When Boris Johnson met President Biden at the White House last week, the UK Prime Minister gave him a signed copy of the astronaut Tim Peake’s book Hello, Is This Planet Earth? The British Government has now reinforced its view of space with a more formal publication – the country’s first National Space Strategy. This is an important moment for an industry where the UK has true global capabilities.
The National Space Strategy has not come a moment too soon. The orbits around earth are becoming increasingly important and competitive for technology, communications and security. The UK cannot afford to be left behind. Nor can it afford to be subscale.
That is why the key undertakings of the UK space strategy that focus on innovation, expanding capabilities and improving commercial and defence capabilities in the UK and beyond are so important.
With the UK space strategy now unveiled, our industry should focus on ensuring that we have the right industrial assets in place to execute for our global customers, partners and supply chains. This will require strong government support and a pipeline of quality initiatives to preserve our industry’s capabilities.
Given the changing dynamics of the space industry, there is a real urgency to move from strategic capability to executing the necessary measures that will underpin long-term business success. This is true to all areas of the space industry, perhaps none more so than satellite communications and global mobility services.
Companies such as Inmarsat reflect UK capabilities in space, providing unique global mobility services for commercial users in maritime, aviation and enterprise communications, as well as critical government customers. Demand for advanced satellite communications in these segments is expected to grow significantly over the coming years. The National Space Strategy should enable companies like Inmarsat to grow at an even faster rate, building on the sort of technology leadership represented by ORCHESTRA, our recently-announced communications network.
The UK has an enviable track record in such technologies, but the marketplace for satellite launches, operations and services is undergoing rapid structural change.
On the one hand, the ability to deliver global capabilities at scale is hampered by the fragmented nature of the satellite market, with more than 50 active commercial providers competing to provide a range of services from pay-tv connectivity to defence-related communications.
On the other hand, the market is experiencing a threat of disruption by the arrival of two new-entrant challengers with enormous resources and ambitions. Elon Musk’s Starlink is planning to invest more than the combined capital investment of the rest of the industry to realise his ambitions for global connectivity with the launch of multiple satellites to offer broadband connectivity to hard-to-reach communities. And Amazon has talked about spending more than $10 billion on its massive constellation of satellites.
The new entrants are not only emerging from Silicon Valley; they also include nation-states’ expansion in space. Foremost among them is China, which will this week display its latest satellite capabilities when the biennial China International Aviation and Aerospace show opens in the southern city of Zhuhai at the end of this month. China has expressed high ambitions in satellite communications, including the launch of a 13,000-satellite global “mega-constellation”. Their official policy appears to parallel that which the country had in terrestrial mobile communications 15 years ago, which led to the rise of Huawei and China’s 5G leadership.
New entrant and existing satellite operators expect demand for communications to increase as the global economy recovers from 18 months of pandemic disruption. Whether it is demand for business and household broadband due to remote working or the return of maritime trade and commercial air travel, resilient and ubiquitous connectivity will be more important than ever. As anyone with an unreliable connection will testify, it is no longer acceptable to lose data or the ability to communicate.
And that is why space technology, and particularly satellite communications, can play a vital role in providing truly global coverage, reaching parts of the country and the world that might not be served by 5G wireless or fibre infrastructures.
Yet, to guarantee that connectivity requires significant capital, much of it upfront with a long-term payback over the lifetime of a satellite. Separate from the pandemic disruption, the economics of the space industry requires scale, deep resources and a broad-based customer reach to ensure survival in an industry where satellite capacity is expected to increase by more than tenfold in coming years.
The UK’s new space strategy recognises this challenge. Government recognition of sector issues is welcome but will not, in itself, solve all of the structural challenges that the industry faces. True, new policies and commitments to prioritise the sector are necessary and overdue. However, the industry’s players must be ready to take the self-help measures and consider ambitious moves that will equip them to address the fragmentation and new competitive trends in space. Government support and allowance of partnerships, consolidations and new structures is critical to enable local players to compete at scale in the long-term.
In tandem with structural change, we must preserve and nurture the well-established UK capabilities in space-sector engineering and specialist skills. To do so at scale will probably necessitate partnerships and combinations that both safeguard UK space capabilities and create strong new players in the fragmented and more competitive marketplace.
The National Space Strategy is an important contribution to the evolution of a space industry that will, a decade from now, look very different from how it is today. The winners in the space industry, in the UK and globally, will likely be bigger, serving more customer segments and pooling areas of proven expertise in different aspects of global mobility.
The UK is well positioned to play a key role in this industry transformation. We now have an overarching strategy and have players with the potential to compete at scale with the right partners. By thoughtfully implementing the space strategy– potentially paving the way for more industrial partnerships – the UK can ensure that it builds on established space industry capabilities as communications’ customers demand ever-increasing levels of connectivity.
If we get this right, with enhanced Government support for structural change in the industry, the UK space industry will secure wider global recognition for the sort of technologies, skills and leadership qualities also symbolised by astronaut Tim Peake in the book presented to President Biden last week.
Rajeev Suri is CEO of British satellite operator Inmarsat, which operates a fleet of communications spacecraft in L-band, Ka-band and S-band.