Demand for new satellites continues to be strong as new ventures call for increasingly complex systems and emerging space nations take steps to increase their independence.
SatelliteFinance speaks with Richard Currier, SVP of business development at…
Demand for new satellites continues to be strong as new ventures call for increasingly complex systems and emerging space nations take steps to increase their independence.
SatelliteFinance speaks with Richard Currier, SVP of business development at US-based satellite maker Space Systems Loral, to hear his thoughts on the industry and its future.
Jason Rainbow: How has SSL’s business grown following its sale to Canada’s MDA nearly three years ago?
Richard Currier: Post transaction, our core geostationary communication satellite business has grown, as has what we refer to internally as our emerging business, which is anything beyond the traditional. 2014 was a very strong year for us. We announced contracts for nine geostationary satellites, which was a record year for us. Outside of that business, we’ve also been successful with companies like Skybox Imaging.
Working together with MDA, we’ve been able to broaden what we’re able to offer customers. MDA has a strong history with radar satellite constellations, communications payloads, robotics, and information systems, to name some examples. Those capabilities can sometimes help us provide very attractive integrated offerings.
Beyond satellite hardware and expertise, there are other factors such as financing and in-country partnerships.
JR: How much of an advantage does having access to two export credit agencies give over other manufacturers?
RC: I’d say it gives us added flexibility. We have successfully assisted our customers in obtaining financing from both Export Development Canada and US Ex-Im Bank. Sometimes this helps us provide a more compelling solution in support of the satellite operators’ overall business plan.
JR: Is export credit still a huge influence in the market, and will NewSat’s high-profile failure impact how keen these banks are to support the satellite industry?
RC: I’m not sure I’d say it’s huge. It’s one of many components that influences what happens with an operator. In terms of what’s happened recently with NewSat, to my knowledge it’s the only case among either Coface, Ex-Im or any other ECAs that’s gone that way.
Given what’s been an overall strong industry for ECAs, I would expect there will be a few lessons learned, in terms of diligence and in the approval process, but other than that I wouldn’t expect any fundamental changes in the long term because, if you look at the decades-long track record for this, the ECAs have gotten a good return on their investments.
JR: SSL is best known for making huge satellites, but lately you’ve been seen to branch into the smaller market too, with Skybox Imaging being a case in point. Is this an area you are going to increasingly focus on?
RC: At a company level, our main focus remains on the GEO communications market, but we are also looking for other areas where our broad capabilities can add value. This extends to small satellites and related systems. We’re very gratified to be working with Skybox Imaging and what we have learned from the process positions us well for additional smaller/LEO programmes.
Another example of a capability that we’ve developed and we’re offering to customers is something we refer to as Payload Orbital Delivery Systems (PODS). It’s a variation of a hosted payload but enables us to place a small geostationary standalone payload on a traditional satellite, which it will ride with to orbit. Once the satellite and the PODS get to GEO, we eject the small payload which remains in GEO but carries on with its own separate mission.
It’s a way to get payloads on the order of 15 kg, more or less, into geostationary orbit. SSL has also developed a microsatellite bus for this purpose. So Skybox is a good example of how we are utilising our experience and technological expertise for a broadening variety of space missions.
JR: Does that mean SSL is looking to get involved in the plethora of LEO satellite projects that have been cropping up recently?
RC: Together with parent company MDA, we have significant capability to bring to companies working on LEO constellation opportunities. We are not just providing technical expertise and manufacturing experience but support for the full business plan. That said, our core business remains geostationary satellites.
JR: How do you see the balance between your traditional business and this emerging business playing out in the future?
RC: Since we have such a strong geostationary communication satellites business, it will remain the majority of our business for some time, but we are also very motivated to grow our business in the emerging areas. We can offer significant support to new ventures facing the challenges of starting a new business, across the board, and we can help start-ups achieve business success.
On the GEO side, the increased flexibility of launch vehicles – where we’re seeing a migration in the direction of variable pricing for variable launch performance and separated mass – is stimulating a greater breadth of small, medium and large satellites across the range. We are responding to that by seeking to be very efficient on a full range of geostationary satellites sizes.
JR: Is the industry shifting to a future where HTS GEO satellites will be interconnecting with those in LEO?
There’s quite definitely a possibility for that. Those types of interconnected architectures have been proposed for a while, and doing that would take advantage of the relative efficiencies of LEO and GEO. It could allow for more interconnected solutions with the potential to be more competitive against terrestrial-based services.
As a specific example, Intelsat recently announced that it has made a minority investment into OneWeb and will combine GEO and LEO capabilities including collaboration to develop hybrid LEO/GEO end-user access terminals.
Our whole industry is in essence competing primarily with terrestrial services, and I think this additional level of efficiency could help us there. We’ll have to see.
JR: What other innovations do you see on the horizon for the industry?
RC: There are two main areas the industry is focusing on. One is increased flexibility, especially on the payload side, enabling operators to do more, make better adjustments, and reconfigure the capability of the satellite while in orbit to align it to evolving markets and demand over time.
Another is an increased focus on standardisation to essentially allow for shorter schedules and a higher level of cost efficiency.
JR: Companies/countries ordering their first spacecraft continue to play a part in the demand for new satellites. What challenges does your company face in helping companies design their first satellite?
RC: We have a long history of helping start-ups become industry players. We worked with a company called CD Radio back in the 1990s to help it get its business going. That company became Sirius Satellite Radio and ultimately part of Sirius XM Radio, which now has a market cap of more than US$20bn.
We see helping new operators as an opportunity rather than a challenge and we are happy to partner with them closely in terms of bringing the whole solution together. We can help on many levels and like to share the benefits of our many years of experience. We help new operators lower the cost of the full end-to-end solution with services such as on orbit delivery, ground systems, financing, training and internship programs, and more.
JR: These companies are increasingly also weaving in industry knowhow and expertise into their inaugural satellite contracts to help build a sustainable domestic space industry. What is SSL’s approach to this kind of technology transfer?
RC: We were very successful with our engineering internship for the Qatar satellite operator, Es’hailSat. When we built the EUTELSAT 25B/ Es’hail 1 satellite, which was launched in 2013, the programme included an intensive two-year training, which helped prepare four Qatari engineers to become the nation’s first satellite operator engineers. We have another internship programme underway now. We have to follow strict export control regulations, but it is definitely something that we offer.
JR: The satellite manufacturing market is still tipped as being ripe for consolidation. Do you expect more deals to happen here and, if so, what size of companies will likely take part?
RC: I’m not sure that I see any fundamental changes in terms of what would or would not drive consolidation. I’m sure opportunities will continue to be looked at on a case by case basis
JR: Is there pressure on manufacturers to cut costs and gain scale through consolidation?
RC: In recent years the satellite industry has had roughly 20+ satellite manufacturing opportunities annually. Market analysts expect that it will stay in that range for the next few years. So I don’t see how the fundamentals have changed that would influence a different approach. There has always been cost pressure on manufacturers and that hasn’t changed either.
JR: Where do you predict demand for satellites will come from in the future?
RC: Digital data and telecommunications traffic continue to increase around the world with no limit in sight. For example, last year we contracted to build the first ever satellite for a bank. All of the capacity available from satellite operators in the region was not projected to be enough to meet the future needs of Indonesian bank BRI.
In addition to this kind of enterprise demand, we see television, private business networks, data and voice, consumer broadband, and mobile communications for the maritime and aviation markets all driving the need for more satellites.
The world is becoming increasingly more connected and trends like the internet of things together with HTS driving down the cost per bit for satellite capacity, mean that a wealth of new applications will emerge. In addition, I expect satellite to play a growing role in non-linear television and media personalisation, and that the future will bring more and more hybrid satellite and terrestrial solutions where the vehicle to transport the data is transparent to the end user. Most individuals and businesses don’t care whether they are getting information through fibre, wireless or satellites, they just want ubiquitous, reliable connectivity, anytime, anywhere and on any device. In my lifetime in the industry, I have only seen growth and I expect that to continue.
