By Julie Blondeau
An atmosphere of stiff competition remains overhead as global launch service providers continue to race against time and win as many contracts as possible in today's lackluster market. More importantly, however, each of the players is now more focused on customer satisfaction than ever before. There is no room for error in today's race given the fact that fewer payloads are going to orbit; Clients must have assured access to space and 100 percent reliability for their spacecraft so they are able to move forward with their business plans.
Although the number of launches remained in par with that of 2003, the industry observed a significant redistribution of the launch counts among its providers in 2004. While Russian and multinational launches remained steady at six and three respectively, Europe dropped its launch frequency dramatically in 2004. The United States doubled its market share, attaining a strong lead ahead of its competition.
Clayton Mowry, president of Washington, D.C.-based Arianespace Inc., says his company faced some significant challenges during 2004. "We have been working to get our ECA launch vehicle back into flight, and of course you always want to make sure you've done everything that is necessary for a return-to-flight mission. There also have been satellites that we hoped we would launch but there have been some issues on the manufacturing and operator sides of the business that prevented us from flying those payloads during this year," he says.
Although a lower-than-usual launch frequency rate faced Arianespace in 2004, it managed to maintain a balanced financial keel as it navigated these choppy waters. "We were back in the black and signed a healthy number of contracts," Mowry adds.
Despite last year's low figures, forecasters are predicting a slightly higher volume of launch activity for the coming years. In fact, the FAA Commercial Space Transportation Advisory Committee predicted, in its "2004 Commercial Space Transportation Forecasts" report and in the October 27, 2004 "AST News Bulletin," that the total launch demand for commercial launches worldwide in 2005 should be about 25, which represents an uptick compared to 2004. The reports also predicts a growth in U.S. commercial orbital and suborbital launch revenue, from $585 million achieved last year to $650 million targeted for 2005.
Last year, Virginia-based International Launch Services (ILS) signed 12 launch orders, evenly split between its Atlas and Proton launchers, and its manifest is near full with a backlog of roughly 30 launches on the books.
Arianespace signed seven contracts and is expecting slated for six launches for Ariane 5 and three for Soyuz. But the big event for the company will be the return to flight for its Ariane ECA. As we went to press, final preparations were underway in Kourou, French Guiana for the February 11 launch.
Sea Launch also reported it should conduct six launches in 2005 and its executives say that, for the first time in a long time, all the expected satellites seem to be making good progress so there is confidence that they will be delivered on time. Manufacturing delays have always hindered, reshuffled and strained launch manifests. Sea Launch executives also say the company signed 11 contracts giving it a robust near term manifest.
In terms of general predictions for the coming years, Jim Maser, president and general manager of Sea Launch says, "We don't really see a lot of growth in the business and this is for the entire industry." He adds that, "Last year was pretty low in terms of total contracts awarded. Sea Launch holds about 20 percent of them. We are expecting the market to average between 15 and 20 launches between 2005-2010."
Although the market is not expected to see significant growth, launch service executives such as Mark Albrecht, president of ILS believes that "satellites will continue to play a key role in the development of technology, as new applications are invented to take advantage of satellites' capability for wireless communications."
As for what will be driving the market in the near term, the general consent is that satellite-based subscription radio, broadcasting, voice and mobile data services are growing markets. Replenishment and growth should still be a strong part of the satellite market, driven near-term in North America by the demand for video services, with the next five years expecting growth in the Asia-Pacific region. Finally, many believe in the worldwide implementation of DTH services. "Near term, the North America DTH and HDTV market will be driving satellite and launch services growth," says Albrecht.
From a broadband standpoint, however, opinions diverge. The long-awaited outburst still has not happened. Although there is some business validity within the broadband marketplace, the industry has not seen anything near the major growth that was predicted four years ago. Maser says that, "The terrestrial substitutes seem to be developing faster, which is what really stalled satellite broadband initiatives. People are not willing to invest for fear that the terrestrial capabilities will outstrip the satellite capabilities, and this is what is holding it back." He adds that broadband is not yet a significant driver and is not expected to be until after 2010. On the contrary for Albrecht, "Broadband applications are primarily the continuation of Internet infrastructure build out in Asia-Pacific and Africa. Use of DTH HDTV-type of broadband applications (Spaceway/DirecTV and Rainbow DBS) will continue to be the largest growth applications."
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