Business models for satellite-based operations – dents and directions

In praise of engineering prowess

In February 2022, SpaceX successfully assembled a 400ft rocket using a trio of giant robotic arms, in an impressive ballet of engineering dexterity and prowess. This involved quickly and effectively stacking the different components, using technologies far beyond the traditional cranes and simple hoisting.

It was only one of a remarkable series of engineering and technology feats that Elon Musk’s break-the-mould space engineering shop has ratched up, upending the entire business model for launching satellites into orbit. Big among SpaceX achievements has been recovering (those landings!) and then re-using many of the launchers, instead of just letting/making them burn up on re-entry.

Satellite-based salvation

For technophiles (of which I’m one, I admit), it’s easy to get enthusiastic and wax lyrical about satellite-based gizmos and capabilities that are increasingly a prerequisite for our modern lifestyle and for the basics of how our society functions. How could we live without our GPS, omnipresent mobile phone coverage, our doses of Netflix/Disney and other streaming entertainment, and the entire swamp of social media worship and addiction?

But it’s usually the satellites that actually deliver the practical value and user benefits, with daisy chains of technologies literally piggy-backing on their orbiting hardware. The launch vehicles that companies like SpaceX, Blue Origin, Arianespace, United Launch Alliance and Dynetics provide are only the delivery trucks, not the cargo with the real value.

Launch proliferation

With commercial intervention, launching satellites has almost become a “commoditised” operation. SpaceX and its post-NASA-era competitors have drastically reduced metrics for both cost and time-between-launches by recovering and re-using the launch vehicles. Such developments have in turn resulted in a proliferation of satellite-based activities – scientific, commercial and military. In just two years, the number of active and defunct satellites in low-Earth orbit (LEO) increased by over 50%, to about 5000 (as of March 2021).

SpaceX alone had previously received authorisation to launch about 12,000 satellites into low-Earth orbit to provide broadband internet, and has already launched more than 1,900 of these car-size satellites required to do this. In 2019, the company requested authorisation for a second-generation mega-constellation, consisting of 30,000 satellites. Other companies – including OneWeb, Amazon, Telesat and GW – have similar plans. In April 2022, Amazon’s Projekt Kuiper, for example, booked 83 launches to get 3,236 satellites in place to provide broadband internet services.

The disposal question

However, peppering low-Earth orbit with increasing numbers of satellites like this could have substantial consequences. Almost every launch has added to the myriad bits of space debris floating around up there. As of April 2022, the European Space Agency estimates there are 130 million objects ranging from 1 mm to 1 cm in size – and often it would only take one or two of these hitting vulnerable spots to damage or disable a satellite or space station, or disrupt or wipe out am expensively implemented mission.

 

 

 

 

 

 

Furthermore, many of the satellites and mission hardware already launched have stopped working, and are now just obsolete space junk. These remain floundering in orbit, at some (largely unknown and unpredictable) risk of hitting other spacecraft – including those carrying humans – and the multitude of satellites we now depend on for much of the infrastructure of our society.

Relative value

If one starts to look beyond the mere engineering and the hardware “wow!” factors in satellite-based operations, some questions begin to arise. OK, the experts can now recover the big chunks of hardware, but these are mostly just big empty fuel tanks and cylinders with various coverings and some internals. Once their fuel loads have been burnt off, there isn’t much to them, and recovering them doesn’t save much in the way of materials and resources.

Whereas it’s usually the satellites that contain all the fancy stuff – the high-value equipment, the exotic metals, the rare earths and the other valuable natural resources of which there is only a very finite supply on our little home planet. And what happens to these??

The rubbish dump mindset

There are four basic ways redundant hardware and “space junk” usually get dealt with. The first is to leave it up there, out of control and increasingly likely to cause damage and accidents as junk density levels increase exponentially. The second is to either let it – or make it – burn up on re-entry into the earth’s atmosphere. The third involves sending the equipment into a chosen “graveyard orbit” for disposal. The fourth consists of letting the debris splash down and disappear somewhere in the earth’s oceans – usually in the renowned “space cemetery” in the southern Pacific, following the decades-old “out of sight, out of mind” mantra of so-called free dumping.

Recently, there have also been several spotlighted instances of operators crashing space vehicles into the moon to “get rid of them”. Humankind has actually been doing this occasionally for decades – there’s an easy-to-digest overview of such efforts, accidents and events here – although it hasn’t yet become standard practice.

It would seem a declaration of ethical failure if space operations now start turning other celestial bodies/planets into rubbish dumps, as we have done so disastrously with our home planet. In these days of ESG reporting and a growing focus on the responsible use of our finite resources, this kind of “dumping mindset” – and the resulting disturbance of pristine environments and planet-scale pollution associated with satellite-based operations and services – seems to be running out of road. Resources are finite and precious, so why should we deliberately burn them up or dump them in the world’s oceans? Repeating the mistakes of mankind’s first couple of millennia isn’t a recipe for an unproblematic future, but unfortunately we’ve already begun repeating the sins of our fathers on Mars. According to one reliable source, the surface of Mars is already littered with 7,119 kilograms of human-made debris from half a century of robotic exploration.

The demise of innocence?

As satellite launch programmes moved from just serving as megabucks national prestige projects, and became more widespread and more commercial, the familiar expansionist forces began to emerge. International collaboration flourished, with the International Space Station becoming a “co-operative programme” involving Europe, the United States, Russia, Canada and Japan, often serving as a symbol of the most complex scientific and technological endeavour ever undertaken. Launchpads across the world became occupied by vehicles propelling satellites built, owned and operated by many different countries into orbit, and international became the name of the game.

But from about 2020 onwards, the mirror cracked. Globalisation was no longer an unconditional advantage – internationalisation hiccups, chip shortages and accelerating supply chain vulnerabilities, as well as political and economic bloc rivalries and resulting punitive sanctions, began muddying the techno-driven nirvana. Big time …

One of the many repercussions of the 2022 Russian invasion of Ukraine was that politics, international sanctions and political as well as commercial arm-twisting made a very visible entry into the world of satellite launching and the delivery of payloads into orbit. For example, certain aspects of ISS operations suddenly became a bone of international contention, and UK satellite company OneWeb was forced to suspend its launches from Baikonur in Kazakhstan, after Russia demanded guarantees that OneWeb technology would not be used for military purposes. Similarly, the European Space Agency is now having to look for new launch operators because sanctions against Russia preclude continuing to use Soyuz rockets via the Roscosmos state space agency.

The blithe assumption that “satellite-based” is a safe, techno-clean moniker and the communication memes that follow from this are unreservedly “good”, progressive and unquestionable seems to be on the way out. It seems that “space – the final frontier” – and its domesticated sibling (better known as satellite-based operations, in all their wonderful diversity) have now passed beyond the age of innocence and uncritical acceptance of their technological artistry and wunderfunk. Political brickbats and dirty tricks have (unfortunately) made serious inroads into space-based operations, and you can’t put the proverbial genie back in the bottle.

Supply chain component

Another disruptive influence is that satellites are not just an innocuous hardware stand-alone, dutifully disseminating benefits once successfully in orbit. Satellites are well up towards the end of many high-value/high-profile supply chains, as well as being the pivotal hardware for many different types of global infrastructure and services.

Everything is connected, especially when it comes to accountability and responsibility for planet-damaging processes and other environmental impacts. If their business model is to be viable, companies that contract for satellite launches and that rely on satellite-based services often have to/want to engage in increasingly stringent ESG reporting, as well as to profile their compliance with frameworks such as the United Nations Sustainable Development Goals. Satellite and satellite-based operations can (probably) no longer be exempt from society’s wider goals and constraints for responsible, sustainable operations. Not in the long term.

Many astronomers, for example, claim that space should be subject to the same legal protections as land and sea to protect its fragile environment from space junk and environmental deterioration as well as light pollution.

Looking forward

Space launches and satellite-based operations have long been driven by a simplistic “progress of technology” narrative, largely curated by the “victors” in one of the most spectacularly technological rivalries in history. That’s why it’s intensely thought-provoking to watch Apple TV+’s For All Mankind, which provides a remarkable “what if” alt-history about how the great powers’ space race might have panned out just a tiny bit differently – with massive follow-on changes to narratives we now take as givens.

But since the emergence of SpaceX, Blue Origin and their other commercial compadres, the whole narrative about rocket launching and satellite-based operations has begun changing. On the supply side, miniaturisation, standardisation, modularity and the pre-2020 widespread availability of commercial off-the-shelf (COTS) components and sub-systems – accelerated by reliable computer modelling – have made it much quicker and easier to develop, assemble, test and launch new equipment packages – scientific, commercial and military.

New narratives

A lot of the forthcoming changes in satellite-related innovation seem to centre on platforms and capabilities as well as cost-per-launch metrics. There is an increasing focus on space infrastructure, capabilities and frameworks rather than on hardware specifics and traditional engineering gymnastics. Even the US Army is on the lookout for new ways to buy satellite services, focusing on “end-to-end” services and durable hardware that’s easy to set up in austere locations in order to quickly provide any required connectivity. Parameters like flexibility and MTBF (mean time before failure) service life are important.

A lot of new narratives are emerging for satellite-related innovation and operations, often at ambitious “big picture” levels rather than featuring traditional engineering one-upmanship. The following provides a few examples …

• Relativity – “Building Humanity’s Multiplanetary Future” – is building the (allegedly) first automated factory for rockets and satellite launch services, exploiting the advantages of advanced 3D printing. According to CEO Tim Ellis, “We’re reinventing the underpinnings of not just building rockets, but … how you actually design, develop, build and scale a company.”

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  Relativity’s proclaimed capabilities – by the numbers

The Exploration Company puts out its ambitious shingle for “democratisation”, aiming to make space exploration affordable, available and much more open. This mainly involves Nyx, a modular and reusable orbital vehicle that appears kinda’ next-gen Space Shuttle, and it seems it will even be refuellable in orbit. The design is multi-capable, paving the way to a wide range of possible mission profiles.

Companies like Maxar and Planet operate hundreds of low-cost earth observation satellites that capture images of the Earth’s entire landmass, updated every day. Such capabilities are typically positioned as making change visible, accessible and actionable, and thereby helping businesses, governments, researchers and media understand the physical world and take effective action using this knowledge. The pivotal point here is neither the satellites nor their technical capabilities, but the actionable situational awareness that can be derived from up-to-date information. Reflecting this step-change, in 2019 Planet reframed itself as a data company, and now claims to be “the leading provider of global daily Earth data”.

Such positioning reflects a significant change in the kinds of strategic profiling open to satellite-operations companies, often presented and marketed as Satellites-as-a-Service (SataaS) or Data-as-a-Service (DaaS). Such capabilities can often be supercharged by implementing AI-based surveillance from space using multiple on-board sensors, leveraged by sensor fusion – as in the Danish BIFROST project, for example.

Satellite-based optical imagery from companies like Maxar and Planet, along with synthetic aperture radar (SAR) imagery from companies such as Capella, ICEYE, Airbus and Spacety, are already providing a wide range of game-changer capabilities. In 2022, for example, they have significantly impacted the ongoing military operations in Ukraine. They also form part of the basis for the fast-growing Open Source Intelligence (OSINT) community.

 

Danish diligence

In the new configurations made possible by such next-generation capabilities-centric narratives, even relatively small companies and small countries like Denmark can get a seat somewhere at the satellite-solutions table. Space Inventor, for example, provides a modular, scalable and customisable platform – apparently focused on avionics – for use in the research, development, manufacture and assembly of nano- and microsatellites. Here, too, the capabilities weigh heavier than the actual hardware going out the door. It’s the business model that counts.

Somewhat similarly in terms of business model, GomSpace provides standardised platforms for low-Earth orbit missions using nanosatellites for the “commercialisation of New Space”, as they claim. This company appears to position itself as an effective contract development and manufacturing organisation (CDMO).

There are also setups like GateHouse SatCom, which focuses on software for satellite communications, seeming to position itself as an enabler for telecom and (soon-to-come/soon-to-expand) IoT services and capabilities. Infrastructure is a strong strategic position, and the operation then becomes part of a broader narrative featuring more commercial opportunities.

These new kinds of narratives substantially alter the business model and the overall narrative for satellite-based operations, as well as for the companies that provide the hardware and frameworks that facilitate these. There’s no longer much meaning in just thinking engineering and techspeak. The metrics for designing, building, launching and evaluating satellites have changed, as have perspectives about their end-to-end viability, usefulness and impacts. It is likely that greater attention will (have to) be paid to environmental/planetary impacts and ESG accountability.

Net-zero rethinking?

With internationally mandated net-carbon-zero targets for 2030 and 2050 as ominous goalposts on the very-near-future horizon, metrics and expectations about accountability and responsibility seem likely to now extend into orbit and beyond, although such “fully rethunk” mindsets seem a long time coming.

If our economies are to move from the traditional/current take-make-waste business model towards a circular, lean, inclusive and clean one that is commercially as well as ethically viable, the mindsets we use about systems, processes and productivity will all have to change. Even in the technologically exotic world of satellite-based operations.