Orbital Sciences Corp., well-known as a launch vehicle manufacturer, is garnering more than half of its profits these days through the corner of the market it carved for itself building small communications and science satellites for underserved customers.
Orbital won four of the six contracts awarded in 2005 for small geostationary commercial satellites, Ali Atia, president of Orbital Communications International, said during a media day Jan. 31 at the company’s Dulles, Va., headquarters.
And even as larger contractors such as Lockheed Martin of Bethesda, Md., and Space Systems/Loral of Palo Alto, Calif., attempt to break into this area of the market they previously neglected, (See related story, “Strong Market for Smaller Satellites Spurs New Competition,” page 19) Orbital executives insist they are confident they can maintain their lead as the segment’s dominant player.
“I’m pretty confident we’ll be able to capture the same ratio [of small satellites] this year,” Atia said.
Michael French, an analyst with Kaufman Brothers of New York, said Orbital is in a position to retain that kind of business for the next few years.
“They now have an established track record; they have entrenched customer relationships with many operators in that market, and … they’re starting to address other players,” French said. Customers turn to Orbital because of their quick turnaround time (the very small satellites have a 12- to 24-month order-to-delivery schedule) and their efficient management operations, he said.
More than 50 percent of the company’s total revenue came from satellite production and that trend should continue, said Jack Danko, executive vice president and general manager of Orbital’s space systems group. Danko characterized the company’s missile defense business as “fairly stagnant,” and predicted the commercial satellite segment will grow 8 to 10 percent per year over the next few years.
French said he wouldn’t be surprised if the trend continues. “I think this market for the smaller-type birds is a real thing; it’s not a question anymore, ” he said.
Twenty-two commercial communications satellites, including large and small, were ordered in 2006, and Atia predicted the total number of satellites built in the next few years will number in the 22-25 range. Orbital snagged 18.2 percent of the market in 2005, putting it behind leader Space Systems/Loral’s 22.7 percent and on par with Lockheed Martin’s 18.2 percent.
Though Orbital has done a lot of business with Wilton, Conn.-based PanAmSat in the past, Atia predicted the pending merger between PanAmSat and Bermuda- and Washington-based Intelsat would be good for Orbital’s business rather than a blow. “We’d been courting Intelsat way before that … so I hope the merger helps rather than hurts us.”
Orbital recently completed the first phase of a $3.3 million upgrade to its Mission Operations Control Complex. “It’s a one-stop shopping proposition,” said Ray Crough, the company’s senior director of satellite systems engineering. That complex is where Orbital can monitor satellite launches, run simulations and train satellite operators before control of the satellites are passed onto them, Crough said.
The new facility is made up of three mission operations centers, a simulator lab, a network communications room, a viewing room and a telemetry analysis center.
It gives the company a technology and software upgrade, consolidates its operations into one area, and expands the amount of missions which could be monitored simultaneously, Crough said.
Work on phase one, the first mission operations center, began in March 2005 and was concluded in December, Crough said. The company will complete the project by first-quarter 2007.