Recession of global satellite industry in 2016

[FutureSpaceTourist]

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.

[dkovacic]

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.

[Sam Ho]

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

[AncientU]

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/

SSL President John Celli said an “extended slowdown” in orders for geostationary orbit communications satellites

http://spacenews.com/mda-slashes-geo-order-expectations/

Commercial satellite operators will probably order half as many geosynchronous satellites this year than usual, deepening a drought that has affected satellite manufacturers

http://spacenews.com/orbital-atk-increases-government-satellite-work-to-make-up-for-commercial-shortfall/

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.

[rayleighscatter]

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.

[savuporo]

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

The only market with any real money right now.

[AncientU]

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.

[AncientU]

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.

[savuporo]

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.

[AncientU]

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.

[savuporo]

..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.

[AncientU]

..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:

FCC gets five new applications for non-geostationary satellite constellations

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:

Venture capital - Fueling both satellite systems and applications

Key stakes for defense

New launch solutions for a diversifying market

Next generation satellite infrastructure and services

Panel Discussion:

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?!

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:

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.

[savuporo]

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.

[AncientU]

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.

[Lar]

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?

[Kansan52]

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.

[gongora]

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.

[FutureSpaceTourist]

Different perspectives I assume from World Satellite Business Week conference:

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

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:

Sat builders @Thales_Alenia_S @sslmda @AirbusDefence @BoeingDefense @LockheedMartin @OrbitalATK say ~3 megaconstellations will be built.

https://twitter.com/pbdes/status/907883544562819077

[savuporo]

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.

[AncientU]

...

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?