Launchers Get Ready for the Small Satellite Gold Rush

The small satellite industry is set to flourish, but the availability of timely and cost-effective launch services remains a major bottleneck. Launch providers agree that the coming era will require new approaches.

Just five years ago, small satellite operators would say “yes” to any possibility to get into orbit at a reasonable price, says Stephen Eisele, vice president of Business Development at Virgin Orbit. But times are changing, and with the small satellite market growing exponentially, the operators are increasingly aware of their significance for the launch providers and expect more.

Where cost used to be the single decisive factor, the requirements to get into orbit on time and into a specific orbit are becoming more important. Established launch providers, that may have regarded small satellites in the past only as a filler for spare capacity, are embracing the new trend and tailoring their offerings specifically to the new customers’ needs, partly to offset the decline in the geostationary satellite market.

In addition to the established players, about 30 companies worldwide are at various stages of developing dedicated small satellite launchers.

“We have many customers coming to us who are still in the business planning phase,” Eisele says. “And while we see a lot of demand for the traditionally popular Sun-synchronous orbit, there [are] a growing number of customers who feel the need to differentiate from the competition. They look for a specific angle ... they are creating new business opportunities that previously didn’t exist.”

SpaceX launched the Spaceflight SSO-A: SmallSat Express mission in December 2018, carrying 64 spacecraft from 34 organizations.

According to Arun Kumar Sampathkumar, industry manager for Aerospace & Defense at consulting firm Frost & Sullivan, 873 small satellites were launched in the three-year period between 2015 and 2018, out of which 499 were commercial. The firm estimates the next decade will see nearly 10,000 small satellites launched, over 9,000 of which will be launched by entities that have already started launching.

“The launch industry has to evolve a dedicated segment to meet this demand for dedicated launches,” Sampathkumar says. “There are over 30 such new players aiming to become operational in the coming years. Spaceport-based business models that can accommodate multiple such new launch service providers using smaller rockets for dedicated small satellite launch service will form the new segment within the launch industry.”

Bus or Taxi?

Spaceflight Industries, based in Herndon, Virginia, was among the first companies to realize the need for cost-effective launch opportunities for small satellites. Founded nearly a decade ago, Spaceflight sells what its CEO Curt Blake likens to “bus” tickets for satellites to get to Low-Earth Orbit (LEO). The company buys spare capacity on launch vehicles and fills them with an aggregation of small spacecraft from various clients. Last year, the company filled an entire SpaceX Falcon 9 rocket with small satellites — 64 spacecraft from 34 different organizations. It was SpaceX’s first fully dedicated rideshare mission.

“Most of the larger satellite launch providers have definitely embraced the notion of ride share,” Blake says. “It’s probably because of the larger satellite market has had a bit of a downturn, so it’s natural to look to where the business is really growing or is robust. And small satellites [are] certainly the place.”

Blake agrees with Eisele that small satellite operators are getting more demanding and specific about their requirements, requesting exact orbits. He, however, believes, that for many customers, the lower cost of the “bus ticket” will always be more tempting than the much higher cost of a “taxi."

“If you are willing to wait around and compromise, you’ll get a better price,” he says. ”If you need to get into orbit in an exact time, or you need to get into an exact orbit, have a crossing of a specific point on Earth at a specific time, you’d have to get the taxi.”

Both Spaceflight and Virgin Orbit agree that customers are increasingly less willing to accept having their assets sitting on the ground waiting for launch.

“If you are going to have a constellation with a high number of satellites, you need to go to specific orbits, you need to be phased and for the business case to close, you have to do it on your schedule and your time. If you have to wait a year or two, or even miss the window when you are trying to get your constellation up, that can be very negative for your business," Eisele says. "We are seeing it already today with many small businesses and companies. If they can’t keep the schedule then the delays that they are picking up lead to cost overruns, they can’t keep the business running and many of them won’t succeed.”

Eisele argues that small launchers will be pivotal in truly enabling the small satellite industry boom.

Virgin Orbit, a spin-off from Virgin Galactic, which has taken over the latter’s development of an air-launched dedicated small satellite launch system in 2017, has a rather unique approach to making that happen.

The company’s strength, Eisele believes, is in the possible fast turnaround and the portability of the launch system, which can take off from any airport in the world with a spaceflight license and a runway long enough to accommodate a Boeing 737-400.

“Because we are air-launched, we really have an incredible level of flexibility that you do not get from traditional ground launchers,” Eisele says. “Ground launchers are pretty much limited to the latitude from where they are launching, but with the air-launched system we can maneuver and fly basically to any point to deliver the satellite to any orbit and inclination. Because we launch from an aircraft, we don’t need that much time between launches for preparations and pad refurbishments and can actually turn around the launch in 24 hours if required.”

A rendering of Relativity Space's Terran 1, a launch vehicle designed for the future of constellation deployment and resupply.

Responsive Launch

Virgin Orbit has already signed multiple contracts with prospective launch sites and plans to perform its maiden flight in early 2020, given all safety checks allow, Eisele adds.

The company aims to develop a worldwide spaceport network from where it could serve various customers according to their exact needs. All launch support equipment, Eisele says, could be taken to the site in trailers.

“Once you have a more permanent spaceport network, you can do interesting things with responsive launch,” he says. “That involves a quick call-up to deliver a satellite into direct inject orbit or a specific orbit. If you have multiple spaceports, you get flexibility, you can launch simultaneously, and that enables you to populate or place a whole constellation in under 24 hours.”

Virgin Orbit is also looking to ramp up production of its rockets and have them stocked up to be able to serve a customer whenever needed. The aim, Eisele says, is to be launching multiple times a month.

Relativity Space, established in 2015 and headquartered in California, also plans to offer rapid responsive access to space. The company is developing a fully 3D-printed ground launcher, which it hopes will be commercially available in 2021.

The company’s Vice President of Business Development and Government Affairs Joshua Brost said reliance on additive manufacturing cuts production, simplifies the production process and reduces cost, allowing the company to offer what he described as the best price in the market. The company says they will be able to make a rocket in under 60 days.

“As the market evolves, customers are wanting more and more flexibility and wanting to purchase their own launchers closer and closer to the actual launch date,” he says. “Historically, satellite operators would purchase launches two years before launch and then got a very long integration process. But many of the satellite operators that are in the market today are building satellites much faster than that and want to get them to space as soon as they are finished being produced.”

He expects the market to further fragment with some small satellites getting somewhat bigger and more sophisticated, and the operators to require more from launch providers than just being an afterthought.

“We offer rapid access to space for small satellites, taking them exactly to their end destination, while the large launchers can certainly offer a lower price if the customers are willing to take the sub-optimal orbit and wait until there is a full mission aggregated,” Brost says.

Frost & Sullivan’s Sampathkumar says that while cost will remain the strongest factor influencing the choice of a launch provider, schedule and availability will play an increasingly important role.

“Not having to pre-book and wait one year in advance will drive many new players towards those services which allow booking on short notice,” Sampathkumar says. “With serial production of small-satellites kicking in, the different production schedules will result in lumps of demand for launch slots over the calendar year and the flexibility of booking a launch close to the launch date will drive decisions further.”

The trend, he adds, will be toward a more diverse offering and a lower price for the client.

Getting the Best Deal

Blake expects launch service providers, such as Spaceflight, to play an important role in the brave new world of small satellites, managing a sophisticated portfolio of launch options that will enable utilizing the available assets most effectively.

“When we started, there was just a very few launchers that were willing to take ride shares and willing to book multiple customers onto a vehicle,” he says. “Now, with the proliferation of small launch vehicles, there is a lot more choice in what the customers can select. Many customers will still be OK with launching four times per year, but for those who need more options, we will have more granularity.”

Blake believes that it always be better for satellite companies to purchase launches from launch service providers such as Spaceflight Industries rather than from launch providers directly, despite the presumed slightly higher cost per kilogram to orbit. More efficient filling of spare capacity, compared to what any individual launcher would be capable of, as well as the ability to swap customers around if needed, will provide the best cost to reliability ratio, according to Blake.

“If you have a launch vehicle and it costs eight million dollars to purchase and it’s half full, then the price is much higher per kilogram and per customer than it is when it’s completely full,” he says.

“The other advantage is that launch vehicles and customers alike have difficulties over time and what we do is that we put enough customers over enough launch vehicles so that if someone has a problem ... we’ll move them off that launch and substitute someone else in. We charge them a change fee but by doing that they won’t lose the investment they have in that launch vehicle.”

Megaconstellations Unproven Business Case — Is it a Risk?

The growth in the smallsat market is expected to be driven by the arrival of megaconstellations such as OneWeb or SpaceX’s Starlink. Some argue that the business case for these projects is not yet proven, and many might not succeed in the long term. In November last year, LeoSat, which planned to operate a constellation of about 100 cross-linked satellites, aiming to provide high-speed internet services to business and government users, suspended operations due to a lack of investment. The launch providers interviewed by Via Satellite, however, don’t see the fate of LeoSat as a cause for concern.

“Like any emerging market, you will see some of these providers succeed and some not,” Relativity Space’s Joshua Brost says. “But I think that the net result will be a much larger market than we have today. The launch services providers that will be flexible and adaptable to whichever of those business models win out will be the ones that will capture most of the market.”

Stephen Eisele of Virgin Orbit says that large constellations are not a main focus and the company only expects to provide complementary services to these operators.

“The majority of constellations we focus on are much smaller — five, maybe fifty satellites,” Eisele says. “The mega constellations will mostly use big rockets. But even if some of the first-generation megaconstellations won’t make it, which is quite likely, they will pave the way for new markets, new applications and services."

Frost & Sullivan’s Sampathkumar says that despite LeoSat’s failure to secure further investment, OneWeb's progress suggests that megaconstellations are heading toward a self-sustainable model.

“Uncertainty is unavoidable for these new players,” he says. “They have to secure the funding and the constellation size imposes a waiting time following which they have to launched into orbit. The launch service providers ... can capitalize on the waiting time by evolving their serial production capabilities to achieve multiple launches over a year.” VS

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