Satellite Manufacturers Look to Benefit from the Multi-Orbit Future

Satellite manufacturers are grappling with an increasingly diverse and fragmented marketplace, adjusting their strategies for the multi-orbit future of satellite communications.

Customers’ multi-orbit plans represent an “age of opportunity” for manufacturers, Johnathon Caldwell, vice president and general manager of Military Space for Lockheed Martin, said on Monday during the manufacturer roundtable at SATELLITE.

He also spoke about a diversification of customers that companies like Lockheed Martin can benefit from. Lockheed Martin has been boosted in the market by its venture capital (VC) arm, Lockheed Martin Ventures, in investing in new technology companies and building partnerships with these companies to improve its overall offering.

“We have really developed an eye from investing from a VC standpoint. So, for example, it could be in something like AI/machine learning. By investing in many partners, it gives us greater strength to meet the mission outcome for customers,” Caldwell said.

Hervé Derrey, CEO of Thales Alenia Space, added to that saying there is now a “common understanding” that multi-orbit can provide a good approach, and the market is more active as a result. Derrey also spoke of the importance of software and digitization. He highlighted the Thales-built Iridium NEXT constellation, which is fully software-based. This allows for various software upgrades available on this service. “Software is allowing the system to evolve the course of its lifetime,” Derrey said.

While a number of speakers said there is still a place for large, Geostationary Orbit (GEO) satellites, it is clear that many believe the era of small satellites in Low-Earth Orbit (LEO) is upon us.

Cyrus Dhalla, sector vice president and general manager of the Tactical Space Systems Division for Northrop Grumman, said, “It is happening. It is now well established the move to small. It is now well-established in the product chain. We are not on the verge of it anymore. It is here now. A lot of our customers are doing the same types of diversifications (both government and commercial). When we talk about government customers, they are looking to diversify. They continue to buy some capabilities in GEO. But, we are seeing much smaller satellites get ordered.”

Chris Johnson, senior vice president and general manager of Maxar Technologies’ Space segment, highlighted the Earth observation (EO) market as one to keep an eye on over the next decade. “What does an EO capability look like in the future for LEO? We see a big revolution going on in that market. I am excited about the future of EO in LEO.”

Like others, Johnson talked of GEO as still a “core aspect” of Maxar’s business, but the whole combination of GEO/LEO/MEO will be key going forward.

One of the key questions asked to the panel was how manufacturers can improve profits with the move to small satellites, considering they are much less costly to produce compared to a big GEO satellite?

Jean Marc Nasr, executive vice president and head of Space Systems for Airbus, talked of the importance of standardization leading to improved profits. He said, “Small satellites are driving our business going forward. We have produced the OneWeb constellation. We created economies of scale. We have sold that platform to other customers. The market is booming. It doesn’t replace the big GEOs. They will still be there. But, you make money from small satellites through standardization. The profit is better in this market than GEO satellites for Airbus. Standardization enables this. Most of our profits are now coming from constellations.”

Nasr said the more satellite manufacturers can have standardization, the more business it should bring in.

“When you have standards, you can multiply your offering, have better supply chains. Software is also coming in the manufacturing chain. We have digitized the process. We can share digital blueprints with customers, for example. So, you have more efficiency and flexibility,” Nasr said.

While everyone said the market was a great place to be right now, Nasr ended the session with a warning saying that by the end of the decade we could have 50,000 satellites in orbit and there is the potential for the industry to get things wrong. He said the industry must make sure it can handle these new dynamics to “keep the playground safe” for everyone. VS