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Insights on Next-Gen Space Transportation: Key Trends & Future Prospects

Explore six intriguing thoughts on the future of space transportation, from satellite launches to commercial constellations and the role of government as an enabler. Discover the importance of reliability in next-generation launchers and the dynamic demand for satellite connectivity in various commercial applications. Gain insights on industry trends, market dynamics, and the evolving landscape of space programs.

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Insights on Next-Gen Space Transportation: Key Trends & Future Prospects

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  1. Prepared for Next-Generation Space Transportation: Six (Hopefully) Interesting Thoughts in 60 Seconds May 17, 2001 Lori Garver Director, Space Programs DFI International Washington, DC

  2. Thought #1: It is neither the best of times nor the worst of times Satellites are going up … Global Satellite Launches (1997-2002) Global Launches Revenues (1997-2002) … generating revenue for the industry 12000 180 Government/Civil Commercial non-GEO 160 Commercial GEO 10000 140 8000 120 100 $ millions # Satellites Launched 6000 80 4000 60 40 2000 20 0 0 1997 1998 1999 2000 2001(E) 2002(E) 1997 1998 1999 2000 2001(E) 2002(E) Source: DFI International Source: Merrill Lynch However, future dynamism in the industry is still almost entirely dependent on deployment of commercial constellations

  3. Thought #2: It is all relative LAUNCH REVENUES FROM IRIDIUM, ORBCOMM, GLOBALSTAR TERRESTRIAL FIBER DEPLOYMENT COSTS Capex To Years to Company Light (Millions) Complete $900,000,000 360 Networks $ 31,360 39 AT&T 23,296 9 Iridium Sprint 13,440 8 $630,000,000 Globalstar Worldcom 16,128 7 Qwest 39,424 25 Global Crossing 16,128 24 Genuity 19,712 41 Williams 105,728 123 Broadwing 82,432 785 Level 3 (Internal) 7,168 3 Level 3 (Dark Fiber) 152,320 76 $ 507,136 38 Over $1.5 billion for the launch industry alone Satellite is no longer the black sheep of the family Source: Level 3, DFI International Estimates

  4. Thought #3: Pioneers show us the way TELECOM GRAVEYARD ? RIP RIP DBC ? RIP Winstar RIP TERRESTRIAL ? RIP RIP SPACE RIP Aduronet ? RIP RIP … but are, in many cases, essential to the development of robust markets Industry failures are not only to be expected …

  5. Thought #4: Hey, look down, I see demand Global Network Demand (2000-2004) Key Commercial Satellite Applications Broadband Multicasting – $14 billion market by 2005 by some accounts; leverages unique one-to many ability of satellites 10000 3500 875 Digital Cinema – specific multicast application; can provide dynamic improvement in global distribution of major films 1000 175 Terabits/sec 100 Route Pioneer – providing services in emerging markets until demand warrants terrestrial buildout 17.5 10 Universal Service – providing service to those areas where market economics will never support terrestrial buildout 1.75 2000 2001 2002 2003 2004 Demand for connectivity is expected to be explosive … … and although terrestrial solutions will dominate, satellites will play a significant role Source: RHK, DFI International Estimates

  6. Thought #5: Next-gen launchers need to be three things … reliable, reliable, and more reliable Not only is reliability the key decision criteria for satellite operators … … but increasing reliability is also the easiest way to reduce cost to orbit – by continuing to drive down insurance premiums “The five leading factors that we consider in selecting launch vehicles are reliability, reliability, reliability, reliability, and reliability” -- Commercial satellite manufacturing executive Satellite Launch Insurance Premiums (1989-1999) “[We are] willing to trade price for other factors such as reliability” -- Commercial LEO constellation executive “Reliability is of the utmost importance … a launcher must have a proven track record” -- Commercial LEO constellation executive “Reliability is too important to trade off … [but] capacity could be sacrificed” -- International Space Agency Program Director Source: JH Marsh & McLennan

  7. Thought #6: Government can be a successful enabler The Interstate Highway System cost $329 billion… … resulting in $1 trillion in economic cost savings

  8. Conclusions NASA should focus on its core mission… • Space transportation remains an exciting industry with steady growth • Pioneering projects are, by definition, costly and time consuming • Satellites are increasingly viewed as a key component of global telecommunications infrastructure • Shakeouts in the satellite and launch markets, like in terrestrial telecom markets, lead to a “flight to quality” • Government has a key role as enabler

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