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Big Aerospace Goes Big on Smallsats

By | September 4, 2018
      Boeing's headquarters. Photo: Boeing

      Boeing’s headquarters. Photo: Boeing

      When the going gets tough, the tough gets smallsats. This seems to be the case if the tough is big aerospace, and if this refers to the likes of industry giants SSL and Boeing. Both of these large satellite manufacturing heavy weights have proven to be big on smallsats, as of recent. SSL, owned by Maxar Technologies, secured a contract to play a significant role in Canadian satellite operator Telesat’s planned Low Earth Orbit (LEO) communications satellite constellation. To do this, SSL joined forces with Thales Alenia Space in July to form a consortium worthy of winning Telesat’s contract for a system design and risk management project. Then even more recently, Boeing this month shared news of its acquisition of Millennium Space Systems, a provider of smallsat solutions.

      The acquisition, which is expected to close by the end of the third quarter of 2018, will an alternative to big aerospace — as Millennium Space Systems describes itself — become a subsidiary of big aerospace. In combining the pair’s capabilities and — according to Boeing — expanding its talent, Boeing will be adding to its exquisite and heavy satellite repertoire high-performance satellites ranging from 50 kilograms and up.

      So what are tough times like? Both SSL and Boeing have experienced a shift in their typical business. SSL has been considering downsizing its large Geosynchronous Earth Orbit (GEO) operations following a substantial dearth of orders for heavy satellites. This has forced the company to review strategic alternatives, while pursuing the strong growth potential in U.S. government, LEO communications, and Earth observation markets. With a similar tune, Boeing revealed to the media earlier this year that its typical satellite orders are also stuck on a downbound train. Shifting from its mainstay, Boeing has seen its commercial business outperform its government and military lines.

      Faced with orders on the decline and the GEO communications satellite market remaining lower than historical levels, what else can one do but find new business? But is this just about reacting to faltering orders? Or is NewSpace the new black? While acquiring a smallsat player is certainly proof of more than a fleeting affair, SSL’s Group President Dario Zamarian also noted that the shift away from GEO is to be the status quo. According to Zamarian, the industry’s satellite operators are evaluating new technologies and business plans, and industry growth is moving in the direction of LEO and Medium Earth Orbit (MEO) constellations. Demand for GEO communications satellites, he noted, is primarily driven by the replacement needs of existing satellites, and the company does not expect the GEO market to grow.

      Within the GEO market, activity can likely be expected around requirements for digital communications. More recent satellite applications such as In-Flight Connectivity (IFC) and consumer broadband, and the upcoming 5G, said Zamarian, adding that these areas will foster developments in GEO satellites. The capabilities of these satellites developing has resulted in the Ultra High Density Satellites (UHDSs) which are emerging, as well as the trend in standardized platforms and digital satellites providing flexibility.

      While smallsats seem to have great appeal at present, they’re not new to SSL’s prowess. The company may be best known as a prominent manufacturer of GEO commercial telecommunications satellites, but it is also responsible for the manufacture of more than 90 smallsats. These include the first Globalstar communications constellation as well as a constellation of Earth observation satellites for Planet. Four Earth observation satellites built for Planet were launched in 2016, along with six more launched the following year. Upcoming is DigitalGlobe’s next-generation WorldView Legion constellation.

      As far as appeal goes, smallsats have a lot going on and with some of the biggest satellite players getting behind this market to back these smallsats, the future could bring great things. The question now is, who else of the satellite heavy hitters is next to join the furrow? Will strong growth in smaller satellites in the 100 to 500 kgm range reel in some big satellite competition? If GEO has passed its peak, is it now time for smallsats, and LEO and MEO to become the next big thing?