National Satellite Operators Challenging the Paradigm
It’s getting busy up there: in addition to commercial FSS, MSS, LEO and MEO operators both existing and planned, we are also witnessing an increase in the emergence of national satellite operators. We take a look at the reasons why these programs are established and the influence that they are having on the wider satellite landscape.
For decades, satellite programs were the preserve of the countries that could afford them. Harnessing the cash and capability to buy, build and launch a satellite has long been beyond the remit, and budget, of many nations. However, there are several crucial factors that are changing and, in 2016, going forward with a satellite initiative is suddenly a much more viable proposition. Added to this greater accessibility, there is a new awareness and interest in what space can do for us. People all over the world are engaged in talk of space. Space and satellites are in the news and there is much talk about current and future programs.
Many of the countries considering, or in the process of implementing these satellite programs are still developing, yet they recognize the benefits of so-called “satellite sovereignty.” They see how space can enable them to solve a host of challenges, which then moves satellite initiatives up the list of priorities for governments all around the world.
In the recent report, “Emerging Space Programs – Trends and Prospects,” Euroconsult finds that the falling price of satellite technology has been a crucial factor in the increasing amount of nations investing in their own satellite systems. The report states that the number of countries investing in their first satellite systems increased from an average of five countries between 1996 and 2000, to more than 20 from 2011 to 2015. National satellite programs launched nine satellites in total last year alone, a record that the report says “confirms the dynamism of this market.”
Less pricey Earth Observation (EO) satellites have often been the first choice for nations making their first foray into satellite system development. However, national communications satellites have seen a significant increase in launches, and this is a clear driver for the market. The Euroconsult report found that “the share of satcom programs increased between the two decades [1990s and 2000s], now representing 40 percent of all missions launched from Emerging Space Programs (ESPs). There has been a decline in EO funding from 34 percent to 27 percent across the same timeframe that underlines this trend toward communications satellites.
Since the mid to late 1990s, there has been a distinct shift in gear from ESPs as they invest in more sophisticated satellites with a greater range of capabilities. Between 1996 and 2005, Euroconsult found that the investment base was at a fairly low rate of around $135 million on average per year. Fast forward to 2015, and an impressive $1.44 billion had been invested — an 11 percent Compound Annual Growth Rate (CAGR), demonstrating solid commitment by these countries to advancing their satellite programs.
Who are the ESPs?
We have already established that many of the nations either proposing or making their programs a reality are developing countries themselves. Countries from Asia, the Middle East and Africa (MEA) and Latin America have all launched satellite programs over the last two decades, with Asia and MEA ranking highest with 33 percent and 32 percent of satellites launched, respectively. Euroconsult names countries to watch in terms of their potential investment as Iraq, Kuwait, Oman and Colombia, with other countries such as Myanmar, Ecuador, Gabon, Papua New Guinea and Sudan also looking seriously at investing. Euroconsult forecasts that there will be 47 ESPs worldwide by 2025.
What is it about a national satellite program that attracts governments and why are they so important?
In securing access to satellite-based services for national users, a country is supporting its socio-economic development through access to either communications or EO data. Communications satellites can enable a country to bridge its digital divide and to connect its users to the internet, facilitating access to the global marketplace. It can stimulate education, better healthcare and government services. EO satellite programs can enrich knowledge of natural resources, farming, land cover, mapping and agriculture. They can also be used for specific military and security applications, enhancing homeland security and border protection.
Satellite programs offer countries the opportunity to diversify their economies. Space is seen as the next frontier, with many opportunities that extend well into the future. A satellite program also affords a nation the opportunity to develop and encourage Highly Qualified Personnel (HQPs), such as engineers. These people can gain talent through technology transfer agreements with other space-savvy countries, and technological capabilities can be developed and used to further national space ambitions. In the Middle East, both the United Arab Emirates and Qatar, have significantly increased their engineering skills base through Yahsat and Es’hailHat respectively.
With a national satellite system also comes an element of prestige, and this can often influence bordering countries, creating the “me too” effect in order to gain influence or regional leadership.
However, it is not so much the systems that solve the problem. The key is enabling end-users to gain from the technology: “Ensuring the actual benefits to the end user is the number one point of concern for the countries and agencies developing such programs” says Steve Bochinger, COO of Euroconsult.
Mexico’s Mexsat provides an excellent example of an operational national satellite program. The Mexican Satellite System or Mexsat was initially meant to comprise three telecommunications satellites. Sadly, Mexsat 1/Centenario did not reach orbit after a launch failure. However, Mexsat 2/Morelos 3 and Mexsat 3/Bicentenario are operational in orbit after their respective launches in 2015 and 2012.
Mexico is a country that wants to be recognized as a hi-tech nation and is demonstrating its commitment to making this happen. According to the World Bank, internet penetration stood at 44.4 percent. To see the undeniable progress this country has made, we need to compare that to the stats from 2000, when that figure stood at just 5.1 percent.
The satellite program, developed by the Ministry of Communications and Transportation, is important to the Mexican government and people.
“Mexsat has enabled Mexico to gain sovereignty and to access enhanced coverage and performance. Mexsat has also given us autonomy of operations, the ability to develop our satellite industry, and has given us affordable access to satellite capacity” explains Mauricio Avila Gonzalez, technical director of telecommunications for Mexsat.
Mexsat has opened up the development of a nationwide strategy for Mexico that complements terrestrial networks in challenging areas such as bridging the digital divide and public safety. The capacity has also empowered Mexico’s government when natural disasters strike or law enforcement operations take place, allowing capacity to be made available as and when it is required.
Mexico is also nurturing new satellite talent. “Engineers from different disciplines participated during the manufacture, launch campaigns and operation of the satellites, creating more than 100 highly trained, specialized personnel within the Mexican government,” says Gonzalez.
The Mexican Space Agency is currently working on the backup satellite for the Morelos 3 L-band capacity. However, the agency’s interests do not stop at its own doorstep. It is looking forward to a bright future, enabling other countries in the region to learn from Mexico’s experiences.
“We see ourselves as a growing operator that will handle country-specific programs that are being developed through the Ministry of Communications and Transport, and we are looking forward to developing specific skills to help other governments throughout the continent with their operations and growth” Gonzalez adds.
The Peruvian Experience
Another Latin American country, Peru, very recently took its first foray into space with its PeruSAT 1 initiative. Successfully launched in September 2016, the satellite hosts an Earth Observation (EO) payload that will deliver high-quality imagery for both civil and military applications such as homeland security, border control, disaster management, illegal trafficking, mining, geology and coastal surveillance. The system will provide timely satellite information on Peruvian territory — a need that was identified by various government sectors.
“The analysis carried out to demonstrate the viability of the project saw an important return on investment in terms of significant savings in various sectors of the state” says Gustavo Henriquez, Chief of the PeruSAT 1 project. “Additionally, there are clear benefits in the Peruvian State entering space, such as the introduction of a first generation of Peruvian engineers qualified in space systems that can project on future space endeavors.”
Like Mexsat, the strengthening of the Peruvian engineering workforce has been a key area of focus for CONIDA, the Peruvian space agency. Indeed, the project itself saw CONIDA sending a large contingent of Peruvian engineers to the Airbus Defence and Space facility in Toulouse, France to participate in the development process of the satellite system. The homegrown engineers have now have gained invaluable experience in the design, construction, validation and testing of the system and have acquired a detailed knowledge of the development of a spatial system.
The PeruSAT 1 initiative has also been a source of national pride for the people of Peru. Not only that, it is also set to be important for relations between Latin American countries.
“The satellite is the first sub-meter observation satellite in the region,” explains Henriquez. “CONIDA now has an important tool of international cooperation to allow the exchange of spatial information of earth observation in the region. The introduction of the Peruvian state to space with the most advanced earth observation system in the Latin American region, grants Peru an important role in terms of international relations. This has permeated society as an element of national pride and it also represents a technological tool for future benefits”.
This theme of cooperation, of knowledge transfer and sharing of experience is absolutely key in the development of national space programs. Learning through the experiences of others will enable new entrants to embark on more successful and more sustainable satellite initiatives of their own.
Effect on Commercial Operators
The effect of national satellite programs on commercial operators and capacity has been extensively discussed. Commercial operators have the knowhow and the experience, some with global coverage, and many do not see the benefit of sovereign satellite programs.
Two camps of opinion exist within the commercial industry. The first believe that inexperienced national operators can do more harm than good with their programs. Some say that these programs do not benefit the end user, are not economical and simply cannot compete with the services being offered commercially.
The second camp believes that the commercial industry should encourage and help national operators rather than decry them. Why should they not develop their own infrastructure and industry? After all, the implementation of a national satellite program does not mean that a country will shift completely from its commercial providers, but would rather work in tandem with them to ensure that a breadth of services are offered.
Whatever side of the fence you sit on, one of the main challenges that national operators do face is delivering to their end users. “It is a matter of concern as these new agencies must educate users on how to use the satellite (telecom or EO)” comments Bochinger. “Governments must also invest in their ground segment, terminals or processing centers, and this is not always fully undertaken. The danger is often to focus on the satellite infrastructure and not enough on the ground and the end users. This is often a weak point.”
Another concern lies in the transfer of technology. Countries have a lot of expectations from these types of agreements, but implementing a balanced relationship with supplier is not always so easy.
For national satellite operators, the current focus on High Throughput Satellites (HTS) that is so evident in the commercial satellite sector is not a priority on a national level. However, this does not mean that national operators are not interested in HTS. Commercial HTS can work as a complement to their national systems.
“For now, we are not developing any HTS-type solution for the national program. We are convinced that the industry must fill this capacity over Mexico. We have noticed an improvement over the years with respect to commercial operators that are willing to invest and take a risk by placing capacity over Mexico” says Gonzalez. “We will rely on HTS and FSS operators to fulfill the increasing demand for [data] capacity.”
“ESPs are usually not HTS,” explains Bochinger. “They usually focus on C- and Ku-band for standard video and data connectivity. Some may have a few Ka-band transponders, but only a few. I would say that ESPs take the increasing supply that is available through HTS into account, but their rationale goes beyond the simple access to data. Some may conclude partnerships to complement their own system.”
Partnerships between national and commercial operators are expected to become much more commonplace. For example, at World Satellite Business Week, Kazakhstan announced that they expect to partner with commercial EO company UrtheCast to help them to strengthen their EO offering.
Too Much Capacity?
With concern about over capacity already dominating the commercial satellite industry, will national operators not simply add to that problem? The satellite landscape is already crowded, so is there really room for a steady stream of new capacity from national operators?
From the Mexican perspective, the Mexsat program meets unmet demand at a reasonable cost. “We fulfill a country-specific need, providing MSS and FSS services with a large variety of equipment and solutions,” Gonzalez says. “We have coverage over land mass and sea as far as 200 nautical miles on the Pacific and the Gulf of Mexico. We provide all this at a fraction of the cost that traditional operators provide services for government specific users.”
From Peru’s angle as an EO satellite operator, there is no concern about oversupply. In fact, the team at CONIDA sees the increased availability of EO satellites as a positive. “More EO projects will offer users a wider variety of applications which require a higher temporal resolution. The trend is also toward missions with more spatial resolution which will allow new applications on a regional level” concludes Henriquez.
Bochinger believes that more concern should be leveled at the impact of the influx of commercial capacity. With established operators launching terabit satellites and new commercial constellation projects, their influence on supply will have much more significance. “I think the impact of these emerging programs is more on local market prices as they commercialize extra capacity in their region at prices not necessarily aligned with commercial prices. This can disturb market conditions, but we are not speaking about highly sophisticated systems such as HTS from commercial operators, for instance,” he says.
A Trend Set to Continue
The journey ahead for both established and emerging satellite operators is both an exciting and challenging one, but the benefits of a successful initiative are undeniable. Independence, socio-economic growth, security, technological development and the all-important last mile connectivity are just some of the advantages. However, this can only happen if close attention is paid in terms of making it work for the end-user. Without sufficient education and ground infrastructure, the satellite system falls flat and its benefits are not maximized. The same goes for technology and knowledge transfer; the correct approach is crucial.
From a commercial perspective, national programs bring about polarized opinions. However, it is acknowledged by national operators such as Mexsat, that commercial capacity still remains important, especially for applications requiring high throughput capacity. Here, it seems that national and commercial systems will complement each other, rather than competing with them.
With so many nations expected to confirm plans for their own programs in the coming years, this trend is not going away and satellite sovereignty will be at the forefront of many a debate for years to come. VS