Analysis: DoD ‘pivot to LEO’ a win for commercial satellite industry
WASHINGTON — The U.S. Defense Department’s interest in low Earth orbit space services is a positive for satellite manufacturers and for commercial operators of broadband constellations, says a new report by the market research firm Quilty Analytics.
“DoD’s LEO pivot is very real,” analyst Chris Quilty wrote in the report.
One path being pursued by DoD is the deployment of its own LEO constellation, an effort led by the Space Development Agency. Separately, DoD plans to buy commercial LEO broadband services from OneWeb, Starlink, Telesat and others.
The report estimates that the U.S. government spends about $1.2 billion a year on commercial satcom. This includes mainly geosynchronous satellites, as well as medium Earth orbit satcom from SES and LEO services from Iridium.
SDA’s proliferated broadband constellation known as the Transport Layer is projected to have hundreds of satellites. This will generate significant opportunities for satellite manufacturers, both established and nontraditional suppliers, the report said. Commercial LEO broadband systems “will complement the SDA constellation, creating robust hybrid networks that combine commercial and DoD space assets.”
DoD’s investments in LEO systems will not immediately impact current procurements of satcom capacity from commercial geostationary orbit satellites “though there could be reduced purchases in the latter half of this decade if proliferated LEO fully achieves its performance and other objectives,” said Quilty.
SDA’s program “should help create a vibrant ecosystem of commercial companies that continuously strives to develop new technologies,” said Quilty.
The first batch of Transport Layer satellites is forecast to launch in 2022. Quilty cautioned that SDA’s procurement strategy, based on using products and technologies from multiple vendors and integrating them, could create some risks.
“Integration challenges have consistently presented schedule delays for DoD in complex satcom projects, especially with ground terminals,” said the report. “A higher-than-normal number of vendors introduces new technological challenges.”
One unknown is whether current priorities might change when the Space Force absorbs SDA in October 2022, “which risks reviving slow and cumbersome DoD procurement habits,” said Quilty.