This issue of the Satellite Applications Catapult’s quarterly Small Satellite Market Intelligence report provides an update of the small satellites launched in Q3 2019 (1st July - 30th September 2019). This edition also includes an article on the potential of small satellites in GEO.

Q3

2019

SMALL SATELLITE MARKET INTELLIGENCEREPORT

02SMALL SATELLITES LAUNCHED IN Q32019

OVERVIEW After last quarter’s massive 154 satellites launched, this quarter has returned to a more normal 62 small satellites being launched, which is slightly above the average of the past 5 years. There was a total of 11 launches, four of these were by small satellite launch vehicles and there was only one large rideshare launch. The first launch of two small satellite launchers, Hyperbola by iSpace and Jielong-1 by CASC, were successful this quarter showing the increasing prevalence of small satellite launchers. We are back to normal this quarter with no major constellation launches, namely Starlink, with the largest being Spire who added 7 Lemur-2 satellites to their constellation. Not one company dominated the launches this quarter with the 62 satellites coming from 38 different entities. This year is still on track to have the highest number of small satellites launched.

Note: The mathematical model line in the graph above (simulating an accelerating market uptake followed by a levelling off) represents a general trend and not a prediction per year.

03

APPLICATIONSApplications are defined by the primary objective of the mission as categorised below:

• Communications: tthe objective of the mission is to transmit or receive signals to/from a user terminal or gateway; Technology/ Scientific: the objective of the mission is to gather knowledge to better understand physical phenomena or to test the functionality of the payload or equipment;

• Earth observation/ Remote sensing: the objective of the mission is to provide imagery or data relating to the Earth or its atmosphere.

This quarter has been consistent with previous quarters/years in terms of the proportion of applications being used in small satellites, with the majority being Technology/Scientific satellites closely followed by Earth Observation/Remote Sensing satellites. This quarter there were no major constellations skewing the statistic, with most large constella-tions involving communication satellites, showing that continuing interest in research and earth observation, and that they remain the primary focus for small satellites. The number of Technology/Scientific satellites shows the continued level of innovation in the sector.

The 62 small satellites launched this quarter continue to show the irregularity in the number of satellites launched per quarter, with 13 and 154 launched in the first and second quarter respectively. With no major constellation operators launching high quantities of satellites, which also lead to a reduction in rideshare opportunity, 62 small satellites is around the average number of small satellites launched per quarter. In turn, the continued irregularity in the number of satellites launches in each quarter is mainly due to small satellites currently having to rely on infrequent rideshare opportunities. SpaceX is promising a more regular rideshare launches available from March 2020 along with the new ventures in small launch vehicles bring more flexibility, competition and accessibility for small satellites. There is still projected to be more small satellites launched this year than any previous year, with more constellation launches planned for Q4, namely Starlink and OneWeb.

04SIZE AND MASS

This quarter shows the continued popularity in the nano-satellite size category with it being the most common format for small satellites this quarter. There have also been 12 pico-satellite launches, with the majority going to the Technische Universität Berlin’s launch of 5 BeeSat’s, an experimental and educational satellite. Pico satellites have been very popular with educational and research institutes, with 9 of the 12 pico-satellites this quarter coming from Universities. Micro-satellites have also been primarily used for earth observation satellites with 11 of the 16 being used for that purpose.

Satelliteclassification Satellitesubclassification Associated wet mass range

Small Satellite < 500 kg Mini-satellite 100 kg - 500 kg Micro-satellite 10 kg – 100 kg Nano-satellite 1 kg – 10 kg Pico-satellite 0.1 kg – 1 kg

05ORBITS

Note: Launch failure includes orbit failures whereby the satellites significantly missed their intended orbit to the detriment of the mission.

This quarter saw the majority of small satellites launched into Sun-Synchronous Orbit (77% of launches), the Soyuz launch, the only large rideshare of the quarter, accounted for 32 satellites all going to SSO. There was one launch failure of the Iranian Space Agency’s Safir-1B, an Iranian small launch vehicle, who were planning to launch their own micro-sat.

06LAUNCH ORGANISATION

LAUNCH

There were 11 launches from 9 different launcher families with first time launches for iSpaces’ Hyperbola-1 and China CASC built Jielong-1, with both these being in the emerging category of small launch vehicles. Out of the 10 launch vehicles who launched small satellites, 4 of them were purpose built small launch vehicles showing success in a developing market, however they only accounted for 12 of the 62 launched satellites.

A new category for the quarterly report, showing the change in the organisations that are launching satellites. It shows the rapid commercialisation of the small satellite sector with commercial organisations being a part of over 60% of satellites being launched. The academic and research organisation have had a reduced share but still play a crucial part in the industry, whereas government organisations have drastically lost their share of the sector to commercial companies. This shows the increasing profits to be made from and the potential of the small satellite sector.

07SMALL SATELLITES IN GEO

INTRODUCTIONGeostationary Earth Orbit has been, and still is, the domain of large multi-ton communications satellites, with the companies behind them having vast budgets, global missions, and are a consistent stake holder in the commercial space sector. The satellite industry is evolving continually and on the leading edge of innovation, small satellites have seen this impact more than any other with their development of new smaller technologies and ever decreasing cost of manufacture and launch, as well as small satellites being used as the basis for the vast majority of satellite research. This innovation has been clearly seen within Low Earth Orbit, with the likes of SpaceX and OneWeb just starting their respective ventures into mega constellations, but the growth in small satellites has yet to be paired with the advantages GEO may have to offer.

A few companies are trying to break the mould and are recognizing a potential for utilizing the advancing small satellite sector in a Geostationary Earth Orbit and disrupt the current standard; they are seeking to combine the advantages that GEO offers whilst mitigating its disadvantages with the booming SmallSat technology growth to target new markets. These upcoming ventures are not only by optimistic start-ups, but by experienced organizations with the likes of Arianespace and Boeing hoping to be early adopters.

This article aims to give an idea into some of the potential and risk in using small satellites in Geostationary Earth Orbit and will give an insight into the companies which are trying to fulfil this idea as well as companies who are helping it become more accessible.

Low Earth Orbit is increasingly accessible with launches becoming cheaper and more flexible (especially with the recent advent of small satellite launch vehicle manufacturers such as Rocket Lab) whilst accessibility and cost reduction has not been as dramatic with launches to GEO. Companies wanting to send small satellites in GEO currently have to rely on inflexible and irregular rideshare opportunities or hosted payloads. There are some companies that are trying to make it easier for small satellites. For example:

ArianeSpace1, the world’s first commercial space transportation company, is trying to predict this new market with the announcement of a new launch vehicle in the making, the GO-1. It will be designed to provide access to GEO explicitly for the next generation of small satellites and will accommodate multiple small satellites with its 4500kg payload capacity, short wait time and a transit to GEO duration of under 6 hours. They are planning to ‘pave the way for a SmallSat revolution in geostationary orbit’ offering the flexibility, efficiency and speed that small satellite companies need to access GEO.

Momentus2 is another company preparing for an emerging market by trying to lay the groundwork for the in-space transportation sector; their satellite, planned for 2020, will be able to deliver satellites directly from LEO to GEO, along with other orbital choices, whilst trying to reduce the cost to reach specific orbits as well as making access easier.

SpaceX3 has announced they will start providing more regular launches from March 2020 with at least one per month at a reduced cost. There are 29 launches scheduled between then and December 2021 that are available for rideshare missions, this should start making the rideshare option more attractive due to its reliability, frequency and cost.

These companies will add more routes for small satellites to enter GEO which in-turn will reduce costs and add flexibility for these companies, making it more of an attractive option.

1 https://www.arianespace.com/press-release/arianespaces-go-1-mission-will-provide-small-satellites-with-a-direct-flight-to-geostationary-orbit/2 https://momentus.space/3 https://spacenews.com/spacex-revamps-smallsat-rideshare-program/

HOW SMALL SATELLITES GET TO GEO

08

COMPANIES WANT TO USE SMALL SATELLITES IN GEO

6 https://www.ovzon.com/en/7 https://boeing.mediaroom.com/2019-09-09-New-Boeing-702X-Satellites-Offer-Unique-Multi-Mission-Flexibility8 https://www.gsatcom.com/about9 https://www.satellitetoday.com/business/2019/06/19/exclusive-choi-teases-further-satellite-business-launch-after-saturn/

Astranis4,5 is using small GEO satellites to improve access to internet connective in underserved areas, entering into a highly competitive market. By using the cheaper and faster production of small satellites it becomes economically viable to enter smaller markets as well as allowing their service to be scalable, with Astranis planning to add more satellites one by one. They have recently announced a partnership with Pacific Dataport which plans to make use of the first of its 300kg satellite to provide more coverage and capacity over Alaska in 2020.

GapSat5 is a Hong Kong based company that fulfils short term capacity shortages of satellites by identifying other satellites in orbit which have excess unused capacity and reselling this surplus. Instead of having to lease larger and higher capacity satellites than needed to fill operators’ requirements for extra capacity, they are making their service more efficient by launching their own satellite, GapSat-1, with a mass of 250kg. The satellite, manufactured by Terran Orbital, will allow the company to use its capacity efficiently without having any idle excess capacity, this is only viable to the lower cost of building and launching a small satellite to GEO.

Ovzon6 and Boeing7 are both developing small GEO satellites, however, not small enough to be under our definition of a small satellite (< 500kg) but around 1000kg and under 2000kg respectively which is a lot smaller than the typical GEO satellite and considered small for the market. This shows a further interest in downsizing the traditional GEO satellite model. Ovzon say the small GEO approach is an economical way to concentrate the satellite’s capacity in a small area with higher power levels for which the customer can use smaller terminals for.

GSATCOM8 and Saturn Satellite Networks9 both aim to be the first in building small satellite platforms for use in geostationary Earth orbit. GSATCOM next generation is trying to offer telecommunication solutions to be implemented on a small size geostationary platform. While Saturn Satellite Networks is trying to create the world’s first space qualified small GEO satellite platform. Saturn say they’re aiming for a small, efficient, lightweight and low-cost satellite platform that is accessible to all especially for customers who only have smaller requirements and needs.

Credit: Astranis / SpaceNews

9

CURRENT MARKET

Currently geostationary Earth orbit is occupied by large, expensive satellites and Low Earth Orbit, although it is used by a wide variety of satellite types, is dominated by cheaper smaller satellites. Data from UCS10 shows an average Launch Mass of Satellites going to GEO at over 4000kg, with the recent TelSat 19V weight over 7 tonnes, whereas Low Earth Orbit is the destination for over 95% of small satellites and they make up 70% of all satellites in LEO. This shows the disparity of the two orbits.

Satellites in LEO are always expected to outnumber those in GEO due to its cost and accessibility, however over the past 8 years LEO has become significantly more popular compared to the share of satellites being launched to GEO. The accessibility to GEO has not had near the same increase as it has in LEO, and the risk in capital of sending a satellite to GEO has remained very high. Although innovation has remained high in GEO satellites, still under 3% of the satellite launched into GEO and, also, under 4% of large satellites have had technology development as a purpose. This shows the difficulty in testing new GEO innovations in orbit, and that great capital is needed and at risk to incorporated new technologies.

A smaller form factor satellite comes with trade-offs in propulsion capabilities (heavily relied upon due to GTO delivery) , data capacity, power and other factors in order to reduce its size; this has made it difficult for small satellites to find advantageous business cases compared to the current GEO satellites. The larger more expensive satellites can also withstand long mission lifetimes (around 15 years) to get their return on capital expenditure whereas smaller satellites generally have under half that lifetime. But with the current innovations in miniaturisation in satellite technology, deployables and other GEO technologies, the cost benefit of sending a small satellite to GEO is starting to become a more viable business case.

10 https://www.ucsusa.org/nuclear-weapons/space-weapons/satellite-database

10

WHY SMALL GEO SATELLITES

Competing with existing GEOs

In short, small satellites have the advantage is the lower capital expense in build and launch along with a faster build time at the sacrifice of capacity and power. Small GEO satellites do have some niche competitive advantage over large multi-tonne GEO satellites; however, the larger more expensive satellites would be more cost effective in most markets and provide higher throughput and capacity in most cases. The few perks of a smaller satellite allow for use cases that may not be as economically feasible for traditional GEO satellites: the ability to have a lower life span of satellites and continually roll out newer satellites (Astranis plan to only have a 7 year life span on their satellites, with legacy models being over double this); the ability to be scalable to the exact requirements of a region by rolling out more satellites (even within the same orbital slot); the ability to fill its satellites capacity easily (no idle capacity wasted) and serve as a gap for existing GEO communication satellites when that capacity is needed (a service GapSat is trying to provide). They seem like they have an advantage over large GEOs however the cost benefit of having a large satellite providing higher throughput and greater coverage allows for more attractive cheaper service for customers in a global market, so it is down to whether companies can find a niche in the market where the advantages outweigh the global powerful service that existing satellites provide.

Competing with LEOs

Small Communication GEOs satellites may perform a similar overall function as their LEO counterparts however they become very different in their product and roles in the market. Whilst LEO communication requires a constellation of satellites to provide consistent coverage of a location, a communication satellite in GEO only needs one satellite for a service to function and more satellites can be added when operations want to be scaled up. This leads to lower risk as there is less capital expense before there is a return on the investment, and the ability to focus on a specific market instead of having to go for a global market. LEOs do have the advantage of being able to provide much lower latency and this is important for a few scenarios but for the primary basic functions of data communication it is not wholly necessary.

11

Exploring new markets

Small GEOs have the more unique ability of viably being able to focus on and solely serve customers who want more control and independence over their communications; this gives extra security, reliability and flexibility to customers who want this, the main example would be governments who want their own satellite communications but also their independence from large scale globally operating satellites. The idea of focussing on a smaller market is a strong case for small GEOs as the lower price point, the reduction in development and manufacturing costs and the lower launch cost with the ability to be a part of cheaper rideshares or be the secondary payload, allow for the ability for smaller satellites to find profits in areas that large satellite providers would not find as economically attractive.

Global HTS Capacity Supply25,000

20,000

Gbps 15,000

10,000

5,000

02018 2028

Source: NSR

CAGR

- 26.4

%

Addit

ion of

17.3 T

bps

CONCLUSION

Innovation is constantly propelling the space sector and small satellites have been and are still one of the key drivers of this growth. However, this innovation has been restricted to Low Earth Orbit and the development of small satellites has not seen its presence higher up. There are some niche markets that have potential for small satellites, with their lower cost bringing in options for services that were not economical viable for larger satellites. But outside of these niche markets they will struggle to compete with the long-standing multi-tonne GEO satellites, which can provide a much more cost-effective service with their larger capacity and coverage. The continued furthering of launch capabilities for small satellites to GEO will greatly help the accessibility to this orbit and partnered with the fast development of technology on small satellites there will be future opportunities for small satellites in GEO. The past few years have shown how the significant development in small satellites have been used to exploit many new markets, but for now, GEO is a risky venture with few specific use cases that could have potential and it is up to the first few companies to pave the way and demonstrate how close the emerging market is to coming to fruition.

11 https://www.nsr.com/are-small-geos-the-next-big-thing/

NSR11 are predicting that the global GEO-HTS capacity will have a CAGR of 26.4% while this is very promising for HTS, NSR believes it would be very easy for the sector to fall into an oversupply problem. A continuous challenge for satellite operators who are adding HTS capacity is finding the demand for their service to be able to get the large return on their investment they need. So NSR believes that small GEOs could gain traction by allowing operators the option to adopt HTS in a more focus way and serve only their core markets. With this growth in data supply and demand, small GEOs are enticing due to their scalability, and their low capital expenditure and low time-to-market allows for rapid adoption of new technologies and the ability to get a first mover advantage. Although they estimate large HTS payloads will generate the bulk of the supply and be more cost efficient, Small GEOs will be able to capture some opportunities presented by a fast-growing market which has a diverse set of demands; Astranis’ planned operations in Alaska is the perfect example of this.

012

Disclaimer: whilst every effort has been made to provide accurate and up to date information, we recognise that this might not always be the case. If any reader would like to contribute edits or suggestions to our reports, kindly email the team and we will make the amendments.

Q3

2019

ContactThe Small Satellite Market Intelligence report is designed as a free data source to share information that is easy to access and use. We welcome feedback on other data points that would be of value to include. You can contact us at:

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