Companies with big bets on U.S. government commercialization initiatives are prominent on this year’s Top 5 to Watch list, as critical milestones loom for NASA’s space station logistics hopefuls while satellite imagery providers face significantly reduced Pentagon spending.
Space Exploration Technologies Corp. () and Orbital Sciences Corp. have test flights of their logistics vehicles planned in the coming months that will determine whether they can begin executing on large commercial contracts to deliver supplies to the international space station. Both companies are well behind schedule, and SpaceX, which is ahead of Orbital, is under the additional pressure of having to prove its rocket and make room on its increasingly cramped manifest for satellite operators that continue to sign up for launches on its Falcon 9 rocket.
Meanwhile, commercial imaging satellite operatorsand have seen the budget for their primary revenue source, the U.S. National Geospatial-Intelligence Agency’s EnhancedView program, trimmed in 2012, with far more significant reductions proposed for 2013. Cuts of the scale reportedly proposed for next year by the agency, whose budgets are classified, could make it difficult for DigitalGlobe and GeoEye to survive as standalone companies over the long haul.
Government’s long reach also is at play in the fortunes of NewSat, an aspiring Australian satellite broadband provider hoping to secure export-credit agency financing by midyear for its Jabiru-1 satellite. NewSat also faces government-backed competition in NBN Corp., which was established to fulfill an Australian mandate to bring broadband to the entire country and which just ordered two large Ka-band satellites.
The companies that made last year’s list bear continued watching this year. Most notable among them is, whose plans to deploy a U.S. nationwide broadband network have run aground over GPS interference concerns. The U.S. government recently revoked LightSquared’s conditional license to deploy its network, and while the company says it is not giving up, it future today is in considerable doubt.
The situation with Loral Space and Communications also remains dynamic. After scrapping plans to sell its Telesat satellite operating division last year, the company is actively shopping itssatellite manufacturing unit. Although Space Systems/Loral continues to have great success in the hypercompetitive commercial satellite manufacturing business, it is not clear who, if anybody, has the will or the means to snap up this property given an uncertain market outlook.
In a new twist, Loral is being sued by satellite ground systems and broadband provider ViaSat, which also made last year’s list, for alleged patent violations. The lawsuit alleges that Loral, which built ViaSat’s ViaSat-1 consumer broadband satellite, used proprietary technology gained in the process to build satellites for other companies, including ViaSat competitors.
As always, the selection criteria for this list are purely subjective. Reader input on companies that should have made the list, or are candidates for next year’s list, are welcome.