Manufacturing Leaders Address a Changing GEO Market, and Faster Timelines

The demand for satellite connectivity is strong, yet changing needs and evolving technologies have raised questions on how the market will shift: Will operators embrace a multi-orbit strategy? How will business models adapt to shifting demands — and speedier timelines — for rolling out services?

A panel of satellite industry experts addressed these and other hot topics during Monday morning’s SATELLITE session, “Satellite Industry Financial Forecasts from the Satellite Builders.”

Moderator Dallas Kasaboski, consultant for NSR, an Analysys Mason company, addressed the burning question of the future of Geostationary Orbit (GEO) future right off the bat, asking panelists to weigh in on whether the dominance of Low-Earth Orbit (LEO) will impact GEO. Recently, NSR estimated that the non-GEO share of total high-throughput capacity demand would grow from approximately 21 percent in 2022 to about 52 percent in 2032.

“Hardware, software, business models all of these are changing and being disrupted,” said Kasaboski. “The main point to take away is that the number of non-established or non-traditional manufacturers impacting the market is increasing.”

But speakers strongly agreed that GEO is not dead.

“Our business is split into two chunks to provide subsystems to Geosynchronous satellites and then provide satellites for LEO and MEO [Medium-Earth Orbit],” said Mike Greenley, CEO of MDA Space. “But we absolutely believe that the sustainment of the GEO side is full steam ahead.”

Ryan Reid, president of Boeing Satellite Systems International, compared the impulse to ditch one orbit for another to someone who has a really nice house on the beach but abandons it for the mountains simply because more people are skiing now.

“It’s an ‘and’ solution between the lower cost access to space and the flexible technologies we have with digital payloads that allows solutions to come to bear in a more economical way,” he said. “When it comes down to it, GEO is the best way to get the economics of bandwidth, which at the end of the day is the constrained resource. So when it comes to an operator trying to drive economic value, it's hard to beat what you can do with GEO.”

However, Reid admitted that the use cases for GEO, including those that blend GEO with other orbits, are shifting.

“It's absolutely evolving,” Reid said. “It's different than what it was in the past. It's absolutely in concert with other orbits.”

Agreeing that there’s a lot of opportunity for flexibility, Kasaboski pivoted to a more recent example of satellite’s trend for non-GEO investment, SpaceX's investment in Starshield for government customers, asking: “Is that a threat? Or is that an opportunity? Does it affect you at all?”

Greenley suggested that the whole industry will benefit.

“It encourages not just a strong commercial market for constellations but a government market to pick up commercial services from constellations,” said Greenley. “I think that it drives a lot of volume of production in the market. But all the other constellations also create a large opportunity for manufacturing volume in the market. If folks have a repeatable product and have the volume and manufacturing [and] can keep up to the scheduled pace of constellation customer demand, then I would not see it as a threat right now.”

Chris Johnson, CEO of Maxar Space Systems, agreed that the development isn’t much of a deviation from what others are already doing.

“I don’t think it’s that different than what a lot of us have been doing in GEO,” said Johnson. “Starshield to me is just an application of an idea that's been around for a little while. It's just that scale and then a different orbit. I think that's a great conversation to continue to push because I think that's what we're trying to do with our investments. We make investments in order to serve multiple customers and multiple missions and multiple orbits. This kind of kickstart offer reinforces the fact that using commercial capabilities to do all kinds of different missions.”

In addition to focusing on industry, speakers discussed where they are investing their resources based on what their customers want.

Hervé Derrey, CEO of Thales Alenia Space, emphasized the need for more resilient technologies.

“What we see also is a growing need for resilience and capacity to work hard environments,” said Derrey. “Our systems need to do very well in protecting against cyber threats, but also chemical threats.

Alain Faure, executive vice president of Space Systems for Airbus Defence and Space, agreed, noting the company has taken the steps to roll out more flexible solutions to the market.

“Over the past year, we invested a lot to bring a new solution to a market, a larger satellite in GEO, with a flexible payload,” said Faure. “Now it’s time to produce and deliver, to propose incremental steps to the market [and] to prepare for the future.”

Several speakers noted that the timelines of bringing solutions to market have sped up, particularly mentioning the Space Development Agency’s (SDA) impact as a government customer.

“The SDA has shifted very significantly what it means to come to market — faster timelines, faster technology insertions. How do I get the capabilities up quickly?” said Maxar’s Johnson, referring to the SDA’s flurry of contracts for commercial space and satellite organizations. “We’re seeing it in other DoD space and intel programs as well that customers are looking for better value and quicker-turn technology.”

Reid concurred: “It’s not changing our approach but it’s sharpening our focus,” he said. “The market is telling us on the government side that we need to standardize our products to achieve the predictability at the rates and pace at which the demands are coming through.” VS