Launching services, national industries, and . . . rockets
Welcome to the fifth edition of Space Industry Insights - a fortnightly publication by satsearch discussing some of the trends and stories we’re observing at the global marketplace for space.
In this edition, we discuss our team’s perspectives on NewSpace, the space industry in India, and the launch segment. Enjoy!
NewSpace: thinking beyond lower costs and higher quality - part one
By Omkar N.
The NewSpace economy has flourished in the upstream market in recent years, but corresponding results for end users are yet to be experienced in the downstream market. Several NewSpace companies at the upstream level are prepared in terms of their space assets but are finding it difficult to navigate and target the right customer base in the global market.
In 2022 the satellite market (including both Earth Observation (EO) and satellite communication) recorded growth at the upstream level; with the Russia-Ukraine conflict being one of the key factors in emphasizing the benefits of modern space technologies to the world. Similarly, according to experts at Euroconsult, the commercial satellite communications market has also recorded growth in the upstream.
This growth in the upstream market is appreciable, but downstream applications for end users and the overall business model remain uncertain for many companies. The experiences of Non-Geostationary (NGSO) satellite operators, particularly those targeting Low Earth Orbit (LEO), can be considered a valuable case study for future NewSpace business models.
In the pool of NGSO operators, we can observe both privately and publicly funded operators. Companies such as Telesat, a traditional Geosynchronous Earth Orbit (GEO) operator also aiming to launch satellites in LEO, have received a significant amount of funding from the government while operators like OneWeb are supported by both public and private entities.?
Since their formation, both companies have signed a plethora of agreements, but are yet to maximize the full potential of their business. In addition, Telesat has reduced its constellation size from the planned 298 to 188 satellites. Such movements can indicate losses and delays in the deployment of NewSpace services.
Starlink by SpaceX is currently the only prominent player to successfully roll out LEO satellite internet services globally. And yet the company is unable to make profits, as per the latest reports.
This is just one side of the industry where NewSpace businesses are gradually being pushed to think beyond a traditional approach of 'low-cost and high-quality' services. Considering the market conditions and the upcoming global recession, the NewSpace sector has the opportunity to take a step back, think, and iterate its business models with the most suitable commercial targets. No businesses have succeeded without clean market targets, and the same applies to the NewSpace companies!
In part two of this article, I will be putting a spotlight on how NewSpace companies should navigate the industry in order to seek opportunities and scale their businesses. Stay tuned!
The international opportunities for India’s space industry - part three
By Kartik Kumar
In the previous edition of Space Industry Insights I introduced some of the changes that are now combining to provide an opportunity for commercial growth in India's space ecosystem. To continue this story, let’s next look at how the government’s policy framework is affecting the commercial environment.
One of the fundamental differences between the way that the space sector is enabled in India compared to Europe and the US is the lack of systematic government funding for innovation through the Technology Readiness Levels (TRL).
Companies are often required to fight it out themselves because of the lack of structural, consistent, and ongoing government support through established programs.
But there is a change in the air. As the Government of India seeks to enable the development of low-TRL technologies, however, it's likely that companies will have to prove their business models to be able to survive. In some sense, this harsher environment for space businesses has the potential to lead to the formation of companies that are much more financially viable in the long term.
The Ministry of Defence (MoD) recently announced the launch of Mission DefSpace under the iDEX program. Through Mission DefSpace, the aim is to support startups with funding (ranging from EUR 0.2M to 1.2M per company) and technical support, if they are able to address one of the 75 challenges cataloged by the different branches of the armed forces.
Tying this program to subsequent procurement by the armed forces offers startups a path towards working with the government, whilst retaining Intellectual Property (IP) for commercialization purposes.
Today, many Indian suppliers serve both the domestic and international markets, but if you compare the volume of trade to the overall size of the space industry, India has a significant opportunity to grow its share of the pie.
Through a concerted effort to set up government programs that go hand in hand with private capital inflows, Indian space companies have an excellent opportunity to carve out a robust place within the global commercial space industry.
For more information about the Indian space sector, please refer to this recent report released by the India Space Association (ISpA) and EY on the state of the sector and the associated opportunities and challenges.
Tracking emergencies en route
By Hywel Curtis
The unfortunate failure of Virgin Orbit's maiden launch from UK soil this week has again highlighted the difficulties involved in getting to space.
Though engineers obviously haven’t had time to investigate the full causes of the rocket's failure just yet, already we can see that this news, followed by the recent losses of the Vega C rocket, the ABL Space Systems RS1 orbital rocket, and 4 out of 10 of the CubeSats on the Artemis 1 mission, is prompting new discussion on the affordability and reliability of launch options for space companies; one of the key drivers of commercial value generation in this industry.
There are lots of elements to this conversation, but one important area that shouldn’t be overlooked is traceability and monitoring throughout the product supply chain and operational lifecycle. And here we have a great opportunity to learn from other industries.
Take cold chains for example – aka the movement of products that must be kept at low temperatures until their final destination is reached. In India, it is estimated that up to a third of the total food produced is lost due to cold chain failures; at huge economic costs.
Without robust traceability in place, it can be almost impossible to pinpoint where in a product’s journey from farm to plate a cold storage failure occurred. This is a bad situation where food is involved and can be even worse when the cargo is vaccines for example.
We’re also seeing other very sophisticated monitoring frameworks emerging to meet the needs of today’s international supply chains across all sectors, such as tracking total product emissions in the energy and transport sectors, ensuring an ethical supply ecosystem in fashion and jewelry, and protecting IP at a global level in consumer electronics.
These are all experiences and solutions that can be transferred to space, at some level. I’m not suggesting that we need something quite as detailed and robust for the space industry (not yet at least) but there are certainly many stages in a satellite’s lifetime for which new monitoring solutions are adding value, and for which access to operational data is playing an increasingly important role, such as:
As the industry continues to mature we expect to see more frameworks, systems, standards, and norms evolve in order to make the supply ecosystem more robust.
So while launch and deployment failures will still, sadly, occur, hopefully better tracking will enable us to more quickly identify the root causes and develop a more consistent and predictable supply chain.