Four fears satellite manufacturers can’t shake

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WASHINGTON — Manufacturers are generally optimistic that last year’s rebound in commercial geostationary satellite market orders marks the beginning of trend. After two years of single-digit totals, manufacturers sold 15 geostationary satellites in 2019.  

At the Satellite 2020 conference, executives from Airbus, Boeing, Maxar, Thales Alenia Space and Northrop Grumman expressed confidence that commercial business will remain strong. 

“We think the future is bright and we’re excited for it,” said Frank DeMauro, Northrop Grumman Space Systems’ vice president and general manager for tactical space systems. “I don’t see any dread.”

Nevertheless, manufacturers voiced concerns about new risks and challenges. 

Satellites getting hacked

Manufacturers rolling out reprogrammable, software-defined satellites worry hackers will find vulnerabilities. 

“Cybersecurity is probably the only thing that keeps me awake at night,” said Jean-Marc Nasr, head of space systems at Airbus Defense and Space. 

If a hacker was to take control of an Airbus-built satellite, the damage to the company’s reputation would be irreversible, he said.

“If the trust disappears, there is no business,” he said. “However innovative you are, it’s gone.”

Lockheed Martin runs internal “hackathons,” directing its own employees to look for ways to break into satellites, according to Guy Beutelschies, Lockheed Martin Space’s vice president of communication satellite solutions. 

Satellites are increasingly at risk of cyber attacks, making cybersecurity a vital part of building a satellite, Beutelschies said. 

“Customers are going to recognize that [cybersecurity] is a capability they will absolutely have to have coming into the future,” he said. 

Not building fast enough

Dan Jablonsky, Maxar Technologies chief executive, said faster build times are increasingly important.

When operators request proposals for a satellite, it is sometimes because of a pressing business opportunity. 

They “[have] to take advantage of it very quickly, not just because of competition but because of changing market conditions or otherwise,” he said. “We are constantly figuring out how to do things faster.” 

Maxar can comfortably build a standard broadcast satellite in 24 months, Jablonsky said. 

“To me that feels fast in space these days,” he said. “But it feels like in other industries that’s a really long time.” 

Beutelschies said Lockheed Martin’s Pony Express-1 cubesat it built with Tyvak took nine months to build and launch. Though the mission is just a prototype to practice cloud computing in space, Beutelschies said it will help Lockheed Martin build satellites faster for government and commercial customers. 

“Commercial is telling us to move faster, [and] our government customers are saying the same thing: we want to go fast, so show us that you can do it,” he said. 

Pony Express-1 launched on an Indian PSLV rocket in December.

Talent troubles

Maxar is expecting healthy demand for communications satellites in 2020 despite years of market weakness that triggered company layoffs in 2019. Jablonsky said Maxar is now concerned about “whether we can continue to hire the right technologists, the right engineers, the right technicians, the right leaders, and whether the supply chain can keep up with” an increase in demand.  

“The ecosystem has to work to make that happen, and it’s brittle after the last few years,” he said. 

DeMauro said Northrop Grumman has a “pretty substantial mentorship program” to encourage employees old and new. That mentorship program focuses on encouraging employees to learn from each other and bring new ideas that Northrop Grumman can commercialize, he said. 

At Thales Alenia Space, it is a “day-to-day fight” to push employees to build satellites faster and cheaper, even when that means deviating from tried and true practices, according to Pascal Homsy, executive vice president of Thales Alenia Space’s telecommunications division.

“The traditional satellite industry used to say, ‘the bird that has to meet the specs no matter what the cost is’,” Homsy said. “It’s a complete change in the way the engineers are apprehending the development of the satellites.”

Unstable customers

It’s difficult to predict and identify business opportunities. 

Homsy said the company is having too many conversations with constellation hopefuls that lack the money to fund the large satellite constellations they envision. 

 “Every month we meet people saying ‘we are going to raise $1 billion or $2 billion, what can you do for me?’” he said. “This is a bit disturbing.”

Thales Alenia Space was preparing to build 78 to 108 satellites for LeoSat, a startup planning a $3 billion constellation. LeoSat shut down last year due to a lack of investment. 

“What is a bit scary is the fact that we have lots of projects emerging without” solid financial footing, Homsy said. “It’s been blurring the market.”

Nasr said Airbus is concerned that not all satellite operators have long-term stability. 

“What will be the operator landscape in the coming five years?” he asked. “I have difficulty to see it; it’s kind of blurred at the moment. But the operators are our customers, so we need them to stabilize.”

Manufacturers didn’t name the operators whose stability they question. But Intelsat, one of the world’s largest operators by revenue, has a shareholder pushing the company to choose bankruptcy as a means of influencing the U.S. Federal Communications Commission over a spectrum proceeding.

Furthermore, three operators, AsiaSat, Avanti and Inmarsat, delisted from public markets last year, shielding their financial performance from public view.