Author Topic: Recession of global satellite industry in 2016  (Read 4882 times)

Offline Katana

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Recession of global satellite industry in 2016
« on: 08/28/2017 06:24 AM »
13% shrink in satellite manufacturing industry, 0.2% growth in satellite services industry, 2% growth in launcher industry (while the launcher industry is extremely small).
Total 2% growth are majorly contributed from 7% growth in satellite ground equipment industry, mostly GNSS chips in mobile phone.

Doubtful market demand to support large LEO constellations in future, ironical compared to crazy boom in small launcher projects.

Another "Iridium recession" is coming?

http://spaceref.biz/organizations/satellite-industry-association/sia-2017-state-of-the-satellite-industry-shows-2-growth-and-revenues-of-260-billion.html

« Last Edit: 08/28/2017 06:32 AM by Katana »

Offline guckyfan

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Re: Recession of global satellite industry in 2016
« Reply #1 on: 08/28/2017 06:47 AM »
Doubtful market demand to support large LEO constellations in future, ironical compared to crazy boom in small launcher projects.

So people in rural areas really don't like to have fast internet. Brilliant analysis.

Offline high road

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Re: Recession of global satellite industry in 2016
« Reply #2 on: 08/28/2017 08:16 AM »
Or the opposite: the satellite industry anticipating the new smallsat launchers coming online or prices to start/continue dropping, and are awaiting the new prices and specs before they start building new satellites.

Edit: or the established players expect competition to go up from new players branching out, so they're not investing anymore, while new players are not yet ready to start.
« Last Edit: 08/28/2017 08:20 AM by high road »

Offline su27k

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Re: Recession of global satellite industry in 2016
« Reply #3 on: 08/28/2017 11:27 AM »
mainenginecutoff.com interviewed SpaceNews' Caleb Henry about this: https://mainenginecutoff.com/podcast/57, it looks like 2017 is worse, only 4 GEO commsat orders so far. The reason seems to be uncertainty caused by HTS satellite and large LEO constellations.

Offline gongora

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Offline Katana

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Re: Recession of global satellite industry in 2016
« Reply #5 on: 08/29/2017 03:46 AM »
Or the opposite: the satellite industry anticipating the new smallsat launchers coming online or prices to start/continue dropping, and are awaiting the new prices and specs before they start building new satellites.

Edit: or the established players expect competition to go up from new players branching out, so they're not investing anymore, while new players are not yet ready to start.
The satellite service section also experienced growth rate down to 0.2%, at the edge of decay.
It's hard to imagine end users waiting for next generation technology and stop buying services now.

Offline meekGee

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Re: Recession of global satellite industry in 2016
« Reply #6 on: 08/29/2017 04:24 AM »
One interpretation is that GEO operators are hesitant to invest in 20 year assets when constellations are around the corner.

Ironically, this may be a self-fulfilling prophecy.
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Offline Steven Pietrobon

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Re: Recession of global satellite industry in 2016
« Reply #7 on: 08/29/2017 07:47 AM »
So people in rural areas really don't like to have fast internet. Brilliant analysis.

Yes, they would like to have fast internet, but the rural population is not very big and therefore not profitable. The same mistake was made with Iridium.
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Online ChrisWilson68

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Re: Recession of global satellite industry in 2016
« Reply #8 on: 08/29/2017 10:20 AM »
So people in rural areas really don't like to have fast internet. Brilliant analysis.

Yes, they would like to have fast internet, but the rural population is not very big and therefore not profitable. The same mistake was made with Iridium.

No, Iridium was counting on the opposite of rural folk -- they were going after the rich, globe-trotting travelers.  And they were going after the mobile market, not the home/business market.  The new constellations may or may not be financially viable, but if they aren't, it won't be because they made Iridium's mistakes.

Also, it's worth noting that while Iridium in 1999 wasn't viable, Iridium in 2017 is viable.  And it's not just because they don't have to pay the sunk cost of their constellation.  They're in the process of putting up a whole new replacement constellation, and they have the business to pay for it.

Online ChrisWilson68

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Re: Recession of global satellite industry in 2016
« Reply #9 on: 08/29/2017 10:24 AM »
The data in the first post contradicts the title of this thread.  There wasn't a recession of the global satelite industry in 2016.  It grew by 2%.  2% growth is not a recession.

Offline high road

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Re: Recession of global satellite industry in 2016
« Reply #10 on: 08/29/2017 01:31 PM »
So people in rural areas really don't like to have fast internet. Brilliant analysis.

Yes, they would like to have fast internet, but the rural population is not very big and therefore not profitable. The same mistake was made with Iridium.

No, Iridium was counting on the opposite of rural folk -- they were going after the rich, globe-trotting travelers.  And they were going after the mobile market, not the home/business market.  The new constellations may or may not be financially viable, but if they aren't, it won't be because they made Iridium's mistakes.

Also, it's worth noting that while Iridium in 1999 wasn't viable, Iridium in 2017 is viable.  And it's not just because they don't have to pay the sunk cost of their constellation.  They're in the process of putting up a whole new replacement constellation, and they have the business to pay for it.

All the more reason not to put up new expensive satellites right now. Old and aging satellites might need to be replaced, but new ones can wait a few years, rather than risk them facing competition from cheaper smallsats before the profits cover the investment. And even if the smallsat networks turns out not to be workable, the losses will probably be lower.

Or the opposite: the satellite industry anticipating the new smallsat launchers coming online or prices to start/continue dropping, and are awaiting the new prices and specs before they start building new satellites.

Edit: or the established players expect competition to go up from new players branching out, so they're not investing anymore, while new players are not yet ready to start.
The satellite service section also experienced growth rate down to 0.2%, at the edge of decay.
It's hard to imagine end users waiting for next generation technology and stop buying services now.

That is a good remark. Maybe increasing competition with 3/4G mobile data coverage via landbased networks, internet television and increasing connectivity to fiberoptic networks in more or less urban areas eating into their profit margins? This increases the need for new markets, so that's a good thing in the long term.
 

Offline ZachF

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Re: Recession of global satellite industry in 2016
« Reply #11 on: 08/29/2017 07:40 PM »
A good chunk of this could be explained by currency fluctuations. The US dollar gained a lot of value in 2015/16. In nominal US dollar terms the global economy was "smaller" in 2016 than it was in 2013.

https://knoema.com/tbocwag/gdp-by-country-statistics-from-imf-1980-2021?subject=U.S.%20dollars&country=World

If we go by share of world GDP, then the satellite industry looks like this:

2016: 261/75278.0 = 0.347%
2015: 255/74196.8 = 0.344%
2014: 247/78519.6 = 0.315%
2013: 231/76458.2 = 0.302%
2012: 210/74437.7 = 0.282%
2011: 177/73083.8 = 0.242%
2010: 168/65899.8 = 0.255%
2009: 161/60279.1 = 0.267%
2008: 144/63650.7 = 0.226%
2007: 122/58052.0 = 0.210%

Steadily outpacing the global economy as a whole.

Looks pretty good to me, there was a recession in 2009/10 it seems



Offline meberbs

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Re: Recession of global satellite industry in 2016
« Reply #12 on: 08/30/2017 05:48 PM »
Also, it's worth noting that while Iridium in 1999 wasn't viable, Iridium in 2017 is viable.  And it's not just because they don't have to pay the sunk cost of their constellation.  They're in the process of putting up a whole new replacement constellation, and they have the business to pay for it.
This is worth repeating, because people keep pointing to what originally happened with Iridium, when Iridium is going through the cost of a full replacement right now. The market has changed.

Also, as others have said above, decline in growth of GTO sat orders is happening due to operators wanting to see what happens with the LEO constellations. (This is not just speculation but was heard from someone at a major manufacturer.)

Offline Katana

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Re: Recession of global satellite industry in 2016
« Reply #13 on: 08/31/2017 10:09 AM »
So people in rural areas really don't like to have fast internet. Brilliant analysis.

Yes, they would like to have fast internet, but the rural population is not very big and therefore not profitable. The same mistake was made with Iridium.

No, Iridium was counting on the opposite of rural folk -- they were going after the rich, globe-trotting travelers.  And they were going after the mobile market, not the home/business market.  The new constellations may or may not be financially viable, but if they aren't, it won't be because they made Iridium's mistakes.

Also, it's worth noting that while Iridium in 1999 wasn't viable, Iridium in 2017 is viable.  And it's not just because they don't have to pay the sunk cost of their constellation.  They're in the process of putting up a whole new replacement constellation, and they have the business to pay for it.
So the Iridium becoming profitable does not imply other LEO constellations counting on rural areas are profitable.

Offline Katana

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Re: Recession of global satellite industry in 2016
« Reply #14 on: 08/31/2017 10:52 AM »
So people in rural areas really don't like to have fast internet. Brilliant analysis.

Yes, they would like to have fast internet, but the rural population is not very big and therefore not profitable. The same mistake was made with Iridium.

No, Iridium was counting on the opposite of rural folk -- they were going after the rich, globe-trotting travelers.  And they were going after the mobile market, not the home/business market.  The new constellations may or may not be financially viable, but if they aren't, it won't be because they made Iridium's mistakes.

Also, it's worth noting that while Iridium in 1999 wasn't viable, Iridium in 2017 is viable.  And it's not just because they don't have to pay the sunk cost of their constellation.  They're in the process of putting up a whole new replacement constellation, and they have the business to pay for it.

All the more reason not to put up new expensive satellites right now. Old and aging satellites might need to be replaced, but new ones can wait a few years, rather than risk them facing competition from cheaper smallsats before the profits cover the investment. And even if the smallsat networks turns out not to be workable, the losses will probably be lower.

Or the opposite: the satellite industry anticipating the new smallsat launchers coming online or prices to start/continue dropping, and are awaiting the new prices and specs before they start building new satellites.

Edit: or the established players expect competition to go up from new players branching out, so they're not investing anymore, while new players are not yet ready to start.
The satellite service section also experienced growth rate down to 0.2%, at the edge of decay.
It's hard to imagine end users waiting for next generation technology and stop buying services now.

That is a good remark. Maybe increasing competition with 3/4G mobile data coverage via landbased networks, internet television and increasing connectivity to fiberoptic networks in more or less urban areas eating into their profit margins? This increases the need for new markets, so that's a good thing in the long term.

Land based networks coverage rate is approaching 75% in Africa, growing steadily at >5%  per year.
Full coverage of Africa could be happening in about  5 years (or less).


Coverage of Huawei, Chinese aggressive low cost telecom equipment vendor.


Those networks are part of strategical investment of China on African infrastructures, built similar to Chinese domestic version, highly competitive on cost and performance.

This reduce the market size of "rural satellite networks" permanently.

Also note the structure of satellite industry is unhealthy, most of significant growth (7%) occurs in GNSS modules market, which is virtually a consumer electronics market.

Both problems implies the satellite industry becomes less competitive compared to "normal" information technology industry.
« Last Edit: 08/31/2017 10:58 AM by Katana »

Offline Kansan52

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Re: Recession of global satellite industry in 2016
« Reply #15 on: 09/07/2017 11:22 PM »
So people in rural areas really don't like to have fast internet. Brilliant analysis.

Yes, they would like to have fast internet, but the rural population is not very big and therefore not profitable. The same mistake was made with Iridium.

Just saw this. Supporting your point would be Direct TV and Hughes when the first Direct TV started. They sold the rights of selling rural coverage to the rural cooperatives. The co-ops like it because they already sold C-band systems.

Offline savuporo

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Offline rayleighscatter

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Re: Recession of global satellite industry in 2016
« Reply #17 on: 09/09/2017 01:45 PM »
Operators aren't waiting on constellations, or launchers, or any of that. Most of them are waiting on demand to catch up to the current capacity oversupply. Launching new satellites now would only exacerbate the problem.

Online Ronsmytheiii

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Re: Recession of global satellite industry in 2016
« Reply #18 on: 09/09/2017 02:43 PM »
Or with a lot of launches over the past few years, there is just too much capacity.

From Rupert Pearce, chief executive of Inmarsat:

Quote
“We are moving into an era of unprecedented capacity,” he said, calculating that the amount of broadband satellite bandwidth is set to boom by a factor of four by 2020 but demand only by a factor of three. “There is a massive glut. Investors are very concerned about what that means. Normally that is an environment where an industry would consolidate,” he says.

https://www.ft.com/content/a28ddb38-8021-11e6-8e50-8ec15fb462f4
« Last Edit: 09/09/2017 02:44 PM by Ronsmytheiii »

Offline butters

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Re: Recession of global satellite industry in 2016
« Reply #19 on: 09/10/2017 02:08 PM »
I watch the snazzy corporate promotional videos during the launch webcasts, especially Arianespace, explaining their coverage areas and beam-pointing capabilities and something something about helping first responders, and I often have no clue how these GEO comsats function in the context of commercial services. I assume they mostly carry TV but not necessarily directly to satellite TV subscribers, mostly syndication streams between networks?

If so, keep in mind that television is being disrupted by streaming video over the Internet. Are the GEO comsat operators threatened by this transition in video distribution from broadcast to streaming? Are their services relevant to IP networks?

Online FutureSpaceTourist

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Re: Recession of global satellite industry in 2016
« Reply #20 on: 09/10/2017 03:42 PM »
Quote
Boeing wins SES contract to build second-generation O3b satellite constellation
by Peter B. de Selding | Sep 10, 2017

PARIS — Satellite fleet operator SES has awarded Boeing a contract to build seven satellites as part of SES’s second-generation medium-Earth-orbit constellation, formerly known as O3b, according to industry officials.

https://www.spaceintelreport.com/boeing-wins-ses-contract-build-second-generation-o3b-satellite-constellation/

More details in article; says SES targeting US DoD as significant end-user.

Offline dkovacic

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Re: Recession of global satellite industry in 2016
« Reply #21 on: 09/10/2017 04:59 PM »
This is not unexpected, since O3b constellation has been the only growth opportunity for SES. With this latest expansion O3b fleet will reach 27 satellites with option to raise to over 40. I would expect that total throughput of MEO could overtake their GEO capacity. At the same time they order larger batches, move aggressively to use reusable F9 for geosats, go for full electric satellites. I think they acknowledge that GEO is in the long term recession, since they have not been aggressive with GEO HTS.

Their gradual shift towards large constellation might be a winner in the long run as opposed to SpaceX and OneWeb. O3b is profitable now, and has several years lead time compared to others.

Offline Sam Ho

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Re: Recession of global satellite industry in 2016
« Reply #22 on: 09/10/2017 05:42 PM »
I watch the snazzy corporate promotional videos during the launch webcasts, especially Arianespace, explaining their coverage areas and beam-pointing capabilities and something something about helping first responders, and I often have no clue how these GEO comsats function in the context of commercial services. I assume they mostly carry TV but not necessarily directly to satellite TV subscribers, mostly syndication streams between networks?

If so, keep in mind that television is being disrupted by streaming video over the Internet. Are the GEO comsat operators threatened by this transition in video distribution from broadcast to streaming? Are their services relevant to IP networks?
In the SIA report referenced in the OP, there is a breakout of Satellite Services Revenue.

Three-quarters ($97.7B) of the 2016 revenue is in Satellite TV (direct-to-home).  Distribution mostly shows up in transponder agreements, which are about 10% of the market.

Satellite broadband is a tiny (about 1%) part of the market now, but growing.

http://www.sia.org/wp-content/uploads/2017/07/SIA-SSIR-2017.pdf

Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #23 on: 09/11/2017 12:21 PM »
Just as a recap for anyone who has missed all gloomy news about comsat orders this year

http://spacenews.com/lack-of-satellite-orders-triggers-layoffs-at-space-systems-loral/
Quote
SSL President John Celli said an “extended slowdown” in orders for geostationary orbit communications satellites

Quote
http://spacenews.com/mda-slashes-geo-order-expectations/
Quote
Commercial satellite operators will probably order half as many geosynchronous satellites this year than usual, deepening a drought that has affected satellite manufacturers

Quote
http://spacenews.com/orbital-atk-increases-government-satellite-work-to-make-up-for-commercial-shortfall/
Quote
Orbital ATK President and Chief Executive David Thompson said demand for commercial geostationary orbit communications satellites remained weak.

Yup, there is a pattern -- for GEO sats.


In the SIA report referenced in the OP, there is a breakout of Satellite Services Revenue.

Three-quarters ($97.7B) of the 2016 revenue is in Satellite TV (direct-to-home).  Distribution mostly shows up in transponder agreements, which are about 10% of the market.

Satellite broadband is a tiny (about 1%) part of the market now, but growing.

http://www.sia.org/wp-content/uploads/2017/07/SIA-SSIR-2017.pdf

Satellite broadband, on the other hand, has not even begun to grow toward potential, let alone over-supply.
« Last Edit: 09/16/2017 01:09 AM by AncientU »
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Offline rayleighscatter

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Re: Recession of global satellite industry in 2016
« Reply #24 on: 09/11/2017 02:26 PM »

Yup, there is a pattern -- for GEO sats.
And LEO still hasn't cracked the frequency problem. More than 200 global, regional, national, and industry bodies regulating the frequency spectrum. Not an issue if you're a GEO satellite focusing on a particular region, small market, or a single frequency. But the LEO constellations will either have to work seamlessly between dozens of completely different frequencies. Or you have to launch a complete constellation for each and ever different frequency market. Not to mention in most major markets they'll have to figure out which special interest is the weakest that bandwidth can be taken from, because the wealthier and influential markets won't let anyone touch their spectrum.

Attached is the US spectrum. Every other country has one of these as well.

Offline savuporo

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Re: Recession of global satellite industry in 2016
« Reply #25 on: 09/11/2017 02:31 PM »
Yup, there is a pattern -- for GEO sats.
The only market with any real money right now.
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Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #26 on: 09/11/2017 04:45 PM »
Yup, there is a pattern -- for GEO sats.
The only market with any real money right now.

So, everyone should build their launch capabilities for that (historic) market?
Investment capital inflows point in a different direction.
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Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #27 on: 09/11/2017 04:55 PM »

Yup, there is a pattern -- for GEO sats.
And LEO still hasn't cracked the frequency problem. More than 200 global, regional, national, and industry bodies regulating the frequency spectrum. Not an issue if you're a GEO satellite focusing on a particular region, small market, or a single frequency. But the LEO constellations will either have to work seamlessly between dozens of completely different frequencies. Or you have to launch a complete constellation for each and ever different frequency market. Not to mention in most major markets they'll have to figure out which special interest is the weakest that bandwidth can be taken from, because the wealthier and influential markets won't let anyone touch their spectrum.

Attached is the US spectrum. Every other country has one of these as well.

These are very real problems, but these rules have been created by people (in a different technical era) and can be changed by people -- unlike the laws of physics.  Doesn't say they will be, quickly, or easily, or at all.

Lots of this discussion is reminiscent of the discussion about reusable rockets and breaking the cost curve established by the launch industry accepted/standard expendables.  So many traditionalists and status quo experts said it couldn't (or shouldn't) be done .... insurmountable technical hurdles, no market demand, yadda, yadda...

Well, we'll see.  Again.
« Last Edit: 09/11/2017 05:33 PM by AncientU »
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Offline savuporo

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Re: Recession of global satellite industry in 2016
« Reply #28 on: 09/11/2017 06:36 PM »
Yup, there is a pattern -- for GEO sats.
The only market with any real money right now.

So, everyone should build their launch capabilities for that (historic) market?
Investment capital inflows point in a different direction.

What do launchers have anything to do with this thread ? We are talking about recession in global sat industry, and GEO birds represent the bulk of industry right now. It's what sustains most of the space industrial base, besides direct government spending.

The other small growth trends are mostly in microsatellite category, but revenue-wise it's currently minuscule. And if we are talking about serving launch markets, investment dollars seem to be backing smallsat launch vehicles that are designed specifically serve microsats, and smallsat companies.
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Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #29 on: 09/11/2017 08:16 PM »
Yup, there is a pattern -- for GEO sats.
The only market with any real money right now.

So, everyone should build their launch capabilities for that (historic) market?
Investment capital inflows point in a different direction.

What do launchers have anything to do with this thread ? We are talking about recession in global sat industry, and GEO birds represent the bulk of industry right now. It's what sustains most of the space industrial base, besides direct government spending.

The other small growth trends are mostly in microsatellite category, but revenue-wise it's currently minuscule. And if we are talking about serving launch markets, investment dollars seem to be backing smallsat launch vehicles that are designed specifically serve microsats, and smallsat companies.

Sorry, the launch capability comment was off topic. 

Point I was making is that there is unprecedented capital flowing into the space-related ventures, the largest of which is NGSO satellite networks.  By focusing on the historical (aka, GEO) market being in recession -- potentially never to recover to a growth industry -- and not mentioning what is replacing it misses a huge trend.  Microsats and smallsat companies, outside of this NGSO movement, are unlikely to ever be a significant factor, IMO.
« Last Edit: 09/11/2017 08:19 PM by AncientU »
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Offline savuporo

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Re: Recession of global satellite industry in 2016
« Reply #30 on: 09/11/2017 08:33 PM »
..the largest of which is NGSO satellite networks. ... Microsats and smallsat companies, outside of this NGSO movement, are unlikely to ever be a significant factor, IMO.
Can you provide a reference to the NGSO claim?
 Because multiple microsat companies are on orbit now and growing their services. Their manufacturing and launch numbers are making ( a tiny ) dent in the industry total today, and more are getting funded, with fairly diverse applications besides earth observation.
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Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #31 on: 09/12/2017 01:27 PM »
..the largest of which is NGSO satellite networks. ... Microsats and smallsat companies, outside of this NGSO movement, are unlikely to ever be a significant factor, IMO.
Can you provide a reference to the NGSO claim?
 Because multiple microsat companies are on orbit now and growing their services. Their manufacturing and launch numbers are making ( a tiny ) dent in the industry total today, and more are getting funded, with fairly diverse applications besides earth observation.

Just Google NGSO satellite constellation:

First hit:
Quote
FCC gets five new applications for non-geostationary satellite constellations

Quote
The FCC had given companies until March 1 to disclose whether they also had plans to use the same V-band that Boeing had applied for in November of last year.

The five companies — SpaceX, OneWeb, Telesat, O3b Networks and Theia Holdings — all told the FCC they have plans to field constellations of V-band satellites in non-geosynchronous orbits to provide communications services in the United States and elsewhere. So far the V-band spectrum of interest, which sits directly above Ka-band from about 37 GHz to the low 50 GHz range, has not been heavily employed for commercial communications services.
...
The wave of new applications follows those that 11 companies, including Boeing, filed in November when the FCC set a deadline for any operators to come forward if they had plans to operate in the same bands that OneWeb proposed for its constellation of low-Earth-orbiting internet satellites. All of the companies that met the FCC’s March 1 deadline for V-band plans had participated in the November processing round as well.

Most companies are describing their potential use of V-band satellites as follow-ons to pre-existing plans for constellations in Ku- or Ka-band. SpaceX, for example, proposes a “VLEO,” or V-band low-Earth orbit (LEO) constellation of 7,518 satellites to follow the operator’s initially proposed 4,425 satellites that would function in Ka- and Ku-band. Canada-based Telesat describes its V-band LEO constellation as one that “will follow closely the design of the Ka-band LEO Constellation,” also using 117 satellites (not counting spares) as a second-generation overlay.

Tonnes more -- several threads on NSF covering developments.  Of order 20,000 satellites total are included in these applications (unlikely all will be viable); GEO has 520 sats.  One Web starts deploying next year (21 Soyuz launches, plus 2NG, many small launchers), SpaceX starts launching initial LEO constellation (4,425 sats) in 2019.

New thread coverage of related conference:
http://forum.nasaspaceflight.com/index.php?topic=43718.0#new

Program: 21st Summit for Satellite Financing
Some talks today:
Quote
Venture capital - Fueling both satellite systems and applications
Quote
Key stakes for defense
Quote
New launch solutions for a diversifying market
Quote
Next generation satellite infrastructure and services
Panel Discussion:
Quote
Established players moving to the rhythm of a changing launch market

http://www.satellite-financing.com/en/program?tab=2

Another new thread:
Just posted but not sure if this is new news?!

Quote
New Glenn rocket from @blueorigin will have 7-meter fairing from the start; aiming at constellations.

https://twitter.com/pbdes/status/907527035706396672

Edit to add confirmation:

Quote
Clay Mowry of Blue Origin announces New Glenn will debut with 7-meter fairing on first launch. 2x volume of any 5-meter fairing flying today

https://twitter.com/stephenclark1/status/907528509999984641
emphasis mine

Basically, this transition is all over the news.
« Last Edit: 09/12/2017 01:50 PM by AncientU »
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Offline savuporo

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Re: Recession of global satellite industry in 2016
« Reply #32 on: 09/12/2017 03:00 PM »

Basically, this transition is all over the news.


I read the news, the question is whether the investment dollars are really backing constellations more than things like EO services, and whether any of this hype will actually eventually make any real dents in industry revenue streams.
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Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #33 on: 09/12/2017 07:18 PM »

Basically, this transition is all over the news.


I read the news, the question is whether the investment dollars are really backing constellations more than things like EO services, and whether any of this hype will actually eventually make any real dents in industry revenue streams.

Could be all/most all hype, a rerun of the 1990's gold rush that didn't pan out, or real...

Of the venture capital dollars in 2016, $1.5B went to OneWeb and SpaceX, just as each was outlining their constellation plans.  OneWeb funding for sure is backing constellations; Google and Fidelity monies have been associated with the constellation from the beginning, but much else happening in SpaceX is (like reusable rocketry) related, so fungibility of these funds may be employed.

IMO, this is another of those areas where you have to be leading the charge or in first wave following if you want a piece of the market... much more of a Silicon Valley paced market swing than a traditional defense/big aerospace evolutionary (over decades) market.  By the time you know it is real, the cost to join will be prohibitive.

Gwynne Shotwell said today that she thinks there will be about three viable players in the global constellation market -- SpaceX being one.
« Last Edit: 09/12/2017 07:20 PM by AncientU »
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Offline Lar

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Re: Recession of global satellite industry in 2016
« Reply #34 on: 09/12/2017 10:01 PM »

Yup, there is a pattern -- for GEO sats.
And LEO still hasn't cracked the frequency problem. More than 200 global, regional, national, and industry bodies regulating the frequency spectrum. Not an issue if you're a GEO satellite focusing on a particular region, small market, or a single frequency. But the LEO constellations will either have to work seamlessly between dozens of completely different frequencies. Or you have to launch a complete constellation for each and ever different frequency market. Not to mention in most major markets they'll have to figure out which special interest is the weakest that bandwidth can be taken from, because the wealthier and influential markets won't let anyone touch their spectrum.

Attached is the US spectrum. Every other country has one of these as well.


Is it feasible to build birds that change frequencies depending on where they are to get around this?
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Offline Kansan52

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Re: Recession of global satellite industry in 2016
« Reply #35 on: 09/12/2017 10:11 PM »
There will be people here that can give a more technical answer but 'No' in general.

The frequencies set your design for antenna, TWTs, and all the support for the frequencies.

Adaptable means more complex. More cost.

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Re: Recession of global satellite industry in 2016
« Reply #36 on: 09/12/2017 10:19 PM »
There will be people here that can give a more technical answer but 'No' in general.

The frequencies set your design for antenna, TWTs, and all the support for the frequencies.

Adaptable means more complex. More cost.

And many of the newer sats are planning to do this.

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Re: Recession of global satellite industry in 2016
« Reply #37 on: 09/13/2017 08:36 AM »
Different perspectives I assume from World Satellite Business Week conference:

Quote
Frank Culbertson @OrbitalATK: Commercial sat order slump puts pressure on smaller component suppliers; hard for them to maintain production.
https://twitter.com/pbdes/status/907876842518007808

Quote
Sat builders @Thales_Alenia_S @sslmda @AirbusDefence @BoeingDefense @LockheedMartin @OrbitalATK agree: Dont use GEO comsats as industry KPI.
https://twitter.com/pbdes/status/907877847968219136

Edit to add:

Quote
Sat builders @Thales_Alenia_S @sslmda @AirbusDefence @BoeingDefense @LockheedMartin @OrbitalATK say ~3 megaconstellations will be built.
https://twitter.com/pbdes/status/907883544562819077
« Last Edit: 09/13/2017 08:39 AM by FutureSpaceTourist »

Offline savuporo

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Re: Recession of global satellite industry in 2016
« Reply #38 on: 09/13/2017 03:47 PM »
Of the venture capital dollars in 2016, $1.5B went to OneWeb and SpaceX, just as each was outlining their constellation plans. ..

Yes, two huge deals. At the same time, there have been dozens and dozens of million to few ten million dollar funding rounds closed for EO and other smallsats, complemented by dedicated launchers for these ( RocketLab, Vector ). Will be interesting to see a report on how this stacks up in terms of total dollars over last couple years.
As EO smallsats are already proven businesses by multiple companies, it's probably fair to say these investments are probably lower risk, lower return compared to NGSO constellations.
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Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #39 on: 09/13/2017 05:28 PM »
...

Quote
Sat builders @Thales_Alenia_S @sslmda @AirbusDefence @BoeingDefense @LockheedMartin @OrbitalATK say ~3 megaconstellations will be built.
https://twitter.com/pbdes/status/907883544562819077

Interesting to note that there are five sat builders on this list (six if nacent-SpaceX is included) plus several un-named sat builders... and three mega-constellations.  If SpaceX is one of the players/builders, and Airbus is building OneWeb's sats, that leaves one constellations for the remaining competitors. 

Should be bloody, competition-wise.  May the best technology win.

Note: Is a discussion about building thousands of sats per year OT in a "Recession in global satellite industry' thread?
« Last Edit: 09/13/2017 05:34 PM by AncientU »
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Re: Recession of global satellite industry in 2016
« Reply #40 on: 09/13/2017 06:03 PM »
Note: Is a discussion about building thousands of sats per year OT in a "Recession in global satellite industry' thread?

A giant detailed discussion probably belongs elsewhere but as a refutation to the thesis that there is a recession on, it's on topic in my view, and easily.
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Offline savuporo

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Re: Recession of global satellite industry in 2016
« Reply #41 on: 09/13/2017 06:11 PM »
Note: Is a discussion about building thousands of sats per year OT in a "Recession in global satellite industry' thread?

A giant detailed discussion probably belongs elsewhere but as a refutation to the thesis that there is a recession on, it's on topic in my view, and easily.

The number of orders are down, people are being laid off, and revenues reported by the industry last year were a tiny notch above inflation rate, significantly below historical growth.
So until these supposed newly manufactured constellations start making a dent in the overall reported revenues, it's tough to call it as anything but a recession, or a plateau at least.
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Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #42 on: 09/13/2017 06:30 PM »
Note: Is a discussion about building thousands of sats per year OT in a "Recession in global satellite industry' thread?

A giant detailed discussion probably belongs elsewhere but as a refutation to the thesis that there is a recession on, it's on topic in my view, and easily.

The number of orders are down, people are being laid off, and revenues reported by the industry last year were a tiny notch above inflation rate, significantly below historical growth.
So until these supposed newly manufactured constellations start making a dent in the overall reported revenues, it's tough to call it as anything but a recession, or a plateau at least.

Could be that traditional GEO market investment is holding back to see where the new value resides.  What looks like a recession could be a restructuring... think about what is happening in automobiles with the surge in electric vehicle investment, model lines, nations declaring end to ICE sales, etc. -- traditional sales are slowing, while new electric line sales are rising exponentially, but we haven't seen the cross-over yet.
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Offline meberbs

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Re: Recession of global satellite industry in 2016
« Reply #43 on: 09/13/2017 06:31 PM »
Note: Is a discussion about building thousands of sats per year OT in a "Recession in global satellite industry' thread?

A giant detailed discussion probably belongs elsewhere but as a refutation to the thesis that there is a recession on, it's on topic in my view, and easily.

The number of orders are down, people are being laid off, and revenues reported by the industry last year were a tiny notch above inflation rate, significantly below historical growth.
So until these supposed newly manufactured constellations start making a dent in the overall reported revenues, it's tough to call it as anything but a recession, or a plateau at least.
When one company has layoffs, and another is building a new factory, this you can't look at just the one company and make conclusions about the whole industry. There are different metrics to track, but if you want to discuss job numbers, you have to mention the hiring being done in addition to the layoffs. Revenue growth being above inflation does not make sense to call recession. Plateau makes some sense in this case, but the context should be considered, and if you count the construction for the new constellations, I am not sure how you could conclude that "orders are down." See above statement from satellite manufacturers on using GEO comsat orders as a KPI.


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Re: Recession of global satellite industry in 2016
« Reply #44 on: 09/13/2017 06:34 PM »
It's a recession in numbers of GEO satellites ordered, but there are interesting trends.  Condosats (two payloads for different operators on the same satellite) are becoming fairly common as an alternative to the two operators launching separate satellites.  SES said recently that the newly ordered O3b satellites could allow them to not replace two GEO sats.  Maybe all of the satellite manufacturers need to shift their product mixes to stay healthy.  Airbus is participating in Oneweb.  Thales is well established in non-GEO satellites with Iridium NEXT, the current O3b constellation, the proposed LeoSat constellation, etc.  Boeing designed a new variant of the 702 bus to get the new O3b order.  There are lots of things in between cubesats and big GEO satellites.

Offline savuporo

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Re: Recession of global satellite industry in 2016
« Reply #45 on: 09/15/2017 10:59 PM »
Okay folks, fess up, which one of you is Brian Berger of SN ?

http://spacenews.com/are-geo-satellite-orders-still-a-good-measure-of-industry-health/
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Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #46 on: 09/16/2017 01:06 AM »
Okay folks, fess up, which one of you is Brian Berger of SN ?

http://spacenews.com/are-geo-satellite-orders-still-a-good-measure-of-industry-health/

Funny that. 

If the article is to believed -- we saw it on the internet, so it must be true -- the industry is in transition in two ways:
1. Movement toward broadband/LEO/NGSO constellations (which we've thrashed fairly thoroughly), and
2. Movement toward smaller numbers of Battlestar Galactica GEO sats (which we've missed*).

The latter makes lots of sense with the limited number of GEO slots available.  Maybe Condo-sats will become Condo-complex-sats and basic infrastructure will grow at each GEO node to accommodate incremental additions of capability without increasing individual satellite numbers.

* Just noticed gongora's comment a couple upstream... so we didn't miss #2 either, just late to the game. 
IOW: NSF is great!
« Last Edit: 09/16/2017 01:21 AM by AncientU »
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Offline Katana

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Re: Recession of global satellite industry in 2016
« Reply #47 on: 09/16/2017 04:41 AM »
Note: Is a discussion about building thousands of sats per year OT in a "Recession in global satellite industry' thread?

A giant detailed discussion probably belongs elsewhere but as a refutation to the thesis that there is a recession on, it's on topic in my view, and easily.

The number of orders are down, people are being laid off, and revenues reported by the industry last year were a tiny notch above inflation rate, significantly below historical growth.
So until these supposed newly manufactured constellations start making a dent in the overall reported revenues, it's tough to call it as anything but a recession, or a plateau at least.
When one company has layoffs, and another is building a new factory, this you can't look at just the one company and make conclusions about the whole industry. There are different metrics to track, but if you want to discuss job numbers, you have to mention the hiring being done in addition to the layoffs. Revenue growth being above inflation does not make sense to call recession. Plateau makes some sense in this case, but the context should be considered, and if you count the construction for the new constellations, I am not sure how you could conclude that "orders are down." See above statement from satellite manufacturers on using GEO comsat orders as a KPI.

Growth rate of satellite manufacturing industry is -13%, below zero.
Growth rate of satellite service industry is 0.2%, below inflation.
Growth rate of the whole satellite industry is 2%, but mostly are contributed from ground equipments.
« Last Edit: 09/18/2017 08:08 AM by Katana »

Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #48 on: 09/16/2017 11:40 AM »
...
Growth rate of satellite manufacturing industry is -13%, below zero.
Growth rate of satellite service industry is -0.2%, below inflation.
Growth rate of the whole satellite industry is 2%, but mostly are contributed from ground equipments.

This -13% figure is the premise of entire thread.  Satellite manufacturing revenues* were impacted by the availability of launchers due to Proton's year off and SpaceX losing AMOS plus four months of launches.  Communications sats accounted for 22% of revenue vs 42% the previous year -- a big drop that more than accounts for the -13% overall.  This could easily be the result of losing a handful of big sat launches.

*Per the report (page17):
Quote
Satellite manufacturing revenues are recorded in the year of satellite launch.

I believe that this thread has well-covered the transition being experienced by the satellite manufacturing (plus other segments) industry.  It is probably as healthy now as it ever has been, maybe better, but going to look quite different a few years down the road.
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Offline AncientU

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Re: Recession of global satellite industry in 2016
« Reply #49 on: 09/17/2017 01:56 PM »
One final reference and quote:
Quote
Constellations of Internet Satellites Will Beam Broadband Everywhere
...
"I've been in this industry well over 30 years, and there's been more activity in the last five or so years, than probably in the previous 20," Sanders says. "It's incredible."
-- Stewart Sanders, executive vice president of technology for SES Networks

http://computer.howstuffworks.com/constellations-internet-satellites-will-beam-broadband-everywhere.htm
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Offline Katana

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Re: Recession of global satellite industry in 2016
« Reply #50 on: 09/18/2017 08:21 AM »
...
Growth rate of satellite manufacturing industry is -13%, below zero.
Growth rate of satellite service industry is 0.2%, below inflation.
Growth rate of the whole satellite industry is 2%, but mostly are contributed from ground equipments.

This -13% figure is the premise of entire thread.  Satellite manufacturing revenues* were impacted by the availability of launchers due to Proton's year off and SpaceX losing AMOS plus four months of launches.  Communications sats accounted for 22% of revenue vs 42% the previous year -- a big drop that more than accounts for the -13% overall.  This could easily be the result of losing a handful of big sat launches.

*Per the report (page17):
Quote
Satellite manufacturing revenues are recorded in the year of satellite launch.

I believe that this thread has well-covered the transition being experienced by the satellite manufacturing (plus other segments) industry.  It is probably as healthy now as it ever has been, maybe better, but going to look quite different a few years down the road.

0.2% growth of service revenue makes more sense: service revenue comes from averaged behavior of end customers, instead of being affected by random incidents or choices. Also notice 0.2% is significantly lower than 7% growth of ground equipment revenue, mostly from GPS modules of mobile phones.

This implies far less growth compared to consumer electronics industry (which is the "home" of venture capitals).
« Last Edit: 09/18/2017 08:22 AM by Katana »

Online oldAtlas_Eguy

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Re: Recession of global satellite industry in 2016
« Reply #51 on: 09/18/2017 03:27 PM »
Revenues from comm sat service providers slow growth is due to the fact that the sats recently deployed have a very large increase per sat in data throughput (HTS). This has caused data prices to decrease. Which if the industry's revenue is still increasing (even just .2%) with prices decreasing means the demand for data has increased a lot. It is this last item that tells the tale about the health of the industry. What is the demand? Is it increasing or decreasing. The answer is that it is increasing rapidly, but that the demand is also for much lower prices on the $/bit. The industry is showing a high elasticity for demand vs the prices for the data. Competition in the form of the prices of $/bit provided by NGSO and LEO constellations as well as the GEO-HTS is transforming the comm sat manufacturers customer base demands. They want the manufacturers to deliver sats that provide capabilities that will have lower $/bit. Either lower the unit costs or increase the unit's bandwidth for same cost.

Offline Katana

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Re: Recession of global satellite industry in 2016
« Reply #52 on: 09/20/2017 02:31 AM »
Revenues from comm sat service providers slow growth is due to the fact that the sats recently deployed have a very large increase per sat in data throughput (HTS). This has caused data prices to decrease. Which if the industry's revenue is still increasing (even just .2%) with prices decreasing means the demand for data has increased a lot. It is this last item that tells the tale about the health of the industry. What is the demand? Is it increasing or decreasing. The answer is that it is increasing rapidly, but that the demand is also for much lower prices on the $/bit. The industry is showing a high elasticity for demand vs the prices for the data. Competition in the form of the prices of $/bit provided by NGSO and LEO constellations as well as the GEO-HTS is transforming the comm sat manufacturers customer base demands. They want the manufacturers to deliver sats that provide capabilities that will have lower $/bit. Either lower the unit costs or increase the unit's bandwidth for same cost.
The reverse Moore law of price (for data or electronics hardware).

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