Space: Unable Or Unwilling


February 11, 2017: The workhorse rocket of the ESA (European Space Agency), the Ariane 5, made seven successful launches in 2016 and the last one lifted 10.6 tons (two communications satellites). That makes 76 successful launches in a row for the Ariane 5. The ESA spent ten years and $8 billion to develop Ariane 5 and is now seeking new development efforts from ESA member states (especially France and Germany, who provide nearly half the $5.8 billion annual budget) to keep competitive with low cost competitors Russia and China as well as technical breakthroughs from American firms (like SpaceX) that appear to be delivering on their goal of achieving 30 percent savings for launches. Competing with that may be difficult because new firms, non-government, firms in the business, like SpaceX, have an edge in other areas besides tech. SpaceX is achieving the 30 percent savings with unique tech (self-landing booster rocket) and more flexibility than most government (usually military) developed launchers. As a privately owned company SpaceX has less bureaucracy and is quicker to adapt new technology for launch services. Many existing and potential SpaceX customers see this as the future of space transportation. So do competing launch providers, who find they may be unable or unwilling to keep up.

Ariane 5 is considered state-of-the-art for current tech. Its theoretical maximum GTO payload is ten tons, and up to three large satellites can be put into orbit at the same, or many more small ones. Right now, communications satellites are the big money makers. The first successful launch of an Ariane 5 was in 1998, after two failed launches. Each Ariane 5 launch costs about $180 million and it has a success rate of 95 percent for the 90 launches so far. It wasn’t until 2006 that Ariane 5 started putting its max payload into orbit. That launch lifted an 8.3 ton payload, containing two satellites, into a geostationary transfer orbit (GTO). This is one of the more difficult orbits to achieve, because it is 36,000 kilometers out, and exact positioning is required in order to get the satellite to the proper position.

The 777 ton Ariane 5 is to be replaced by the Ariane 6 after 2023. The 800 ton Ariane 6 is have its first launch in 2020s. Ariane 6 cost nearly $4 billion to and will cut launch costs by over 30 percent. And will, like most European Space Agency rockets operate from the Guiana Space Center in South America (French Guiana.)

GTO birds are usually communications satellite, with each one having 18 to 24 transponders. Each transponder is capable of relaying data at speeds of from 45 to 90 Megabits per second. There are about 250 GTO based communications satellites out there. While most communications traffic these days goes by much cheaper fiber optic cables, the satellites are in demand for mobile communications. This is especially true as portable satellite dishes become smaller and cheaper. Military use of satellite communications got its first big workout during the 2003 Iraq invasion, where American troops used, on average 3,200 Megabits of bandwidth. That tied up a lot of transponders, which rent for about $2 million a month each. But most of the communications satellites are for commercial users.

While military satellites get more media attention, the real business of space, and where the Chinese put most of their efforts, is in commercial satellites. The Chinese have noted that since the 1980s space satellites have gone from big business to huge business. By 2012 there were about 1,000 active satellites in orbit, and nearly half of them were American. The number of satellites has been going down a bit since then because individual satellites last longer and can do more. It is expected that the number of satellites will now start to rise rapidly because of the popularity of mini-satellites (under 100 kg/220 pounds). Some of these mini-sats are much smaller (under ten kg) and still useful. In some cases dozens of mini-sats are put into orbit by one launcher.

About 75 percent of all satellites are non-military. Most of them are commercial, the rest government non-military birds. Since 2001 satellite industry revenues more than doubled, from $86 billion (in 2014 dollars) a year to over $200 billion now. The cost of the satellites is less than ten percent of annual satellite revenues. About four percent of the money comes from launching all those satellites and 36 percent of those launches are military. The U.S. has about a third of the launch business, mainly because of the requirement that U.S. classified satellites be launched by American rockets. About half the satellite launches (and two-thirds of the satellites) were for communications, which generates the most income (mostly for TV, followed by data). The U.S. remains the major manufacturer of commercial satellites, with over half of the market. China sees opportunity in all this and has come a long way in a short time to take advantage of it. The European Space Agency is a competitor, but a small one. The most dangerous competitor is the one that uses methods the other major operators are unable or unwilling to copy.