Routes to Market Report
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Routes to Market Report 30 - Satellite Technologies for Space Launch Services 1 1. Contents 1. Contents ................................................................................................................................................ 2 2. Introduction and Scope ......................................................................................................................... 3 3. Market Overview and Opportunities .................................................................................................... 4 4. Customer and Value Proposition to Customer and End-User .............................................................. 7 4.1. Earth Observation Customers ....................................................................................................... 7 4.2. Communication Customers........................................................................................................... 7 5. Value Chain and Competing Solutions .................................................................................................. 8 5.1. Competition from the UK Perspective .......................................................................................... 9 Japan ................................................................................................................................................... 10 Spain .................................................................................................................................................... 10 India .................................................................................................................................................... 10 Sweden ................................................................................................................................................ 10 6. Role of UK Companies ......................................................................................................................... 10 7. Revenue Projections ........................................................................................................................... 12 8. Market Enablers .................................................................................................................................. 12 9. Challenges and Steps to be taken ....................................................................................................... 13 10. Market Dynamics and Value Chain ................................................................................................. 14 11. Market Trends ................................................................................................................................. 16 11.1. The UK Perspective ................................................................................................................. 16 2 2. Introduction and Scope The number of new, small-satellite operators has increased over the last 5 years, enabled by the availability of standardised small-satellite hardware at relatively lower prices, which allows operators to develop assets at lower cost. This dynamic will continue to disrupt the competitive landscape and new suppliers are expected. However, the key challenge faced by small-satellite operators is the lack of dedicated launch services for small-satellites, forcing them to adopt the existing ride-share opportunities which can be prohibitively expensive. This lack of affordable access to space continues to keep space capabilities away from businesses that are willing to invest in next-generation satellite services for earth-observation and connectivity. Table 1 provides the terminology relevant to this analysis and the space launch market this study covers. Alongside small-satellites, nano and micro-satellites are gaining prominence. Table 1: Definitions Small-satellite Small form satellites weighing 500 kg and less Nano-satellite Small-satellites up to 10 kg Micro-satellite Small-satellites up to 150 kg Spaceport Dedicated launch infrastructure focused on LEO/sub-orbital launches Table 2 presents a summary of the main space launch market trends and expected outcomes. The key aspect of space launch market in the United Kingdom will be the accessibility of infrastructure and regulatory framework that can support a diverse group of affordable launch service providers. This will require the government agencies (UK Space Agency and UK Department of Transport) to evolve and implement necessary regulatory framework to accommodate space launch services and launch operators (domestic and international). The presence of affordable launch services in the United Kingdom will be an enabler to small-satellite operators in the United Kingdom and EU region. A spaceport based launch service market will not only enable small-satellite launches but also support the still evolving space tourism and high-speed air travel segments. Spaceports in the United Kingdom (to be developed) will be covering conventional rocket launches and air-launched rocket systems which will be a key differentiating factor for the business model the spaceport business will establish. For this purpose, the spaceport will not only require dedicated land space but also a specially dedicated and regulated air space consistent with the launch operations requirements. 3 Table 2 Market Trends across Timeline and Expected Outcomes (Source: Frost & Sullivan) TRENDS ACROSS TIMELINE KEY MARKET KEY EVOLVING (1- FUTURE FAR FUTURE CURRENT FEATURES STAKEHOLDERS 2 years) (3-6 years) (7-10 years) No Development Persistent Affordable dedicated of dedicated Long-term Launch capability demand for access to LEO small- LEO small-sat launch developers and LEO small-sat LEO/sub- sat launch launch contracts operators launches orbital space capability capability Scheduled Demand for single/multi- Small- More small- polar/equato Sustainable Small-satellite manifested satellite satellite rial/mid- small-satellite operators and launches spread operators operators latitude LEO industry manufacturers across the launches calendar Dedicated Dedicated Sustainable Government airspace Spaceport Spaceport infrastructure LEO/sub- agencies, air & allocation and developmen business for LEO/sub- orbital space space regulators evolution of ts models orbital launch and spaceport regulatory launches industry operators framework 3. Market Overview and Opportunities Chart 1 below indicates the launch forecast for small-satellites during 2014-2023. Multiple research groups [GeoOptics Inc.’s CICERO constellation] are fielding their experimental small-satellites with the objective of commercial business models, should their technology demonstration succeed. While the number of small-satellite operators seems relatively small, the number of small-satellites expected to be launched are much higher (currently, over 2,270 satellites are expected to be in orbit while during 2016- 2023, over 2,500 small-satellites are expected to be launched). OneWeb, a small-satellite start-up, is planning to install a 720 satellite constellation for wireless broadband services to remote location not connected with fiber-optic network. Planet, which already has over 100 small-satellites in operation, is planning to expand its fleet. As given in Chart 1 below, the total quantum of small-satellites to be launched during 2016-2023 is estimated to be 2,591. The current space launch industry does not have any dedicated launch services for small-satellites and therefore does not have the launch capacity to meet this approaching surge in demand. Moreover, small- satellite operators are aiming to place their payloads in mid-latitude orbits which is not frequented by existing launch capabilities and this means there is an emerging demand for unique orbital placements which cannot necessarily be supported with conventional rideshare capabilities. Multiple space launch developers [listed below] are currently working on diverse launch technologies for small-satellites and some of these developers are also preparing to be launch operators looking to conduct scheduled LEO launch operations. The entry of small-satellite based commercial businesses has 4 substantiated the approaching ‘persistent-demand’ for scheduled LEO launches for small-satellite payloads. The key aspect of the LEO space launch market development is that the launch operators are aiming to offer low-cost launch services to small-operators who might not have the big budgets to afford existing launch capabilities. The objective is to develop reliable cost-effective technologies that can allow affordable launch opportunities for small-budget business models. The small-satellite operators are developing business models to cover a diverse range of customer groups. In the earth-observation domain, ‘pay-per-picture’ purchase option is gaining prominence as imagery sales are looking to cover ad- hoc purchases suitable for individual stakeholders. In the connectivity domain, the focus is shifting from providing exclusively upstream augmenting capacity to delivering full solutions where the end-user can get the air-time and hardware from the satellite operators and/or their regional channel partners. The connecting link among these trends is the fact that the satellite operators are using small-satellite systems for their services which they have developed with extremely small budgets. Such democratised satellite capabilities distribution covering diverse customer groups at low costs require suitable low cost access to space which is the current capability