Routes to Market Report 16 - Satellite Technologies for High Altitude Pseudo Satellite Communications Contents 1. Introduction and Scope ................................................................................................................... 2 2. Market Opportunities ..................................................................................................................... 2 2.1 Background ............................................................................................................................. 2 2.2 Application of HAPS ................................................................................................................ 3 2.3 Satcom Market Opportunity ................................................................................................... 3 3. Customer and End User .................................................................................................................. 4 4. Value Proposition for the Customer and End-User ........................................................................ 5 5. Market Competitiveness ................................................................................................................. 5 6. Role of UK Companies ..................................................................................................................... 6 7. Revenue Projections ....................................................................................................................... 6 8. SWOT Analysis ................................................................................................................................. 7 9. Opportunity Enablers and Actions .................................................................................................. 7 10. Market Dynamics ........................................................................................................................ 8 11. Market Trends ............................................................................................................................. 9 12. Five Take-Aways ........................................................................................................................ 10 1 The market for High Altitude Platforms is only just emerging following many years of false starts. Several propositions are being developed between now and 2020 that may finally establish the business case for their use. However, the platform population will remain modest so the satcom opportunity for equipment and service supply will reflect this. 1. Introduction and Scope This briefing covers the use of satellite communications in the High Altitude Pseudo Satellite (HAPS) sector. The sector covers long endurance platforms that remain on station above regulated air space and are used to provide communications and surveillance services. These are also called High Altitude Long Endurance (HALE) platforms. This market briefing addresses the need for satcom connectivity beyond line of sight, either for command and control or backhaul of communications from the HAPS platform. Consideration is given to the global opportunity over the period 2017 to 2030. As an adjunct to the sector, the use of sensor technologies and processing applications developed in the space Earth Observation sector is considered for surveillance applications from HAPS, particularly in the military sector. 2. Market Opportunities 2.1 Background High Altitude Pseudo Satellite (HAPS), or originally High-altitude platforms (HAPs), are aircraft positioned above 20 km altitude, in the stratosphere, in order to support a telecommunications network or perform remote sensing, for civilian or military applications. These aircraft may be airplanes, airships or balloons, manned or unmanned. HAPS have been around for a long time with much promised but not a great deal delivered yet. NSR released a market report at the start of 2017 than identifies the current state of play: ' Over the past two decades, HAPs have been slow to reach maturation for many applications. Some areas even saw a decline due to confusing regulations. But the current momentum in funding and market demand looks to carry the HAPs industry forward” At the World Radiocommunication Conference 1997 (WRC-97), the term “High Altitude Platform Station” (HAPS) was established, defined as a telecommunications station located at an altitude of 20 to 50 km and at a specified fixed point relative to the Earth. This shows that, at the time, there was a growing interest in HAPs as a complement to terrestrial and satellite-based communications networks. The altitude range adopted for HAPS operation, around 20 km, is chosen because at these altitudes the wind speed is less intense and, as a consequence, the HAP requires less power 2 to maintain position. Other important advantages are a large coverage area for telecommunications and a location above normal commercial airline traffic. The maximum altitude for controlled airspace varies from country to country, 20 km (65,000 ft) being a typical value, set at the time of Concorde commercial supersonic jet operation. 2.2 Application of HAPS The main HAP applications are in telecommunications and remote sensing, both civilian and military. In telecommunications some of the advantages of HAPs in relation to terrestrial networks (relay towers) are larger coverage area ((250 km to 400 km), less interference caused by obstacles (buildings, ground elevations) and shorter time to deployment. Compared to satellites, HAPs have the advantages of lower latency (transmission delay) and the possibility of return for maintenance or payload reconfiguration. For remote sensing, HAPs have an important advantage over satellites with the ability to remain continuously over an area for very long periods (persistence). Another advantage is better resolution images, because they are closer to the covered areas. According to the NSR report, the main driving applications for HAPS are: Communications (28% of market) – provision of a radio communications node to users on the ground remote sensing and surveillance using imaging and sensing payloads (26%) navigation – provision of a local reference (5%) scientific research and technology testing (33%) There are also emerging applications, predicted by NSR to cover 8% of the market, including adventure tourism, orbital access and entertainment. Credence Research takes a different view: The market for high altitude platforms (HAPs) is dominated by the surveillance systems segment with a market share of more than 70%, in terms of revenue, globally. Nevertheless, communication systems segment is predicted to witness the highest growth in the coming years. During the forecast period, the communication segment is expected to expand with a CAGR of 11.4%, globally. If the sensing and scientific sectors of the NSR forecast are combined to give a 59% share, this may enable the two views to be reconciled, with the faster growth in communications increasing its overall share. 2.3 Satcom Market Opportunity In some respects, the communication node could be seen as a competitor to satcoms, providing a mobile phone cell or broadband node on a temporary basis to a remote area. For satcoms the opportunities arise from the need to relay communications beyond line of sight 3 (backhaul from the HAPS) and the possible adaptation of satcom terminal equipment to HAPS payload use. In the case of HAPS backhaul, the satcom opportunities are: Provision of satcom terminals to the HAPS Provision of the satcom service from the HAPS to the operator position, via a ground station In addition, as the largest application for HAPS is predicted to be surveillance, there may be synergy with sensors and applications developed for the Earth Observation sector. The NSR report shows a market worth potentially a few hundred million dollars a year by 2025; a similar number has been derived from reports by Credence Research. However, the addressable market for satcom equipment and service providers is only a fraction of this. Although not a large market, UK industry is investing in HAPS with the Zephyr programme, privately funded dirigible activities such as Airlander 10 and the purchase of UK manufacturer Ascenta by Facebook. This provides is a knowledge base in the UK that could be exploited by the UK space industry. 3. Customer and End User The customers for satcom enabled HAPs (potentially greater than 54% of HAPS applications) divide into the: Platform manufacturer for the satellite terminal equipment Platform operator for the delivery of the integrated communications service Platform manufacturer for the EO based payload From an analysis of available data on the 12 major HAP projects of the past ten years, it is noted that seven were closed without achieving results that would ensure continuity but that five are in progress with some prospect of commercial sustainability: Airbus Zephyr (military comms and surveillance) Thales Stratobus (Defence but with wider application) Google Loon (Internet access in remote areas) Google Solara 50 (Internet access in remote areas) Facebook Aquila (Internet access in remote areas) Aquila is of interest in that Facebook purchased a small UK company to develop the platform. In addition, China is undertaking more research on HAPS that all other nations combined although there is little detail on active programmes. Globally, NSR estimate that 30 platforms are in development or production and that this number will grow over the next five years