The trend in the industry is toward larger satellites, says Rickers, adding that this trend is largely driven by the high cost of launching and insuring satellites. The substantial cost associated with each launch means customers want to minimize the number of launches. Fewer launches mean the satellites have to be more capable and, as a consequence, larger.
Osamu Inoue, SPJC executive vice president and president for the business's space and satellite group, foresees that satellites will continue to get bigger. The reason is that companies such as his want to include hosted payloads on their satellites, so the cost of buying and launching satellites can be shared. He says some of SPJC's satellites include hosted payloads for Japan's military, which uses X-band. Japan's military satellite communications needs are increasing, because Japanese peace-keeping forces are being deployed further afield, adds Inoue.
The launch market could also change if SpaceX remains price-competitive, says Lockheed Martin's Rickers. If new competition in the launcher market makes launches cheaper, that could help drive demand for smaller satellites, he says. Arianespace currently accounts for a little over 50% of all satellite launches, thanks in part to its diverse service offering, including three size of launchers: Ariane 5, Soyuz and Vega. In some countries, such as Japan, Arianespace has 100% of the market. Arianespace's chairman and CEO, Jean-Yves Le Gall, says it plans to have 10 launches from French Guiana this year—seven for Ariane 5, two for Soyuz and one for Vega.
As for new competition in the launcher market, Le Gall says newcomer SpaceX still has to prove itself. He also says the U.S. government's International Traffic in Arms Regulations (ITAR) have effectively stopped China from becoming a player in the international satellite launch business. This is because ITAR restrictions prevent U.S. commercial communications satellites or U.S.-made components from being launched on Chinese rockets. Le Gall argues that even if ITAR restrictions are eased, China is unlikely to become a serious factor. “They [the Chinese] still have a lot to learn before they become a real player in the commercial market,” he says.
But adversity can be a catalyst for innovation. Thales Alenia Space, for example, built an ITAR-free satellite last year for European operator Eutelsat; this was launched into space aboard a Chinese Long March rocket.
As for the future size of satellites, Le Gall says it is difficult to predict. It depends on the capability of the launch vehicles, he says, adding that satellite manufacturers such as Lockheed Martin may be able to build larger satellites, but they will also want to continue to ensure competition continues among the launch companies. Consequently, satellite manufacturers generally ensure that their satellites weigh 6.2 tons or less, so they have the choice of using either Arianespace or Russia's International Launch Service (ILS), says Le Gall.
European governments are now debating whether to develop a new modular launch vehicle, the Ariane 6, or to press ahead with a midlife upgrade of the Ariane 5 (AW&ST May 28, 2012). Le Gall declines to comment on which option he prefers.
The manufacturers of satellites, meanwhile, face more competition. As the number of manufacturers has increased over the past 15 years, it has become harder for Lockheed Martin to maintain market share. However, the company's commercial satellite business has a backlog of two satellites, Rickers notes. One is for the U.S. government and is being built to commercial standards. The other is Jabiru-1 for Australia's NewSat.
For Lockheed Martin, one of the challenges will be ensuring AXL is cost-competitive in the commercial satellite market, while still getting an adequate return on investment from its R&D. Rickers says: “We have to be cost-competitive. We have to take cost out of the product and the programs. There is also a value aspect that we need to retain.” Lockheed Martin “has been very active in arranging financing for customers,” such as U.S. Export-Import Bank financing, he adds.
In the case of VinaSat-2, the speed with which Lockheed Martin could build and deliver was also important—the company was only given two years. The deadline was tight because Vietnam had to get its satellite into orbit by the end of June, or it would have lost its orbital position to the next applicant in line.