The new technology showcased at the Satellite Conference and Exhibition held earlier this month in Washington, DC, presented fascinating options, but the event also reflected the industry’s conditions well, offering little consensus on the industry’s path forward out of its limitations.
Fleet operators’ outlook. Broadband and network management will, of course, continue to be a large part of fleet operators’ business, with the increasing fragmentation of the broadcast/direct-to-home (DTH) sector. But spectrum access and rights will also be critical to the survival of the industry (which may arise as a potential flash point between space and terrestrial stakeholders at the World Radiocommunication Conference in Egypt later this year). Beyond these two points of consensus, however, the fleet operators at the show diverged widely in their stated approach toward serving their respective target markets. Their ranking of priorities—rural backhaul, government, maritime, aero, DTH, consumer broadband—seemed ad hoc, as were their positions on the economics of bandwidth delivery between GEO, MEO, and LEO. Operators appear to be lingering on the periphery of the overall telecom ecosystem, serving as access of last resort, or narrowly targeting to rural, aero, or maritime markets. It’s unclear how these solutions will play with customers or offer long-term staying power.
Heavy launch market limitations. Also an area where challenges aren’t in dispute but solutions to them are, participants agreed that the existing heavy launch manifests in the near-term can’t sustain the number of current providers in the industry. Yet, given the geopolitical and strategic nature of the sector, the usual remedies of consolidation or joint ventures are unavailable. SpaceX, with its desire to fly more than 20 paid flights a year is flying its own Starlink LEO constellation to keep the flow going. Meanwhile, ULA, which is competing against SpaceX, Blue Origin, and Northrop Grumman for the Air Force’s next-generation national security launch contracts, appears confident of its chances, which would leave the other two to jostle for the remaining spot. It’s difficult to envision positive outcomes of this current scenario.
Interesting innovation, but to what end? The new space sector technology on offer at Satellite 2019 was both plentiful and intriguing. On-orbit servicing, software-defined spacecraft, flat phased array terminals, and other cool hardware on display represent extraordinary opportunities, but also challenges, including those of cybersecurity. Yet as exciting as these technologies are, it’s hard to see how all of these disparate pieces tie together in terms of the industry’s overall progress past its current core conundrum. How do these technologies help solve the problems of overcapacity and price pressure in the face of a rapidly changing marketplace? As was stated in a GEO service provider panel, everything comes down to the customer experience in the end. As yet, the new technology coming online currently falls short of addressing it.
Despite the encouraging new developments showcased at Satellite 2019, we look to see innovation—both in terms of new capabilities, and new business models—that helps lay the groundwork for a healthier future for the sector. For example, in terms of business models, we think integrating space communications into the terrestrial sector could offer a viable option. You can read more about that here: A Path to Future Growth and Profitability.
