Consumer satellite broadband will be a major driver of industry growth over the next year, according to Space Systems Loral president John Celli.
Manufacturers experienced a stronger year than expected in 2009, with 27 commercial satellite contracts…
Consumer satellite broadband will be a major driver of industry growth over the next year, according to Space Systems Loral president John Celli.
Manufacturers experienced a stronger year than expected in 2009, with 27 commercial satellite contracts awarded worldwide. SS/L picked up 7 of those contracts, and its President believes this success can be replicated in 2010.
“I think this year will still be a good year, it is hard to predict,” said Celli. “We will still see replacement satellites driving the market but I believe broadband will be a major factor as well.”
SS/L has established itself as the major manufacturer for broadband satellites in the US. It is currently developing extremely high-powered Ka-band satellites for ViaSat and Hughes that will launch in 2011 and 2012 respectively, forming the cornerstone of what has been a genuine boom industry in recent years.
Celli pointed out that SS/L has a long history in satellite broadband. He said: “We have 27 satellites in orbit with Ka-band payloads and we have four more currently under construction. Many of the Ka-band payloads were on multi-mission satellites.”
The SS/L President believes that demand is only going to rise for this kind of consumer broadband, and he anticipates this demand being reflected in new business for manufacturers sooner rather than later. “As demand continues to rise, there will probably be more broadband satellite orders in the US before the end of the year,” he said.
The consumer satellite broadband model pioneered in the US is set to be introduced to the European market with the imminent launch of Ka-band satellites by Avanti and Eutelsat.
SS/L has less of a presence in the European market, but Celli argues that its expertise in this area should make it a potential player in new broadband satellite orders there.
“Europe has been a little slow in pushing broadband but US success should push that market,” he said. “I suspect that broadband will be in high demand in Eastern Europe particularly.
“I don’t see why we can’t penetrate the European broadband market. We have more experience with this kind of satellite than anyone else, and we can support that new demand.”
One area where SS/L is looking to emulate European manufacturers is working with operators to gain backing from export credit agencies to finance satellite projects.
Celli confirmed that Loral is definitely open to supporting its clients in the negotiations process, especially now that the Export Import Bank of the United States (ExIm) has displayed its willingness to work with satellite operators.
He said: “Recently ExIm and COFACE have been very active supporting operators in getting access to credit. ExIm has been a little slower but they are now getting to the point where they can support new businesses a little faster than they have done in the past.
“Both institutions are interested in supporting the market, which is doing well and showing good growth.”
Broadband is not the only area where SS/L sees major growth potential. Celli pointed towards the growth of high definition services and the introduction of 3D as two new major bandwidth-hungry developments in the broadcast sector that will drive up demand for new capacity.
This is one reason why SS/L will be holding to its philosophy of focusing on large satellites as its main business. Celli is also of the opinion that the current state of the launch market, with just Arianespace and ILS as the only real options, pushes operators more towards larger satellites.
This is because the lower number of flights per year resulting from this situation causes operators to ensure that as much capacity as possible can be launched on one single flight.
“At the moment there’s only two major launch vehicles – I’m not considering Atlas because of its price and scheduling,” he said. “If the prices were to go down because someone else enters the market, either Sea Launch returning or hopefully the introduction of SpaceX, that makes the business plan for smaller satellites more attractive.”
For now, SS/L is confident that it can maintain the 40% share it currently holds in the market for large satellites in the 8kW and above power range. It currently has a backlog of eighteen spacecraft in various stages of development.
In conjunction with the major operators, SS/L is also looking towards hosted government payloads as an area that will expand in scope. The company has a history of building satellites for this purpose, and the growing need for efficiency and economy in US space missions offers a great opportunity.
“I believe that hosted payloads for US government programs make sense in terms of cost,” said Celli. “Even with funding restrictions there is a lot the US can do with smaller payloads. You have to keep in mind that the Intelsat fleet has been serving the US government for many years, and many of those spacecraft have been made by Space Systems Loral.”
He stated that an expansion of the US hosted payload market can be achieved through a streamlining of the application process for manufacturers, as there are now no technical issues or worries about their ability to deliver projects on schedule.
SS/L is also unlikely to be adversely affected by the new direction NASA has taken in its 2011 Budget, which cancelled the Constellation Moon mission. The company is happy to pick off smaller NASA contracts, like the one it recently won to deliver a propulsion system for the Lunar Atmosphere Dust Environment Explorer.
