) is responsible for the management of the programme through the deployment of Galileo second generation (G2G) Fundamental Elements programme (FE) which is a • The first batch of G2G is expected to be launched around 2024 in transition with the end- dedicated funding mechanism supporting the development Galileo renewal of-life phase of the first Galileo generation of EGNSS-enabled chipsets, receivers and antennas. • ESA is examining a complement possibility to the Galileo system, dubbed GNSSEvo. GLAD Several concepts are envisaged while a LEO nanosat constellation seems the option to be favoured by ESA (TBC) EDG²E ESCAPE

• Driven by the need to increase navigation data integrity and accuracy, several nations are FANTASTIC developing their regional Satellite-Based Augmentation System (SBAS) MAREC Development of regional • and are jointly developing an SBAS, expected to allow the economies of both countries to generate USD 7.5 Bn across their industries PATROL augmentation systems • The Agency for Safety in Africa and Madagascar (ASECNA) has recently validated the system architecture and geographic coverage of its future SBAS planned for MEOSAR 2022 The implementation of FE projects has significantly bolstered European leadership by • Following the implications of Brexit, the UK is examining different alternatives to replace its leveraging differentiators from the EGNSS reliance on the Galileo system. Based on possibilities emanating from different and infrastructure. The UK is exploring technologies, the UK Space-Based Positioning Navigation and Timing Programme (SBPP) The technology developments achieved through options for independent is exploring different satellite systems configurations the development of the FE projects have GNSS • The UK is developing its strategy towards the adoption of the OneWeb constellation, enhanced competitiveness of the European Union recently acquired by the UK government with India’s Bharti Global Ltd, as a complement to on a global scale. GPS. Image Credits: Ikonact PwC - Space Practice - www.pwc.fr/space December 2020 26 Navigation 1. Market Overview 2. Digital Technologies 3. Overview of Systems 4. EGNSS Programme Several GNSS constellations and satellite based augmentation systems provide navigation capabilities around the globe

Main GNSS and augmentation systems across the globe

Europe Russia

Galileo GLONASS SDCM Operational Augmentation Operational Augmentation Satellites System satellites Satellites System satellites 26 3 24 3

Japan China North America KPS QZSS BeiDou Korean GPS WAAS Augmentation Operational Planned satellites System satellites Satellites in constellation Operational Augmentation 3 35 7 Satellites System satellites 31 3

India

South America Middle East & Africa Region Oceania IRNSS (NavIC) GAGAN SACCSA ASECNA Australia and Operational Augmentation 1 Satellites System satellites Augmentation Augmentation 1 New Zealand SBAS 9 3 System satellites System satellites System under development

PwC - Space Practice - www.pwc.fr/space December 2020 27 Navigation 1. Market Overview 2. Digital Technologies 3. Overview of Systems 4. EGNSS Programme

A zoom on Europe Galileo is Europe’s GNSS civil programme, providing a highly accurate, guaranteed, global positioning service

The Galileo Programme Key facts and figures

Potential budget allocation for the First GNSS to be Providing a set of four high-performance services worldwide continuation of the Galileo and EGNOS under civil control EUR 9.7 Bn programme over the 2021 – 2027 period Free of charge to users, providing positioning and Open Service information for high-volume navigation applications The aim of the Galileo High Accuracy More secured and precise service delivered through programme is to provide the Service encrypted signal for applications such as safety-of-life first global navigation satellite Number of satellites in the final Galileo constellation. As of May 2019, 26 system under civil control, for Restricted to government-authorised users, for sensitive 30 Public Regulated Galileo satellites have been deployed the public and private use of applications requiring a high level of service continuity, European and global entities. Service free of charge for European institutions and MS

Search and Contributing to COSPAS-SARSAT, Galileo will offer a unique link alert informing the sender that their distress Rescue Service message has been received

The Galileo programme was created to answer Europe’s strategic need of a reliable European satellite 1 Bn Estimated number of Galileo-enabled navigation signal, and to foster the development of economic and societal benefits in 2019

Source: PwC analysis, EC – Proposal for a regulation establishing the Space Programme of the Union and the European Union Agency for the Space Programme, GSA PwC - Space Practice - www.pwc.fr/space December 2020 28 Access to Space 1. Market Overview 2. Market Trends Today, different classes of orbital launchers are being used around the world, almost exclusively by six spacefaring regions

Access to Space Value Chain Number of orbital launches (2014 to 2019) per vehicle class, family and location Key facts

Launcher Launch system design CZ-3 49 Development CZ-5 3 5 35 5 39 system -2 4 architecture definition and Delta-4 Heavy 4 Heavy-lift 3 • The launch market can be design A5 1 M 30 segmented into two types of 1 GSLV Mk.2 6 customers: institutional and GSLV Mk.3 3 Launcher Falcon-9 commercial. Manufacturing and integration H-2A/B 21 Manufacturing CZ-2 Medium 4 • On the commercial market, there CZ-4 29 Manufacturing, integration CZ-7 2 is currently a duopoly between and testing of launch Medium-lift ST 16 9 SpaceX ( and Falcon system’s main and sub- Delta-4 Medium 12 components Soyuz 82 Heavy) and Arianespace (, PSLV 25 CZ-11 8 Soyuz ST, ) CZ-2 Light 36 Launch CZ-6 3 • On the institutional market, most of Launch service operations 9 operations Vega 13 the launches are not open to Light-lift 2 3 competition (use of local vehicles Management, sequencing 11 for local institutional customers) and monitoring of launch Soyuz light 3 1 mission 2 -XL 2 Super-Strypi 1 2 Launch Demand Micro-launchers Shavit 2 S-Series 1 Commercial Institutional 10 Europe China Others Market Market -3 1 USA Russia India

Source: PwC analysis, PwC Launch PwC - Space Practice - www.pwc.fr/space December 2020 29 Access to Space 1. Market Overview 2. Market Trends The launch market is experiencing a drive towards reduced cost to orbit, showing increasing competition at global level, while still retaining a large captive nature at a regional level

Market Trends Governance Trends Technology Trends

Reduction of the cost of access to space Disruption of traditional institutional market New generation of systems and through the development of modular and with the emergence of major private players development of super heavy launchers reusable launchers restructuring the industry serving defence and exploration missions The current families of orbital launchers are being replaced Pushed by a fiercer competition, launcher companies are Space and government policies play a significant role in using modular with common core between medium aiming at reducing the development, manufacturing and shaping the competitive landscape at regional level, with and heavy-lift vehicles. Examples include , Angara, operation costs with the objective to be price competitive. institutional markets (and in some cases even commercial H-3, Vulcan and 5. To create economies of scale, they aim at maximizing the markets) being still largely captive. In addition, super-heavy launch vehicles are being developed modularity of their vehicles through the use of components on by the US, China and Russia for deep-space missions, the different launcher families (e.g. Epsilon first stage as a The increased competition from private launchers such as delivery of heavy (e.g. space stations modules) but booster of H-3, Ariane 6 and Vega-C will share the same first SpaceX and have added pressure on also to serve a wide range of defence missions. Examples stage booster). The development of reusable launch systems institutionally-driven launch providers, both nationally (e.g. include Falcon Heavy, , or SLS is expected to lower costs. United Launch ) as well as globally. (focused on exploration missions only).

Shift in governance and risk-taking from Development of micro-launcher systems Development of engines using LOX/ public to private with institutions limiting from new entrants Methane propellants their involvement

Pushed by a promising market for the delivery of small Although governments remain involved to fund key The use of liquid and methane as propellants would satellites, more than 200 micro launchers projects are being developments, private companies increasingly lead launcher lead to significant gains such as simpler and lighter launcher developed around the world by new entrants usually development in the USA, in Europe, and progressively in design, re-ignitable engines and easier storage and handling. supported by local agencies. The commercial sustainability India – where ISRO notably initiated a aiming at US, Europe and Japan are known to be currently developing on the long term of these micro-launch solutions is yet to be boosting the Indian private sector participation in a wide methane engines. demonstrated. range of activities, including access to space.

Source: PwC analysis, Space Institute, Image Credits: NASA, SpaceX PwC - Space Practice - www.pwc.fr/space December 2020 30 Access to Space 1. Market Overview 2. Market Trends The European institutional launch market size and openness to competition creates challenges for European launch providers

Overview of the launcher market and of European trends 2017-2019 launch distribution

More than 60% of the mass delivered by Ariane 5 is currently dedicated to European launch the private sector. In comparison, less than 30% of both Chinese and US activities are launches address commercial purposes. 52 Russia 28 primarily sustained European launch capacity to answer commercial operators’ needs may be Europe 40 USA by commercial affected by the 2018 National Defense Authorization Act that prevents the 86 5 2 China 71 DoD from using commercial satellites launched on Russian . This 153 27Japan launches 575 62 could represent a potential constraint if Ariane 62 faces additional delays. 5 1 78 75 25 5 India US, China, Japan and Russia have issued regulations preventing foreign Payload Category systems from launching their institutional payloads. Acute competition Due to the US government’s public procurement programme, government Civil Commercial has been rising from contracts in the US are a captive market. Such policy, as well as the large Military international players budget allocated to launchers, have supported the emergence of national champions (e.g. SpaceX). The latter are enabled to offer attractive prices on 1%1% the international commercial market. 23% 27% USA China Japan

Market distribution 77% 73% 99% European institutions The EU has included access to space to its space strategy, providing financial support to research and . are pursuing their Open market The coronavirus pandemic delayed the testing of Ariane 6’s solid-rocket- 21% 13% efforts to support 34% booster (P120) and the of the (ELA-4), and obliged their launch service Europe Russia India decision makers to postpone Ariane 6’s maiden flight to the second Captive market providers quarter of 2022. 66% 79% 87%

Source: PwC analysis, PwC Launch Database PwC - Space Practice - www.pwc.fr/space December 2020 31 Access to Space 1. Market Overview 2. Market Trends Heavy and medium lift launch markets are expected to evolve steadily and activity from micro-launchers is expected to further materialize in the coming years

Historical and forecasted evolution in space launches per launcher class (2015-2025) Key facts Heavy lift launchers (e.g. SpaceX Falcon9, Ariane 5, Proton, etc.) are HISTORICAL FORECAST expected to represent a high share of the launch activity in the next years. Several heavy lift launcher programmes are currently under development 15 (e.g. Ariane 6, GSLV, New Glenn, CZ-5, etc.). 13 13 13 Chinese exploration missions with are expected to ramp 11 13 14 up heavy lift launches, and in the US, Falcon Heavy and New Glenn are expected to be the main launch vehicles used in the heavy-lift segment, 9 followed by ULA’s Vulcan Heavy.

The medium-lift segment is expected to be driven by the Russian-made 11 96 Soyuz, the Indian-made PSLV and the future European-made Ariane 62. 14 12 97 92 94 82 90 90 Ariane 62 is expected to have a maiden flight in 2022. The Indian PSLV also plays a role in this segment however the manufacturing shift from 90 ISRO to HAL might have a negative impact on the launch frequency of PSLV. In China, CZ-4 is being phased out and replaced by CZ-7 and the 68 64 64 heavier CZ-5.

11 11 10 With an increasing demand from small satellite operators, the micro-lift 11 16 11 10 segment is expected to rise in the next years. Several micro-launcher

23 22 25 companies are developing micro-lift solutions with the objective to 8 9 16 19 17 7 6 15 drastically reduce the costs to access space for small satellites 5 companies. In Europe, micro-launcher companies are also supported by 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 European institutions, with some of them attracting significant private funding (e.g. the recent funding rounds for (UK) - $24M - and Isar Super Heavy-lift Heavy-lift Medium-lift Small-lift Micro-lift Aerospace (DE) - $91M).

Source: PwC analysis, PwC Launch Database PwC - Space Practice - www.pwc.fr/space December 2020 32 Access to Space 1. Market Overview 2. Market Trends The rapid increase in small satellites has given rise to micro and small launch activities

Among the 200+ projects of micro launchers in development across the world, very few are already operational and some are more mature (non-exhaustive sample list)

iSpace Isar Aerospace PLD Space Skyrora XL Aero. Relativity Hyperbola-1 Electron -1 LauncherOne Orbex Spectrum Miura-5 Skyrora Alpha Terran-1 Maximum 150 230 payload (SSO 200 300 180 700 300 315 630 900 (700km) (700km) 500km) Expected/ effective first 2019 2017 2020 2021 2022 2022 2024 2023 2020 2021 launch Having raised Developing larger Isar Aerospace Step-by-step USD 70M in Vertically Operational Operational rockets (Pallas- Virgin Orbit’s first has raised over PLD Space plans approach starting Highly innovative investment and integrated rocket, raised micro-launcher 1), benefiting orbital launch USD 91M will be to launch a first with company signed 6 launch company USD 273M in (14 launches as from transfer of partially failed starting its launch rocket (, demonstrators digitizing rocket contracts, Orbex developing a Comments Series A and B, of August 2020), military (premature operations in 100kg payload ( nano manufacturing is expected to be motorized developing larger extended technologies shutdown of the 2022 from the capacity to tested in 2020), (Stargate factory one of the dispenser and a rockets payload capacity access to test/ first stage’s European 150km altitude) targeting using 3D-printing, leading larger rocket (Hyperbola-2) in 2020 launch sites from engine) in in 2021 primarily UK robots, etc.) companies in () in parallel Chinese gov. French Guyana market Europe Key trends

Micro launchers have been developed to enable smallsat operators access tailored launch Traditional heavy and medium launch service providers are responding to the competitive threat services as primary customers. Micro-launchers have the capacity to launch 100 to 300 kg into emerging from micro-launcher solutions, notably decreasing the rideshare costs (down to USD 1M SSO 500km. Several companies such as RocketLab Electron, PLD Miura-5, iSpace Hyperbola-1, for 200kg with SpaceX Falcon 9) and offering enhanced precision of injection and autonomy to Orbex or ISAR Aerospace are developing micro-launcher systems. In order to expand their rideshare satellites using motorized dispensers (developed by companies like Momentus for customer base to reach both small and medium satellite operators, companies such as Firefly example). Together, this could pose a threat to micro/small launchers’ business. Alpha or Relativity Terran 1 are developing greater launch capacities. Source: PwC analysis, El Pais, Firefly, iSpace, Rocket Lab, Galactic Energy, Virgin Orbit, PLD Space, , Skyrora, Relativity PwC - Space Practice - www.pwc.fr/space December 2020 33 Access to Space 1. Market Overview 2. Market Trends Ambitious plans for are moving forward globally with new levels of international cooperation

Mapping of the current spaceport projects being planned/developed across the globe (non-exhaustive list) Key trends

United Kingdom - Sutherland, Shetland Norway – Andøya ; Sweden – ; Portugal - Azores • With a large number of and Cornwall Apart from the UK, various projects of commercial spaceport for smallsats are observable in Europe. micro/small launcher projects The UK is developing spaceports enabling In Norway, the Andøya spaceport is expected to reach full capacity in 2023-2024. In Sweden, the emerging, governments are vertical (Sutherland and Shetland in Space Centre is expected to host the Themis reusable rocket stage prototype starting 2023. aiming at developing Scotland) and horizontal launches spaceports to host operations (Cornwall in ). In June 2020, first for such vehicles tests were conducted in the Shetland • Pushed by the incentive to Space Centre (SSC) with Skyrora’s eventually develop new Skylark Nano. Spaceport Cornwall is economic activities, various under development, and collaborated with spaceport projects have been Virgin Orbit to start operations in 2021- announced since 2015, around 2022. the world China - and • To attract micro launcher Shandong companies, countries are In addition to the established adapting their regulation to centres enable launch providers to of America (Jiuquan, Taiyuan, Xichang), conduct leaner and more An increasing number of commercial spaceports are China recently completed efficient operations (e.g. UK being established in parallel to heritage launch sites construction of the Wenchang agreement with the US such as or Vandenberg Base. As of - Launch Centre in Hainan, enabling US Virgin Orbit launch June 2020, 12 commercial spaceports are already The UAE plans to turn the Al Ain International South China. In parallel, from Cornwall Spaceport, etc.) FAA-licensed, and another 16 have announced plans Airport into a "multi-mode super-port”. China is making progress on • In parallel, some micro- (e.g. , Michigan, etc.). To coordinate this Also, the UAESA signed an agreement with spaceport project for sea launchers (e.g. PLD, RFA) are growth in the number of US spaceports, a National for space and launches in Shandong, North- also considering launching Spaceport Network is currently under study. technology using SpaceShipTwo. East China. from .

Source: PwC analysis, Global Spaceport Alliance , SpaceWatchGlobal, New York Times, Gulf News PwC - Space Practice - www.pwc.fr/space December 2020 34 Space Situational Awareness 1. Main trends 2. The issue of space security is a global concern necessitating a common and international alignment

Main trends inSpace Situational Awareness and Space Traffic Management (Civil and Commercial only) threatening the sustainability of space

Space debris in the context of SST refers to man-made • The amount of space activities and launched spacecraft is rapidly increasing, especially in LEO, where the deployment of constellation projects is expected to double the number of objects in space (as opposed to and ) that have lost their functionality. The growing issue of space objects in this orbital regime. • Small satellite classes have found their audience across all major service verticals, such as space debris Earth Observation, and Satellite Communication, and are allowing the entrances of new Space debris are mostly present in regions of space players into the space sector, leading to the rise of new global challenges around the closer to Earth, such as the LEO, MEO and GEO. sustainability of the space environment.

• The need for mitigation measures, providing the definition and application of design and LEO > 10cm 18300 Measures preventing operational guidelines to missions under development, have been endorsed by The UN and > 50cm 4400 Below 2,000 km > 1m 2600 the increase of translated into non-legally binding guidelines. • The space surveillance and tracking (SST) of orbital debris aims to prevent debris collisions uncontrollable space between operating satellites and other space objects, and to provide information about the objects have been MEO > 40cm 900 of debris re-entering the Earth’s atmosphere. > 1m 500 designed Between 2,000 • Active removal of orbital debris relies on innovative technologies to approach, capture and and 36,000 km > 5m 100 • remove existing debris, are currently under development.

> 50cm 2000 • Given the strategic importance of space infrastructure and considering the significant GEO > 1cm 1800 increase of space traffic expected to materialise within the next decades, the possible 35,786 km > 5m 1200 Towards the creation of a formal monitoring and management system for space traffic is being development of Space investigated and enforced by national institutions. Nota Bene: as mentioned at the beginning of the presentation, the focus here Traffic Management • Space Traffic Management is a system of standards, requirements, guidelines, and technical is on civil and commercial SSA trends and issues. programmatic and organisational activities applied to each component of the lifecycle of a Evolutions in will be the subject of a separate publication space mission in order to ensure access and utilisation of the space environment.

Source: PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 35 Space Situational Awareness 1. Main trends 2. Space Traffic Management Increased space activities and traffic are leading to the need to conceive and implement Space Traffic Management system(s) in order to sustain the space environment

Overview of institutional initiatives in the field of STM Overview of commercial initiatives

US Initiatives • ArianeGroup • LeoLabs The US are preparing a framework supporting the creation of an STM system, which aims at reinforcing the US’s Data • SDA • Share My Space strategic position and encourages the involvement of the private sector. Providers • ExoAnalytic • Zodiac Aerospace Solutions With strong capabilities acquired through the development of their Space Surveillance network, the US possesses the adequate technical means to perform STM activities. • AGI • ExoAnalytic • Applied Analytics Solutions European initiatives Database Solutions • Schafer Even though Europe SSA means are technically far from competing with US capabilities, Europe benefits from the Management • ArianeGroup • A.I. Solutions • Omitron • advantage of having a nearly exhaustive geographic coverage of sensors. Software • Solers • LeoLabs The European private sector is demonstrating capabilities to support the establishment of an STM system. The • Share My Space European Commission under the H2020 programme is exploring concepts for Space Traffic Management by identifying a network of opportunities, assessing available capabilities and designing a set of STM guidelines and • AGI • Share My Space best practices. • Applied Analytics • Lockheed Martin Solutions • North Analysis • ArianeGroup • ExoAnalytic Russian initiatives software • Omitron Solutions Russia provided the UN with a proposal suggesting a UN-operated platform for STM purposes. But countries • Solers • Applied Defense such as the US were opposed to this proposal as it is not in line with their national strategies. However, should the • Schafer Solutions, Inc. UN adopt Russia’s proposal, Russia will commit to provide its SSA catalogue at a global scale. • A.I. Solutions • AGI • ExoAnalytic Chinese initiatives • ArianeGroup Solutions The very large population of Chinese satellites indicates that the Chinese network for space surveillance is Service • Lockheed Martin • Applied Defense quite developed. The SSN (USA) and SSS (Russia) are far superior in terms of data gathering and processing Providers • Schafer Solutions, Inc. when compared to national Chinese surveillance network operated by SSF. • North Star • Share MySpace • LeoLabs

Source: PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 36 Space Exploration 1. 2. Lunar Exploration 3. & Beyond Private sector companies will play a critical role in determining the evolution of the space exploration market

Space exploration markets Main trends

• Private and commercial initiatives are encouraged through the creation of Challenges commercial space flight opportunities and development of private space stations 1 • NewSpace companies such as and are • The establishment of internationally accepted regulations and procedures developing initiatives to develop commercial space stations for SRU, priority rights, and classification of safe zones is an important hurdle affecting the implementation of SRU activities, • The Technology Readiness Level (TRL) of key systems must increase to • The interplanetary transportation market envisions services to the , Mars, enable space tourism, interplanetary transportation, and SRU activities, Interplanetary Asteroids and other celestial bodies for commercial space purposes • As government funding alone is not sufficient, the sustainability of a 2 Transportation • Large companies such as SpaceX and BlueOrigin, as well as start-ups such as commercial space exploration market heavily relies on both terrestrial ispace and Astrobotics are developing transportation capabilities industries and investments from the private sector.

Opportunities • The market is dedicated to provision Moon Observation (MO) and MArs Observation (MAO) prospection data from both a payload and sub-systems Payload & • Growing interest towards projects planning lunar activities and setting long () perspective 3 term human presence on the Moon is gaining momentum and driving the Telemetry Data • NewSpace start-ups and some Commercial Lunar Payload Service (CLPS) providers (e.g. ispace, etc.) are expected to lead the development of this market development of the space exploration markets, • Demand for space exploration missions, both to and to LEO stems primarily from national space agencies. Recent trends of space Space • The SRU market is built on the concept of utilising space resources (, ice, industry privatisation (e.g. SpaceX, Astrobotic), are pushing for the Resource etc.) available on celestial bodies in order to facilitate the development and development of a private space exploration economy in the coming decade sustainability of in situ activities 4 Utilisation • Technological trends associated with developing cost effective launchers, • Start-ups such as ispace, Maana Electric are examples of companies venturing orbiters, landers and rovers are enabling the commercial exploration of (SRU) into this direction celestial bodies.

PwC - Space Practice - www.pwc.fr/space December 2020 37 Space Exploration 1. Low Earth Orbit 2. Lunar Exploration 3. Mars & Beyond Numerous new actors, institutional and commercial, show interest in manned missions to Low Earth Orbit

Commercial support for the ISS Asia-Pacific projects in LEO LEO Tourism

The sub-orbital flight segment attracts Commercial actors are getting involved in China Large China continues to develop its large space private companies demonstrating strong the expansion of the ISS. Examples include Modular station (CSS) project Tianhe. investment capabilities and POCs. Commercial Airbus Bartolomeo platform featuring fully and ESA could be interested in future Space Suborbital Overcoming high barriers to entry and infrastructure commercial space attached to ESA’s partnerships, even though Chinese technology Station flights failures, Virgin Galactic, Blue Origin and Columbus module, or Axiom’s project for a and are banned from ISS by NASA. on the ISS Zero-2-Infinity market themselves as whole new module dedicated to space dedicated space tourism companies, and will tourists, complete with 2m-high United Arab In with Russia, the UAE had an be serious players in the next decade. Emirates’ fly aboard a Soyuz to the ISS, and aims at expanding its astronaut corps, with manned the goal to stay for longer periods of time on ambitions Orbital space tourism segment is of two 2020 is the year the US returned to space the station orders of more expensive to from American Soil. SpaceX’s Crew Dragon NASA’s end-customers, and de facto to a private and ’s Starliner can host up to seven India pursues manned spaceflight goals Commercial Orbital astronaut programme. Companies like Space crew members in their round-trip to LEO. India with the development of the Adventures have offered flights to space Crew Both companies have signed contracts for Manned capsule to be launched on a GSLV Mk3. flights tourists, some aboard the ISS. Recently, they Programme five operational flights to the ISS until 2026, Space Through partnerships with Russia and plans announced farther trips around the Moon or and will fly astronauts from all countries. Programme for a in the mid-, India is advancing quickly in the field. in .

USD 55M USD 2.5 Bn USD 250,000 The price of a seat on Crew Dragon, The Chinese budget for human The price of a ticket for a suborbital flight compared to USD 80M for the Russian spaceflight, representing 33% of their with Virgin Galactic onboard horizontal Soyuz and USD 90M for space budget (USD 8 Bn in 2020) take-off SpaceShipTwo

Source: PwC analysis, NextBigFuture, Planetary Society, Virgin Galactic, Space Foundation ; Image Credits: NASA, PwC - Space Practice - www.pwc.fr/space December 2020 38 Space Exploration 1. Low Earth Orbit 2. Lunar Exploration 3. Mars & Beyond Issues surrounding Low Earth Orbit human presence are exacerbated in Moon projects

International Moon Programmes Other lunar Missions

The lunar exploration program encompasses the development of the Asian Institutional actors (SLS), the Crew Capsule, and the associated After the failure of Vikram in spacesuits (for flight and lunar excursions) as well as the Commercial Lunar late 2019, India keeps on with the Payload Services (CLPS). The objective is to bring astronauts back to the Artemis goal of demonstrating capabilities of Moon by 2024, aboard , the 3rd flight of the SLS. Since its inception soft- on the Moon, with the as the , Artemis has been subject to reviews by the US Chandrayaan-3 probe. In the Congress and undergone several changes. As of 2020, is planned meantime, China landed the first to fly in November of 2021, with an unmanned Orion capsule. Uncertainty in rover on the in Fully commercial the programme might arise as a result of the U.S. Elections 2019, and the Chinese Lunar Moon missions Exploration Programme (CLPE) Many teams competing in notably includes sample return with Google’s Xprize have 130 metric tones 125 cubic meters Chang’e-5 and 6. Maximum lift capability of the SLS in its Maximum planned pressurized volume spun-off start-up version. The crew version initial lift for the , the future space companies. They aim to provide regular shuttles to capability will be up to 70 metric tons, station orbiting the moon, approximately NASA’s Commercial Lunar the Moon’s surface for twice that of any current vehicle 10 times smaller than the ISS Payload Services (CLPS) commercial and scientific The CLPS program aims at payloads. ispace’s providing NASA with fixed-price -R M1 mission will Originally developed as part of the , the Lunar Gateway is payload contracts to the Moon, to be the first payload flown now an independent program. Orbiting around the Moon with a polar near- for resources, test in-situ on the new Vulcan rectilinear (NRHO) inclination, the 40-ton Gateway will be a staging resource utilization, and prepare the launcher from ULA, in Lunar location for later Artemis missions, as well as a meetup point for commercial Artemis missions in general. 2021 at the earliest. Gateway landers and cargo missions. The station’s modules will be built by the same Starting in 2020, NASA’s payloads agencies that collaborate with the ISS (e.g. NASA, ESA, CSA, JAXA). The will start flying on Astrobotic, Gateway will be composed of various modules, including the Habitation and Intuitive and Masten Logistics Outpost (HALO), or the Power and Element (PPE). Space Systems landers. Source: PwC analysis, NASA ; Image Credits: NASA PwC - Space Practice - www.pwc.fr/space December 2020 39 Space Exploration 1. Low Earth Orbit 2. Lunar Exploration 3. Mars & Beyond The main scientific and outer space exploration missions target a variety of and celestial objects

BepiColombo (2020) DART, HERA (2021-24) (2020) Juice (2022), (2026) Clipper (2024) Complete study of DART is a NASA mission to rover is a Looking for the bricks of ’s , study deflection, successor to Curiosity, will look The Icy Moon primitive life, Dragonfly will be core, etc. featuring with an ESA-led follow up in for more traces of life on Mars, and the Europa a plutonium-powered drone electric propulsion. 2025, HERA. and carry a helicopter drone. Clipper will study Jupiter capable of vertical take off and moon’s under-ice landing under the thick clouds and look for traces of life. of ’s moon.

Aditya (2025) JWST HOPE (2020) Exomars (2022) A 1.5-ton satellite at L1 to The James Webb Space HOPE would be the first The European-Russian provide a comprehensive will replace Hubble, mission of the UAE to Mars, rover will drill 2 meters in understanding of the . and feature a 6.5-meter and will study the planet’s the to look for deployable primary . atmosphere. traces of life.

Near Earth Objects

Mercury Earth Mars Jupiter Saturn

Source: PwC analysis, NASA, ISRO, CSA, ESA, JAXA, UAESA PwC - Space Practice - www.pwc.fr/space December 2020 40 Governance, policy and regulation 1. Overview 2. Governance 3. Challenges 4. UAE – Case Study Space regulations must comply with international laws that directly impact the domestic regulation of space activities

Outer Space Treaty (OST, 1967) International Conventions, including UNOOSA Guidelines

1972 Convention on international liability for damages State Supervision and Liability 2010 Space Debris Mitigation Guidelines International caused by space objects Law 1975 Convention on the registration of objects Non-appropriation and freedom of exploration Bilateral Agreements including launched in outer space Non-militarization of space and disallowance of 1979 agreement governing activities on the Moon and 2020 (9 signing parties so far) weapons of mass destruction other bodies

Compliance with international law & guidelines The operation of space objects

Space Debris Mitigation Sounding rockets & sub-orbital launches Domestic law Environmental protection Orbital launches & regulations Domestic laws directly affect the regulation Liability to third-party and space of the operation of space objects Launch permit

Safety of and properties Satellite operations

PwC is partnering with the Sirius academic Chair to develop the Space LegalTech platform, a platform mapping space legislations around the world in order to provide a comprehensive understanding of the global architecture Learn more on Space LegalTech and latest space law and space policy developments

Source: PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 41 Governance, policy and regulation 1. Overview 2. Governance 3. Challenges 4. UAE – Case Study Regulatory differentiation has become an attractiveness lever for space nations

Space regulations are mostly country- specific Levers for attractiveness Elements affecting the attractiveness of a licensing / authorization process

Time duration of Pre consultation Inter-agencies process Regulatory levers can impact the licensing procedures processes States that have enacted national space attractiveness to space players of a • Duration of YES / NO legislations have taken highly divergent country in several ways. YES / NO procedures can vary • Inter-agency approaches: • Pre-consultations can from 1 to 6+ processes increase Space regulation levers include: shorten application • Agencies are now application delays delays • Some countries only have a national trying to reduce that • Efforts in • Procedures duration, • They become a tool of space law, others have several laws or a duration via dynamic harmonization of attractiveness for number of regulations under the law, processes and procedures are • Application fees, space agencies feedback loops observed • States have defined their legal/regulatory framework according to the state of • Insurance amount to be underwritten national space industry, actual by applicants. commercial space activities, or national Traditional regulatory levers include: governance, Fast-track procedure Insurance requirements Fees • Tax law, • The governance and namely the allocation YES / NO • Can be tailor-made or • Can be tailor-made or of responsibilities between the different • Corporate law (including bankruptcy • Fast-track procedures or sometimes be fixed or sometimes be fixed competent governmental bodies is country- law), shorten application at more than USD at more than USD specific (Cabinet Office, a ministry, an delays 60M 6,000 agency or even several agencies). • Economic law in general impacting • This has become • May have deterrent • May have deterrent the ease of doing business. particularly relevant in effects for smaller effects for smaller the smallsat era businesses businesses

Source: PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 42 Governance, policy and regulation 1. Overview 2. Governance 3. Challenges 4. UAE – Case Study The scope and role of space agencies is evolving to better match an ever increasing downstream reach of space

Space Agencies are • The space sector is increasing its reach into downstream industries and associated value chains required to assume • This leads to the concept of Space Economy, generally defined as the ensemble of core space activities and all enabled new roles in relation to revenues, services, benefits and applications into the broader economy an evolving space • With an increasing number of industries concerned, and potential users, there is an increasing need to structure the country- environment level governance in a way that maximises the growth of the space economy

Transitioning of the space agency concept Transition towards a more distributed governance

From mainly technology and space assets development and Other ministries and agencies with broader scope, or with non-space procurement agencies… sectorial scope, taking up some role in the space economy

…to entities looking also at market development, market needs and Need for tighter coordination at country level economics as well

PwC - Space Practice - www.pwc.fr/space December 2020 43 Governance, policy and regulation 1. Overview 2. Governance 3. Challenges 4. UAE – Case Study New strategies of space-assets insurance are required in an era of increased in-orbit activities and STM concerns

Insurance of space assets is a new trending Different types of insurance are required Insuring space assets is a challenge for insurers, operators as well as topic directly linked to the issue of STM from operators regulators

The space insurance market is made of Insurers different types of that cover different operations: The space insurance market is uncertain for insurers. Recent market exits were The several thousand space assets registered (SwissRe in 2019). expected in orbit by 2030 (OECD, 2020) are Decades of collected market premiums can be wiped-out in a single catastrophic • insures the value of causing problems of orbital congestion event (rocket failure) or future in-orbit collision. space assets (rocket, satellite) and can and increased risks of in-orbit collisions. be sold for the launch phase as well as Operators The development of smallsats, which are years in orbit, or be bundled in “launch + harder to track but still highly dangerous in 1 year” offers. Insurance requirements represent an additional cost that can be substantial depending on the activity performed (launch, operation of a satellite) as well as on the an in-orbit collision, increases the risk of a • Third Party Liability (TPL) insurance financial robustness of operators (even small insurance costs for start-ups can be collision event in the near future. This is insures against damages dealt to third impactful on activities). exacerbated by the development of parties by the insured party’s property. It has become increasingly costly for launch operators to insure their launchers as mega-constellations. insurers are increasingly cautious even after launchers display positive track records. Due to the increased number of assets Multiplication of spaceports as well as needing to be insured, innovative Regulators launch vehicles is also becoming an insurance mechanisms could emerge in issue with close-calls in rocket failures the future including “umbrella” schemes On one side, insurance requirements become a component of attractiveness for potentially leading to physical damages and where one entity buys an insurance for a space nations. On the other side, states are liable for any damage incurred by operators deaths. fixed value and then dispatches at its own they licence. Insurance is ultimately a guarantee of responsibility from operators will the amount of coverage between is and proof of seriousness from regulators. different assets. Consequently, regulators seek a balance between the two effects.

Source: PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 44 Governance, policy and regulation 1. Overview 2. Governance 3. Challenges 4. UAE – Case Study Recent regulatory developments challenge the space community, notably including…

The Artemis Accords and developments around “Flags of convenience” in outer space Space Resources Utilization (SRU)

Signed by 9 countries (USA, , Australia, Japan, UAE, UK, Italy, Current race towards loose regulations in order to attract more spacecraft and Luxembourg, ), the Accords are bilateral agreements that, despite being activity (regulatory competitiveness). non-binding, could set a precedent and establish practice in the area. This creates a problem of “flag of convenience”, like in maritime law, where They cover several aspects of civilian , Mars and asteroids, everybody goes for the same country, creating potential safety hazards for but are particularly scrutinized for their treatment of extraction and utilization of passengers, other spacecraft and the environment. space resources as an compatible activity.

Military space Commercial

Space military capabilities including military space forces or energy-directed A new legal framework is to be developed in relations to the insurance of crew weapons could violate the Outer Space Treaty or go against guidelines like the members, third-parties and the registration of the space objects (orbit, …) space debris mitigation guidelines (2010). when it comes to commercial human spaceflight.

Source: PwC analysis ; Image Credits: NASA, USAF Museum PwC - Space Practice - www.pwc.fr/space December 2020 45 Governance, policy and regulation 1. Overview 2. Governance 3. Challenges 4. UAE – Case Study Recent developments in Space Policy: the UAE is building a business-friendly yet responsible space policy framework

• The UAE Space Program dates back to the and has since emerged as a proactive and innovative program that places the country among the strong contributors to the international space effort The UAE has emerged as a trusted partner to • Over the past couple of years, the UAE has developed a comprehensive Space Strategy as well as a complete set of legislations and regulations to attract the space economy players thanks to lean and efficient procedures the global space community • The UAE is now also a credible partner in terms of space exploration with its recent Mars HOPE probe mission and its future lunar mission. In addition, the UAE has now sent its first astronaut to the ISS in the person of Hazza Al Mansouri (2019)

The UAE is also putting forward a sustainable and Main objectives of the UAE Space Strategy & Policy Sets of policy actions developed to attract businesses responsible space sector

• Becoming the Arab world leader in the space sector as The UAE has implemented the respect of space Space Debris well as one of the prime space nations in the world UAE National Space Strategy UAE Space Policy debris mitigation guidelines at the core of its Mitigation • Attracting space businesses to the UAE and take full part spacecrafts licensing an authorisation process in the New Space revolution by becoming a space entrepreneurs hub The UAE Space Agency as a Strong international strong focal point for the • Develop a comprehensive set of space activities from cooperation agreements The UAE is exploring means of ensuring the launch services provision, satellite manufacturing, space space economy development of smallsats constellations does Balanced data innovative usages to space tourism activities not lead to a race to the bottom in terms of insurance space traffic management. As such it is • Inspiring new generations of space scientists in order requirements to secure the UAE’s leading position in the space sector Space Investment Promotion Plan including business exploring insurance mechanisms of smallsats through a strong involvement of academic institutions incubation & acceleration with UAE Space Agency that are both attractive and responsible

Source: PwC analysis PwC - Space Practice - www.pwc.fr/space December 2020 46 www.pwc.fr/space

If you have questions, or wish to discuss the space sector and the challenges it faces, please contact our Space Practice leader.

Dr. Luigi Scatteia Partner, France PwC Space Practice Leader

Mobile: +33 6 42 00 71 67 Direct: +33 1 56 57 58 46 [email protected]

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About the PwC Space Practice The PwC Space Practice is part of PwC Advisory, and fully dedicated to the space sector. The core space strategy and policy team, based in Paris, is made of specialised professionals that handle space consulting across the global PwC network. Our expertise covers the entire space sector, and spans the space value chain, from upstream to downstream. We help entitire, public and private, face their business, technological, and governance challenges in constantly changing environments.

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