The outlook for the commercial remote-sensing sector is brighter than it has been in many years, based on the huge orders it is receiving to serve the U.S. Department of Defense (DoD) and intelligence agencies. However, the same level of commitment is lacking from the civil agencies, causing industry officials to urge corrective measures aimed at increasing the size and number of future contracts significantly. With only comparatively limited demand coming thus far from commercial users of imagery, U.S. government funding for remote sensing is the key to the sector’s survival.

The U.S. government clearly has become the anchor customer for U.S. remote-sensing companies. Government support in providing big contracts to the companies previously had been “almost” scandalously inconsistent and insufficient, says Ed Jurkevics, a principal with the Arlington, Va.-based Chesapeake Analytics, a remote-sensing consulting firm.

The National Geospatial-Intelligence Agency (NGA) of Bethesda, Md., known as the National Imagery and Mapping Agency until last November, has stepped up to become a “significant source” of funding for the sector, he adds. The NGA provides vital mapping and imagery data for the DoD and other intelligence agencies.

“The NGA will develop a crack-like addiction to commercial remote sensing data,” Jurkevics says.

The U.S. government’s “benign neglect” of the sector in the past, compared to the present trend of providing heightened funding for military and intelligence purposes, has led the companies on a survival-threatening odyssey that ultimately could leave a number of them still intact, Jurkevics says. Jurkevics, who spoke last Tuesday with industry officials at a panel discussion sponsored by the Mid-Atlantic Chapter of the Society of Satellite Professionals International (SSPI), said more than 35 percent of the annual revenues for U.S. commercial remote- sensing companies is for national security.

Shaky Start

The remote-sensing sector has a dubious history of launch mishaps that have stunted its growth. Fifteen remote- sensing satellites, ranging from government to commercial missions, have failed worldwide since 1993, Jurkevics says.

The investment dollars lost from those disasters have totaled $7.4 billion. Governments such as the United States, Russia, France, Japan, Brazil and Israel that support remote sensing collectively have incurred $5.5 billion in losses from failed missions. The hit to commercial remote-sensing companies accounted for the remaining $1.9 billion, Jurkevics says.

However, nine remote-sensing satellites have been lifted into orbit since 1999. Those missions involved $6.1 billion in combined government and commercial investments. The government share of that total reached $4.6 billion, while the commercial sector chipped in $1.5 billion, he says, adding seven future government-backed remote sensing programs are in the works that involve $2.5 billion in funding.

Clark Nelson, Reston, Va.-based Spot Image Corp’s global communications executive, said his company’s ownership by France-based Spot Image poses challenges in obtaining U.S. government contracts. Spot Image, an operator of three remote-sensing satellites, generated roughly $53 million in revenues last year, with imagery resolution ranging between 2.5 meters and 1 kilometer. The company has been operating in the United States since 1986, and its officials are encouraged by recent positive trends that include a new U.S. national space policy, committed government spending for commercial remote sensing services, and increased openness about using imagery from non-U.S. providers, Nelson said.

“It’s the government commitment that is critical to any system,” he says. Imagery knows no boundaries, and the governments around the world should be free to buy it from non- domestic sources, he added.

“Restrictive, isolationist” policies are detrimental to commercial remote sensing providers, Nelson pointed out.

However, Spot Image concerns include security issues that hinder the distribution of imagery, competition with U.S. companies and difficulty for commercial operators to keep a technological edge. In addition, commercial market demand for remote-sensing data has been soft, he said.

Dawn Sienicki, director of DigitalGlobe’s Washington, D.C., operations, discussed her company’s recent award of a $500 million of a NextView contract issued by the NGA. The contract is aimed at helping to ensure the availability of imagery from the next-generation, commercial, high-resolution imaging satellites. The five-year, NextView contract calls for Longmont, Colo.-based Digital Globe to provide greater access and priority, as well as more advanced capability and capacity than any other previous commercial imagery contract.

Sienicki, in a follow-up interview with Satellite News Senior Editor and Senior Analyst Paul Dykewicz after the panel discussion, said the sector needs more ClearView-type contracts from the U.S. civil agencies. ClearView is a contract that requires commercial data providers to deliver high-resolution satellite imagery over a five-year period, consisting of a three-year base period and two option years.

“They certainly have the requirements that need to be fulfilled,” Sienicki said. “The biggest problem we have right now is budgets.”

Without budget allocations for the civil agencies to order additional imagery, the problem will linger for both the government and the providers, Sienicki said.

Gary Adkins, ORBIMAGE’s vice president of federal and national security programs, says major markets for the collection, processing and distribution of commercial remote- sensing imagery include government and national security, mapping and surveying, natural resources and consumer.

ORBIMAGE recently completed a restructuring, and Adkins says a key advantage for his Dulles, Va.-based company is its lower life-cycle cost compared with other providers.

With ORBIMAGE currently operating the OrbView-1, OrbView-2 and OrbView-3 satellites, the company has become a supplier of imagery to NGA, the National Reconnaissance Office (NRO), the National Aeronautics and Space Administration (NASA) and the U.S. military.

Jill Caporal Jones, Thornton, Colo.-based Space Imaging’s director of government affairs, said her company possesses a 43-percent worldwide market share of commercial remote- sensing services. It also accounts for 79 percent of market share in the world for ground-station hardware and maintenance, she added.

As the world’s largest commercial remote-sensing imagery provider, Space Imaging has attained a 38-percent cumulative annual growth rate for the past five years as well as turning profitable last year, she adds. It also operates the IKONOS high-resolution imagery satellite.

Jones predicts that the future includes increased imagery services for national security customers as well as homeland security, international use and commercial markets. — Paul Dykewicz

(Ed Jurkevics, Chesapeake Analytics, 703/525-6730; Clark Nelson, Spot Image Corp., 703/715-3131; Dawn Sienicki, DigitalGlobe, 202/347-8910; Gary Adkins, ORBIMAGE, 703/480-7551; Jill Caporal Jones, Space Imaging, 703/390-1366)