Industry Trends Push Smallsats Into Larger Territory

In 2011, there were fewer than 1,000 active satellites on orbit. Today, there are well over 5,000. The next wave of telecom constellations is not just hundreds of satellites but thousands, and even tens of thousands of satellites. Where is that market going, what are the challenges of large and small satellites — and given this context, and how can a company keep up with customer demands? A roundtable discussion at SATELLITE 2022 took on those questions with smallsat industry CEOs.

Mina Mitry, CEO of Kepler Communications, said that he helped build his business by going out and buying underlying intellectual property from companies that have been building components in the sector for a very long period of time.

“We used that to build our own manufacturing capability,” Mitry said. “What is really important about having this manufacturing capability is for rapid cycles of learning. We get the benefit of being deeply entrenched in understanding what is required, and what levers we can pull to make for a better telecommunications business.”

While many companies in the smallsat side of the industry use cubesats, that seems to be a dying trend, according to Vytenis Buzas, CEO of Nanoavionics. “10 or 15 years ago, everybody was thinking that the future of the small satellites and of the nanosatellites would be based on 1U cubesats,” he said. “It wasn't entirely true. We suddenly realized that we have to seek some kind of vertical integration. Three years ago, we decided that we have to reorganize ourselves,” he said.

Nanoavionics analyzed the economics of cubesats and felt that the trend was headed toward heavier buses. “That was because the launch prices were decreasing sharply,” he said. “We started to think on a bit bigger scale.”

AAC Clyde Space has its own small but growing constellation. “We are actually growing not just in terms of supplying hardware and supplying satellites, but also providing the services,” said Luis Gomes, CEO of AAC Clyde Space. “We have seen over the last few years that many customers don't actually want to own satellites and go to the trouble of operating their own ground stations. We are seeing a trend with people asking: ‘Can you provide me the service? Can you provide me the data?’ We are moving in that direction.”

Millennium Space Systems, which is now part of Boeing, focuses primarily on national security space. CEO Jason Kim said this has made the organization nimble because of high performance demands. “It's about helping our servicemen and servicewomen come back home safely. The national security space mission demands high performance satellites, affordability and quick timelines. That's why we got into the small satellite business.”

The company is also structured for vertical integration, which helps when the mission operations and the national security space customers have a lot of demands that change requirements. “We have agile design practices that allow us to address those current and future requirements,” Kim said.

Marc Bell, founder and CEO of Terran Orbital Corporation, began his comments by reminding the panel that his company was part of the origin of cubesats because it acquired a parts manufacturing company founded by Jordi Puig-Suari, the California Polytechnic State University professor who invented the cubesat. “We started off with cubesats, and now we're building satellites up to 500 kilograms,” Bell said. “We are payload-agnostic. We build everything for 5G, Internet of Things, synthetic aperture radar, hyperspectral imaging, whatever the customer demands.”

“It used to cost $1 billion to build a satellite and take eight to 10 years to build it,” Bell said. Today you can do it for $10 million and do it in 12 to 24 months. It's been transformational. All these companies sitting here on the stage have transformed this industry. It no longer takes a decade to build a satellite.”

Low-Earth Orbit (LEO) constellations have opened up a new dimension of opportunities, along with the price of launch being significantly reduced, Bell said. “It’s made for a perfect storm to allow this whole industry just to blossom as you see it doing today.”

So, should the industry be working with large smallsats, or small smallsats?

“The question sometimes is more with the customers, and to understand their needs,” Gomes said. “What is the requirement? There are some customers that are not sacrificing quality and they will actually stick with that bigger satellite,” he said. “But there are those that are actually able to accept a reduction in the quality of the data in exchange for the reduction in cost.”

One advantage he sees with smallsats is that it allows people in the community to try out new communications technologies affordably and quickly.

Bell said that he has been following the trend toward larger satellite systems. “You're seeing people put [things] into satellites like collision avoidance systems,” he said. “This industry is evolving at a very rapid pace. You're seeing the bus sizes are increasing, and the value propositions are increasing. It's all about the solutions you are solving.” VS