OpEd: The Rebounding Satcom and Space Industries

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  Space News Business

OpEd: The Rebounding Satcom and Space Industries

By JOSEPH N. PELTON

posted: 06 February 2006
12:16 pm ET


A bout seven to eight years ago, just before the turn of the millennium, the telecom and dot.com crashes were just beginning. Shortly thereafter, the NASDAQ would crash and burn to less than half its value. Many in the investment banking community were writing off the satellite industry in the wake of the bankruptcies of ICO, Globalstar, Iridium and Orbcomm, and the seemingly stagnant growth of the fixed satellite organizations like PanAmSat and Intelsat. Most bright young analysts on Wall Street were saying that the satellite communications (Satcom) industry was dying, and the future belonged to fiber optics and cable modems.

But now let’s switch to 2006. The Satcom industry, less than a decade later, is in the middle of a strong resurgence:

– Acquisitions by SES Global and the merger of Intelsat and PanAmSat have positioned them as particularly strong global contenders.

– Subscribers on mobile satellite systems now exceed 500,000. Mobile Satellite Ventures just unveiled plans to purchase three humongous new satellites from Boeing equipped with 22 meter antennas to implement the new hybrid ATC terrestrial and satellite mobile service.

– The number of subscribers to the two satellite radio broadcasters — XM Satellite Radio and Sirius Satellite Radio — have topped 9.3 million and growing strong.

– Launch service contracts, long in the doldrums, are up.

– Plans for U.S. military network-centric communications via the Global Information Grid have a strong satellite component, and Thales has contracted to deploy the next generation of the U. K. ‘s Skynet satellite system through an innovative long-term commercial lease arrangement.

Federal Communications Commission Commissioner Kevin Martin said: “If we learned anything from Hurricane Katrina, it is that we cannot rely solely on terrestrial communications.”

Indeed satellite organizations played a critical role in providing emergency communications during our recent disasters (see www.emergencycomconference.org). In order to see the breadth and width of the rebound in satellite communication from 1998 to 2006, one might just look at the Society of Satellite Professionals International Innovator’s (SSPI) Awards that will be given out during Satellite 2006, Feb. 6-9 in Washington.

Among those recognized by the SSPI awards committee are:

– The innovative IPStar system deployed by the Shin Satellite Corp., whose 11,000 pound satellites transmit information at an extremely efficient rate of 2.4 bits/Hz.

– ViaSat for applying the cable television interface standard DOSCIS to interactive Internet Protocol-based services via satellite.

– e-Mexico for deploying 3,000 Very Small Aperture Terminals (VSATs) across Mexico for tele-education purposes.

– The Red Cross for restoring emergency communications along the U.S. Gulf Coast via satellite and temporary 802.11 antennas deployed with great speed during the hurricane emergencies.

– The new U.S.- and Spanish-based X-TAR system for deploying a commercial satellite network to provide military and governmental services via the X-band.

– Finally, the Telenor Satellite Broadcasting Corp. for innovations ranging from IP-based services to High Definition Television services.

The wide geographic range of these awards (Thailand, United States, Mexico, Spain, Norway and Spain) suggests that the satellite industry is currently thriving around the globe. All major sectors — fixed, mobile, direct broadcast television and audio services — are growing. Meanwhile, mergers and acquisitions with participation by the equity markets are providing organizational and management strength to the industry as well.

From the start the Satcom industry has been the largest commercial space activity. At more than $100 billion dollars a years in total revenues from all components of the industry, it retains that title.

But the significant trend to note is that the whole idea of a dynamic space industry is seemingly now beginning to catch fire as the satellite rebound zooms ahead leading the way.

Virgin Group Chairman Sir Richard Branson, founder of Virgin Galactic, is now taking reservations for space tourism flights into low Earth orbit .

NASA has just put out a request for proposals to contract for commercial services to ferry astronauts and cargo to near Earth space.

Robert Bigelow is proceeding with plans for a commercial spacehab, and space pioneer Brad Edwards says he can build a space elevator to provide cheap access to the Moon, Mars and beyond, and accomplish the task in only 15 years and for only about $10 billion dollars.

Hardly a week goes by that the telephone does not ring with someone with an exciting new idea in the area of space or satellite technology that they want to develop.

The resurgence of not only the Satcom industry but the whole space enterprise seems to be exploding with new enthusiasm, new capital and startling new confidence — from all around the world.

Joseph N. Pelton, PhD, is director of the Space & Advanced Communications Research Institute at George Washington University, and a former dean of the International Space University.