NSR Webinar- Satellite Manufacturing and Launching- The ... · Satellite Manufacturing and Launching: The Dawn of a New Era February 2014 2 NSR Webinar- Satellite Manufacturing and

www.nsr.com © 2014 – NSR

February 12, 2014

Satellite Manufacturing and Launching: The Dawn of a New Era

NSR Webinar

Christopher Baugh, President

Stephane Gounari, Senior Analyst


February 2014Satellite Manufacturing and Launching: The Dawn of a New Era

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NSR Webinar- Satellite Manufacturing and Launching: The Dawn of a New Era

Webinar Agenda

One of the contact card designs from the previous

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One of the contact card designs from the previous

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IntroAbout NSR & “Satellite Manufacturing & Launch Services” Report

1 Trends in Satellite Manufacturing Supply

2 Trends in Launch Services Supply

3Trends in Satellite Manufacturing & Launch Services Demand

4 Quantitative Findings

5 Bottom Line

Christopher Baugh

[email protected]

President

NSR London

Stéphane Gounari

[email protected]

Senior Analyst

NSR Dublin


About NSR

NSR is a Global Leader in Satellite Market Research and Consulting

Founded in 2000, NSR specializes in analysis of growth

opportunities across the satellite industry

NSR’s expert consultants are located globally and possess over 140 years of combined

industry experience.

Multi-Client Reports on Various Satellite Topics

Extensive Client Research, Consulting and Advisory Services

“Holistic” approach to research enables NSR to anticipate trends with a higher degree of confidence and precision than the competition and stay ahead of the curve.

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February 2014

www.nsr.com



www.nsr.com © 2014 - NSR


Types of clients NSR serves include:

� Satellite Operators

� Satellite Manufacturers & Component Suppliers

� Launch Services Providers

� Systems Integrators

� Service Providers

� Legal Industry

� Financial Community

� VSAT Vendors

� Antenna and Subsystems Manufacturers

� End Users

� Governments and Public Institutions

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NSR’s Clientele

NSR clients range from start-ups to market leaders in various sectors of the satellite and telecommunications industry.

Consulting projects have been completed in every region and in over 75 countries worldwide.

The common theme across our clientele is the requirement for unbiased, actionable analysis that provides each client with the intelligence it cannot find elsewhere.



www.nsr.com © 2014 - NSR


NSR Complete Coverage of the Satellite Market

February 2014

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FSS

MSS

Government& Military Satcom

Financial Due Diligence-

ALL SECTORS

DTH and Video

Wireless Backhaul

Sat. Manufacturing & Launching

Earth Observation

M2M and SCADA

VSAT and Broadband

Energy Markets




NSR reports deliver clarity - Critical market insight giving Market Leaders the edge over the competition..

� A Complete PowerPoint report document containing all quantitative and qualitative analysis

� An Excel file containing all data and graphs so the client can easily use this work as a basis for their own internal market projections

� Four (4) hours of consulting time with the NSR analyst who authored the report to review report findings and interpret market forecasts

About NSR & Satellite Manufacturing & Launch Services Coverage

NSR’s Satellite Manufacturing & Launch Services, 4th Edition


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VerticalsSatellite Manufacturing

ForecastsLaunch Services Forecasts

Hosted Payloads Forecasts

1. Commercial GEO Communications2. Government & Military GEO Communications3. Non-GEO Communications4. GEO Earth Observation (EO)5. Government & Military Non-GEO EO6. Commercial Non-GEO EO7. Navigation8. Science & Technology Development9. SIGINT & Early Warning

1. Satellite Orders (by region)

2. Mass Distribution of Unit Orders (by mass category)

3. Total Mass of Unit Orders (by region)

4. Market Size (Total, Open, Captive – by region)

1. Satellite Launches (by region)

2. Mass Distribution of Units Launches (by mass category)

3. Total Mass of Unit Launches (by region)


1. Unit Orders

2. Payload Masses

3. Manufacturing Revenues

4. “Hosting” Revenues

1. GEO Launch Services2. Non-GEO Launch Services

N/A Same as above N/A

1. Commercial GEO Communications (specific forecasts)

1. Payload Power Distribution of Units Orders (by power category)

2. Propulsion Type of Units Orders (by propulsion type)

3. Beam Type of Units Orders (by beam type)

1. Type of Customer (Government & Military, Commercial)

2. Orbit (GEO, Non-GEO)3. Application (Communications, Earth

Observation, Others)4. Regions (NAM, WEU, CEEU, Asia, RoW)

1. Satellite Orders (by region)

2. Mass Distribution of Unit Orders (by mass category)

3. Total Mass of Unit Orders (by region)


1. Satellite Launches (by region)

2. Mass Distribution of Units Launches (by mass category)

3. Total Mass of Unit Launches (by region)


1. Unit Orders

2. Payload Masses

3. Manufacturing Revenues

4. “Hosting” Revenues

NSR’s Satellite Manufacturing & Launch Services, 4th Edition Report Breakdown

New in this Edition� Hosted Payloads Forecasts

– Unit Orders– Payload Masses– Manufacturing Revenues– “Hosting” Revenue

20+ Company Profiles� Detailed presentation and recent

activity� Revenues� Market Share (Commercial

Segments)� Portfolio Description; current and

future platforms (GEO & Non-GEO) and Launch Vehicles


Global Market: 2013 & Beyond




Satellite Orders: Commercial Up, Government & Military Down


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Estimated value of

$16.7 billion

Satellite Orders 2012 2013

Commercial GEO Communications 19 23

Government & Military GEO Communications

6 4

Non-GEO Communications 9 1

GEO Earth Observation 5 3

Government & Military Non-GEO EarthObservation

21 21

Commercial Non-GEO Earth Observation 6 5

Navigation 22 13

Science & Technology Development 11 11

SIGINT 4 4

Total 103 85

� Stable or lower amount of orders in most non-commercial segments

– Due to program needs and budget cuts

� Commercial GEO Communications experienced considerable growth



Satellite Orders: GEO vs Non-GEO


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Satellite Orders� GEO

– ≈30 satellites ordered every year over the next decade

– Commercial GEO Communications accounts for most of the demand

� Non-GEO

– Non-GEO Communications and Navigation verticals extremely cyclical

– ≈70 satellites ordered every year over the next decade

– Most satellites ordered for Earth Observation, Science & Technology and Navigation



Satellite Manufacturing Market Size: Unit Mass vs. Specific Cost


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GEO Manufacturing Market� ≈$7.3 billion per year on average

GEOHigh Unit Mass

+ Low Specific

Cost

Non-GEOLow Unit Mass

+ Very High

Specific Cost

Non-GEO Manufacturing Market� ≈$9.1 billion per year on average



Satellite Manufacturing Market: GEO Open, Non-GEO Captive


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Satellite Manufacturing Markets - Open vs. Closed to Competition

� GEO Segment

– Market openness ≈ 50% (10 year average)– Driven by commercial GEO Communications segment.

� Non-GEO Segment

– Market openness <15% (10 year average)– Earth Observation satellite manufacturing market most open

Global Market

Openness

28%



Satellite Launches: Quiet in GEO, Busy in Non-GEO


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Satellite Launches 2012 2013

Commercial GEO Communications 26 17

Government & Military GEO Communications

8 7

Non-GEO Communications 6 19

GEO Earth Observation 3 2

Government & Military Non-GEO EarthObservation

15 21

Commercial Non-GEO Earth Observation 3 2

Navigation 9 6

Science & Technology Development 11 23

SIGINT 6 3

Total 87 100

Estimated value of $6.8

billion

� Higher number of satellites launched overall; segments show considerable variation

– GEO satellite launches down to 27 from 40 in 2012

– Non-GEO satellite launches up to 73 from 47 in 2012



Satellite Launches: GEO vs. Non-GEO


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Satellite Launches� GEO

– ≈32 satellites every year over the next decade

– Commercial GEO Communications accounts for most of the demand

� Non-GEO

– Peak in 2016 due to Non-GEO Communications and Navigation verticals

– ≈79 satellites every year over the next decade

– Most satellites launched for Earth Observation, Science & Technology and Navigation



Launch Services Market Size: Launch Costs Declining


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GEO Launch Services� ≈$3.2 billion per year on average

GEOMore Players

+Better Rockets

+Stable Demand

Non-GEOMore Players

+Better Rockets

+Evolving Demand

Non-GEO Launch Services� ≈$3.3 billion per year on average



Launch Services Market Openness: Barely Evolving


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Launch Services Markets – Open vs. Closed� GEO Segment

– Market openness >55% (10-year average)– Due to commercial GEO Communications segment

� Non-GEO Segment

– Market openness <7% (10-year average)

– Low rate as most of the demand is captive, made worse as captive launch costs are higher

Global Market

Openness

31%


Focus - Commercial GEO CommunicationsSatellite Manufacturing and Launching: The Dawn of a New Era


Focus - Commercial GEO Communications

23 Commercial GEO Communications Satellites were Ordered in 2013


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Commercial GEO Communications Satellites Ordered in 2013

Airbus Defence & Space (4)

Badr 7 (Arabsat 6B)Sky Brazil

Express AMU1/Eutelsat 36CTelstar 12R (Vantage)

Boeing Satellites & Space (6)

Inmarsat 5F4Intelsat 33e + Intelsat EPIC(x3)

ViaSat -2

China Great Wall Industry Corporation

(2)

Apstar 9Nicasat-1

ISS Reshetnev (1) AOneSat-1

Orbital Sciences Corporation (3)

DirecTV (x2)Thaicom 8

Space Systems/Loral (6)

Asiasat 9EchoStar XIX (Jupiter-2)

Eutelsat 65 West AIntelsat 34JCSat 14

Star One D1

Thales Alenia Space (1) SGDC 1

2011 2012 2013

# Commercial GEO Communications Satellites

Ordered 18 19 23

Trends� 21% growth between 2012 and 2013 in

terms of unit, but….

– Several projects expected to be procured in 2012 were delayed

� 2013’s good performance was due to a correction effect


2013: The Supplier Side� Two manufacturers were awarded 6

satellites each

– A very good year for Boeing

� 2013’s demand was fully captured by the 7 manufacturers with the highest market share since 2009


Commercial GEO Communications: Increasing Number of Players


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2013 # Manufacturers # Satellites

6 satellites ordered 2 12

3-4 satellites ordered 2 7

1-2 satellites ordered 3 4

Total 7 23

Satellite Orders – Manufacturers’ Concentration


2013 - The Customer Side� 17 satellite operators ordered 24 satellites

– “Concentrated” demand

� A high number of satellites procured to a satellite manufacturer located in a different region than the satellite operator

– 2013 was a very competitive year!


Commercial GEO Communications: A Competitive Year


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2013 # SatOps # Satellites



1 satellite ordered 15 15

Total 17 23

Region 2013 2009-12

NAM 18% 6%

WEU 100% 52%

CEEU 100% 31%

Asia 75% 76%

LAM 100% 88%

MEA 100% 88%

Global 57% 52%

Satellite Orders – Clients’ Concentration

Satellite Orders – Procurement Outside of the Satellite Operator’s Region



Commercial GEO Communications: Mass Shift


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# Commercial GEO Communications Satellites

Ordered2011 2012 2013

Below 3,300 kg 3 6 43,300 - 5,000 kg 7 1 25,000 - 6,200 kg 7 10 13Over 6,200 kg 1 2 4

Total 18 19 23

Trends� Shift in mass happening: Extreme mass categories are growing

– <3,300 kg: “Up” trend is pretty recent; follows a long “Down” trend

– 3,300 to 5,000 kg: Continuation of past trend

– 5,000 to 6,200 kg: Stabilization

– 6,200kg+: Recent category, steadily growing


Latest Contracts� March 2012: Boeing signed a 4-satellite contract (2 firm and 2 options confirmed in 2013)

with ABS and SatMex. The 4 satellites are to be launched (two at a time) on a Falcon-9

� ……..

� Lots of talks, lots of plans, not many contracts…


Commercial GEO Communications: Electric Propulsion Not So Successful?


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NSR’s Take on EP Issues� Reliability concerns on EP Engines: To

soften in the next years

� Reliability concerns due to radiation belts: Known issue with mitigating techniques

� Lack of Reactiveness: Not going away

� Long Orbit Raising Time: Not going away

– Added Costs

– Opportunity Cost



Commercial GEO Communications: Will Falcon Heavy Kill Electric Propulsion?


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NSR’s Take on EP Usage� EP has a better specific impulse, thus requires less fuel and saves mass

� Lower mass can be used to lower costs

– Providing access to Falcon 9 (even lower costs)

� Lower mass can also be used to maximize capabilities

– A 6.2 ton satellite that can do what a much heavier satellite would be capable of (thus bypassing the current 6.2 tons to GTO limit)

But…� Both are dependent on the current Launch

Services supply environment

� Added costs and complexity due to EP are compared:

– Launch Prices

– Launch Capabilities

� Changes in price and capabilities will affect EP value proposition


Focus - Commercial Non-GEO Earth ObservationSatellite Manufacturing and Launching: The Dawn of a New Era


Trends� Small market in term of units

� Satellite manufacturing demand low but constant, fed by a steadily growing demand of imagery from an increasing set of applications and end-users

– Demand from historical end-users (Defense & Intelligence and Civilian Government) growing at a lower rate than in the past

– Demand from commercial verticals is accelerating

– Oil & Gas and Mining industry

– Services industry (Notably Location-based Service Providers)

Focus - Commercial Non-GEO Earth Observation

Commercial Non-GEO Earth Observation: Demand Low but Steady


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2009 2010 2011 2012 2013

# Commercial EO Non-GEO

Satellites Ordered 4 4 5 6 5


Trends� Commoditization trend has a clear

impact on average mass…

� … but it does not disqualify cutting-edge satellites

� Two types of satellites for Commercial EO


Commercial Non-GEO Earth Observation: Smaller Satellites


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Mass Range Launch Years

SPOT 4&5 2.7 – 3 tons 1998-2002

SPOT 6&7 720 kg 2012-2014


Trends� Two types of satellites for Commercial EO

1. Cutting-Edge Satellites: Still relevant – A very high CAPEX but powerful and unique capabilities

2. Commoditized Satellites: Catching up with yesterday’s cutting-edge

� Commoditized satellites are cheaper, but not necessarily the most cost-efficient…

– … but they reduce the barrier to entry for constellations


Commercial Non-GEO Earth Observation: Omniscient or Omnipotent


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MassDesign

LifeResolution

SpectralBands

Annual Imaging Capabilities

Project Cost

WorldView-3 3 tons 8 years 30cm 20+ 250 million km² $650 million

DMC 3G350 kg (each)

7 years 1m 4 365 million km² $170 million


Focus – Commercial GEO Launch ServicesSatellite Manufacturing and Launching: The Dawn of a New Era


Situation in 2013� 2013 was a quiet year; several issues:

– Satellite delivery delays

– Failure-induced delays

Focus – Commercial GEO Launch Services

17 Commercial GEO Communications Satellites were Launched in 2013


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2009 2010 2011 2012 2013

# Commercial GEO Satellites

Launched22 20 23 26 17

Commercial GEO Communications Satellites Launched in 2013

Arianespace (4)

Alphasat I-XLAmazonas 3

Azerspace-1 / Africasat-1aEutelsat 25B/ Es'hail

China Great Wall Industry Corporation (2)

TKSat-1ChinaSat 11

ILS/Khrunichev(8)

Anik G1Astra 2E

Eutelsat 3DExpress AM5Inmarsat 5F1

SatMex 8SES-6

Sirius FM-6

Land Launch (1) Amos 4

Sea Launch (1) Intelsat 27

SpaceX (1) SES 8



Commercial GEO Launch Services: A Moving Picture


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Trends� 2009-2013: Concentrated supply

– Two biggest players represent close to 80% of the market; each around 40%

– Two next biggest players represent close to 20% of the market, each around 10%

� 2014+

– Two biggest players represent 67% of the market; one at 39%, the other at 28%

– Two next biggest players represent 25% of the market, each around 12%

� The situation is rapidly changing in the Commercial GEO Launch Services segment



Commercial GEO Launch Services: Toward More Capable Rockets


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Rocket Name Capacity (kg) Reference GTO

Falcon-Heavy 12,000 185 x 35,786 km; i:28.5°

Ariane 5 ME 11,500Assumed similar to

Ariane 5

Ariane 5 9,600 250 x 35,943 km; i: 6°Angara-A5

w/KVTK7,500

5,500 x 35,786 km; i: 25°

Ariane 6 6,500Assumed similar to

Ariane 5

Proton Breeze-M (Phase IV)

6,3504,120 x 35,786 km; i:

23.2°

Zenit-3SL 6,160 200 x 35,786 km; i: 0°

Falcon-9 v1.1 3,700 185 x 35,786 km; i: 6°


LM-5 14,000Assumed similar to LM-

3B/E

H-IIB (304) 8,000 Assumed similar to H-IIA

Atlas-V (551) 6,860 4,824x35,786 km; i: 24.2

H-IIA (204) 5,800 250x36,156 km; i: 28.5°

LM-3B/E 5,500 200x35,958; i: 28.5°

Source: NSR

Source: NSR

Source: NSR


The Shape of Things to Come?� Within a decade, up to four Launch Vehicles could be introduced by 3 of the 4 current biggest actors

� Within a few years, a Launch Vehicle with bigger GTO capabilities than Ariane-5 will enter the market

– Upper limit on mass (≈6.2t) will be lifted

– Usage of Electric Propulsion to “Push the Envelop” will become irrelevant

– Usage of Electric Propulsion to fit in a Falcon 9 for price reason will become irrelevant

� Pressure on mass due to launch costs should be softened

� How many commercial Launch Services Providers can the GEO segment sustain?


Commercial GEO Launch Services: Toward More Capable Rockets


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Falcon-Heavy 12,000 185 x 35,786 km; i:28.5°

Ariane 5 ME 11,500Assumed similar to

Ariane 5

Ariane 5 9,600 250 x 35,943 km; i: 6°Angara-A5

w/KVTK7,500

5,500 x 35,786 km; i: 25°

Ariane 6 6,500Assumed similar to

Ariane 5

Proton Breeze-M (Phase IV)

6,3504,120 x 35,786 km; i:

23.2°

Zenit-3SL 6,160 200 x 35,786 km; i: 0°

Falcon-9 v1.1 3,700 185 x 35,786 km; i: 6°

Source: NSRSource: NSR


Bottom Line



Satellite Demand� Demand for Satellite Manufacturing and Launch Services

to remain stable

Satellite Manufacturing� Specific Cost : Decrease in every Commercial vertical

� New and/or increasingly efficient Satellite Technologies

– Commercial GEO Communications: Mass and power shift towards extremes (EP, High Power…)

– Commercial EO: Commoditization is a reality, cutting-edge satellites remain relevant

Launch Services� Competitive Landscape: market share moving

– New and bigger rockets (on average) to become available in the next decade

– Launch costs to decrease sensibly all-round

Bottom Line

The Space Industry is Changing


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Satellite Demand Stable

Satellite Supply Improving

Value Proposition Improving


Red Queen Effect or New Era?� In most markets, satellite-based solutions

compete with alternative (terrestrial) solutions, likely also improving their value-proposition

– Satellite’s improvements potentially allowing only to maintain it’s current market share (Red Queen Effect)

– …or will allow satellite to take an advantage in existing markets…

– ….and to propose new applications & new services…

– …requiring additional satellite manufacturing and launch services ?!?!

Bottom Line

Improving Value-Proposition


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Satellite Demand

Satellite Supply

Satellite Value

Proposition

Satellite Manufacturing and Launch Services are changing radically; the extent of satellite services’ success will determine

if this is a continuation or a new era


Questions?

Stéphane GounariSenior Analyst, NSR Dublin

www.nsr.com

Europe Office

Northern Sky Research, Ltd (NSR)19 Bolsover StreetLondon W1W 5NA

United KingdomPhone: 44 (0) 207 886 0875

U.S. Office

Northern Sky Research, LLC (NSR)1000 N. West St., Suite 1200Wilmington, DE 19801

United StatesPhone: 302-295-4981

Christopher BaughPresident, NSR London


Key Findings:

� PowerPoint Slides and Session Recording Available on NSR Website within 24 Hours

– NSR Homepage > News & Resources > Webinar & Presentation Archive

� Contacts for Further Questions

Christopher Baugh, [email protected]

Stéphane Gounari, [email protected]

Thank you for attending!


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Wrap-Up


Report COMING SOON!

Visit www.nsr.com forreport executive summary

and more info


U.S. Office

Northern Sky Research, LLC (NSR)

1000 N. West St., Suite 1200

Wilmington, DE 19801Phone: 302-295-4981Fax:302-295-4801

NSR

Europe Office

Northern Sky Research, Ltd (NSR)19 Bolsover StreetLondon W1W 5NA

United KingdomPhone: 44 (0) 207 886 0875

www.nsr.com

Global in Reach. Local in Knowledge. Bottom Line Analysis.

Documents

NSR Webinar- Satellite Manufacturing and Launching- The ... · Satellite Manufacturing and Launching: The Dawn of a New Era February 2014 2 NSR Webinar- Satellite Manufacturing and