PARIS — Twenty-six commercial geostationary-orbiting telecommunications satellites were ordered in 2010, a slight decrease from 2009’s 30-satellite harvest that nonetheless disproved analysts’ warnings that the cyclical industry was headed for a downturn.
The 26 satellites referenced here do not include government-owned research or military satellites whose commercial mission may be an afterthought. Argentina’s Arsat 2 geostationary satellite, featuring a platform built by Argentine industry, is not included since its primary mission is for the government.
Similarly, the French-Italian Athena-Fidus Ka-band broadband satellite, intended for military and civilian applications and funded by both governments, may have a commercial mission but does not figure in the Space News tally.
Finally, the $2 billion, 81-satellite Iridium Next order booked by Thales Alenia Space for mobile satellite services operator Iridium Communications is impossible to ignore, even if the satellites are in low Earth orbit.
The Iridium order is just one example of the continued weight of government export-credit agencies in the satellite industry. Iridium and competitor Globalstar of Milpitas, Calif., both are funding their second-generation constellations with support from France’s Coface agency.
2010 Commercial Satellite Contract Chart
Coface continues to be the most active export-credit agency in the satellite industry. But the U.S. Export-Import Bank in recent months has backed a Space Systems/Loral contract to build the Amazonas 3 satellite for Hispasat of Spain with $228 million in guarantees, and a three-satellite order to Boeing from Inmarsat of London for Ka-band satellites. The Ex-Im Bank’s support for the Inmarsat award totals $666 million.
Boeing’s three-satellite Inmarsat order was followed by another three-satellite contract, with the Mexican government. Boeing will build two of these spacecraft, having contracted the third out to Orbital Sciences Corp. These deals, when added to a four-satellite contract with Intelsat in 2009, indicate that Boeing is delivering on its promise to re-enter the commercial market after several years of largely remaining on the sidelines.
For the launch services industry, 2010 was a year of mainly smooth sailing. Sea Launch of Long Beach, Calif., was busy with bankruptcy restructuring and was absent from most competitions in 2010. The company says that with its new backing from RSC Energia of Russia, it will return to flight in late 2011.
That left just International Launch Services (ILS) of Reston, Va., and Arianespace of Evry, France, to carve up most of the commercial market. The exceptions were the showcase Iridium order with Space Exploration Technologies (SpaceX) of Hawthorne, Calif., for that company’s Falcon 9 vehicle, and the three commercial launch orders won by China Great Wall Industry Corp.
Two of the Great Wall orders were for Laotian and Bolivian satellites being built by Chinese industry in package deals that also include the satellites’ construction and insurance. China also picked up an order from Hong Kong-based APT Satellite Holdings, which is owned by Chinese interests.
ILS Chief Executive Frank McKenna, who has warned that the peak of the cyclical satellite market was imminent and would be followed by a sharp decline in orders, agreed that a couple of surprise contracts in 2010 appear to have delayed the downturn.
In a Jan. 5 interview, McKenna reiterated his concern that new launch vehicles set to enter the market in the coming years will arrive in the middle of this downturn and risk throwing the market into a price war. This, he said, may have short-term benefits for some satellite operators, but destabilizes the industry over the longer term.
Meanwhile, McKenna said, “You can’t get market conditions much better than this.” Launch prices are firm, even rising modestly. The two principal commercial vehicles — ILS’s Russian-built Proton and Arianespace’s European-built Ariane 5 — are well-proven and have the confidence of the market, as proved by Proton’s ability to return to flight just three weeks after a failure of its upper stage destroyed three Russian Glonass navigation satellites.
The ILS Proton uses a different upper stage and was cleared for flight in time to make a final commercial launch in late December.
McKenna said ILS, which conducted eight commercial launches in 2010, expects to perform eight or nine in 2011, a rhythm to be made easier as the company inaugurates, in mid-2011, a new satellite-processing facility at the Baikonur Cosmodrome in Kazakhstan.
Arianespace Chief Executive Jean-Yves Le Gall said the commercial environment appears stable enough to permit Arianespace to raise prices to reflect the proven reliability of the Ariane 5 rocket.
One possible worry for ILS and Arianespace is the relatively small number of large satellites — those weighing more than 4,500 kilograms — in the 2010 tally of launch contracts. ILS and Arianespace are making minor modifications to their vehicles to raise their payload-carrying capacity, which for Proton means a 2012 ceiling of 6,300 kilograms of satellite payload.
Arianespace is bringing the Ariane 5 rocket capability to above 9,000 kilograms for two satellites. The rocket now appears likely to undergo a major upgrade starting in 2012 as European governments endorse a new, restartable upper stage for the vehicle that would increase capacity to 10,000 kilograms or more.
Space News’ annual tally of commercial launch contracts does not include those for which the customer has not been identified. Arianespace, for example, says it signed a contract in late 2010 but did not name the customer, so it is not included.
