Moderate Growth Predicted for Satellite Manufacturing, Launch Services to 2016
PARIS – Euroconsult’s forecast for the satellite and launch business between now and 2016 assumes the merger of the two principal U.S. satellite-television broadcasters and the two satellite-radio providers and China’s full readmission into the global commercial-launch market.
Paris-based Euroconsult also is forecasting the continued operation of two low-orbiting commercial satellite constellations, Orbcomm and Globalstar, but is reserving judgment on whether the Iridium satellite-telephone constellation will be succeeded by a similar architecture.
“We don’t have enough information yet to include a second-generation Iridium constellation in our assumptions,” said Rachel Villain, Euroconsult executive vice president. “We are certainly not making a judgment about whether it will happen.”
Wall Street analysts routinely speculate on the possible merger of satellite-television broadcasters DirecTV Group of Los Angeles and EchoStar Communications Corp. of Littleton, Colo. A proposed merger was rejected by U.S. regulators on antitrust grounds in 2003. More recently, similar arguments about the huge capital-expenditure savings that would follow a merger of satellite-radio providers XM and Sirius have moved those companies’ stock.
Villain said it is logical to assume that these mergers will be permitted sometime in the next 10 years, but that the likely timing means they will not have a large effect on the number of satellites launched during the next decade.
On the launch-services side, Euroconsult forecasts that Chinese rockets will once again be permitted entry into the commercial launch market. Rocket provider China Great Wall Industry Corp. for several years has been prohibited from launching any satellite with U.S.-built components following U.S. allegations of Chinese missile-technology sales to Iran.
U.S. State Department sanctions on China Great Wall recently were succeeded by U.S. Treasury Department penalties, which have the same effect of prohibiting U.S. dealings with the company.
Euroconsult’s “World Market Survey of Satellites to be Built and Launched by 2016” shows moderate growth for the satellite and launch business as a whole, with the number of government-ordered satellites for civil and military purposes growing by 32 percent in the next decade compared to the 10-year period ending in 2006.
The company forecasts that the commercial market will grow by 5.5 percent in terms of satellite units over the same period.
Euroconsult acknowledges the limits of using satellite units as a measure for growth. For satellite-fleet operators, a telecommunications satellite weighing 5,000 kilograms may provide quadruple the capacity of a 3,000-kilogram satellite launched 15 years earlier.
Similarly, the proliferation of small, often inexpensive research satellites, sometimes launched as a group aboard a single rocket, cannot be compared to the launch of a single $200 million spacecraft.
By blending the different entrants, Euroconsult finds an average satellite weight of 1,910 kilograms for the spacecraft to be launched in the next 10 years – an 11 percent increase over the average launch mass between 1997 and 2006.
For commercial telecommunications satellites intended for geostationary or highly elliptical orbit, Euroconsult sees a continued splitting of the market, with increased demand at the high and low end – more than 5,500 kilograms and less than 3,500 kilograms.
Among nonmilitary government programs expected in the coming decade are India’s regional navigation satellite system, the Italian Cosmo-SkyMed and German TerraSAR satellites and Japan’s Quazi-Zenith navigation system. Europe’s Galileo navigation constellation is also in this category.
Among the commercial satellites to be launched by 2016, many are replacements for satellites to be retired. Incremental growth will come from systems including the German RapidEye AG Earth observation system and other Earth observation and telecommunications projects now on the drawing board in South America, North Africa and the Middle East.
Euroconsult’s figures include a limited Chinese Compass navigation system with several satellites in geostationary orbit, but not the full medium-Earth orbit Compass constellation that China is considering. The forecast also predicts that Russia’s Glonass constellation of navigation satellites, which is now being repopulated after several years of neglect, will have a complete complement of satellites in orbit.
Estimates of the value of the total satellite or launch market are made difficult by the nonmarket aspects of domestic satellite and launch contracts in Russia, India and China.
But Euroconsult has estimated that the 960 satellites to be launched in the next 10 years will have a value of $104.5 billion, or an average of $109 million per satellite. Launching the satellites will cost on average $42 million – up 5 percent in value over the previous decade but only because of the increased tonnage to be placed into orbit.
On a per-kilogram basis, Euroconsult sees launch prices dropping by 5 percent over the decade, to $22,130 per kilogram from the average $23,220 per kilogram in the past 10 years.