Northern Sky Research

Grounding Smallsat Expansion

Nov 9th, 2016 by Carolyn Belle   More from this Analyst | Profile

Suitable launch access has long been a concern for smallsat operators, a challenge intensified since 2014 due to a series of launch failures and delayed manifests. India’s announcement last month of an 83-satellite PSLV launch planned for early 2017, its largest yet, highlighted once again the growing demand for a route to orbit. Despite efforts at facilitating higher volume launch opportunities, the market-wide launch bottleneck will not be alleviated in the near term – obstructing market development and opening the door to market contraction.

Pinching Demand

Interest in smallsats continues to outpace opportunities to launch, leading to long waiting lists for slots or an inability to reach the desired orbit. Diverse technology development missions and budding commercial constellations have been left wanting.

Delays in space-testing new platforms, components, and operations reduces the availability of advanced capability technologies. Such technologies include those that might improve current applications (e.g. a higher resolution camera) or enable entirely new applications and sub-markets (e.g. formation flying). The longer today’s budding companies wait for launches and postpone the start of full operations, the more challenging it becomes to deliver a compelling customer experience, convince new industries to rely on novel satellite services, and maintain cashflow following a capital-intensive build phase. The potential failure by an early market entrant due to an inability to deploy all satellites on schedule could reverberate across the industry, frustrating future funding efforts and leading to a market contraction.

Until the launch access challenge is resolved, market exits will commence, enthusiasm for new smallsat based ventures will falter, and new players will not as readily emerge to fill the vacuums.


Evolving Solutions

NSR’s Small Satellite Markets, 3rd Edition found that even with evolving launch practices and solutions, the launch bottleneck will not be alleviated until the early 2020s. While the market has been primarily served by opportunistic rideshare and ISS resupply missions, launch type distribution will diversify in coming years to include a growing share of dedicated and dedicated rideshare missions leading to a  nearly four-fold increase in the 5-year launch rate between 2021-2025 compared to 2011-2015.

The growth by type of launches will unfold as follows:

  1. Cargo launches will generate a fairly consistent share of launch opportunities. ISS will continue to benefit from Dragon, Cygnus, and HTV upmass, with higher upmass allocations after the more capable DreamChaser becomes operational in 2019/2020. Plans to install a commercial airlock will also increase annual deployment capacity. Yet Cargo will remain a less attractive launch option for the low, fixed orbit, schedule constraints, and human-rated environment requirements.
  1. As records for successful rideshare missions have grown, the initial hesitancy of primary payload owners to support a secondary payload(s) has abated. Likewise, launch providers are implementing best practices and new deployment systems to support rideshare customers. However, rollout of new solutions takes time and global launch rates are not increasing – the recent Falcon 9 anomaly impact highlighting the fragile state of this type of ride – meaning the incremental capacity per launch will only support a limited augmentation of smallsat rideshare opportunities.
  1. Cost and scale have restricted dedicated rideshare missions thus far to a few Dnepr and Antares launches. New vehicles will also serve this market once available, as evidenced by the three VCLS contracts NASA awarded to Rocket Lab, Virgin Galactic, and Firefly in 2015. Yet it is the expanded use of current vehicles for high volume, dedicated rideshare – such as the Falcon 9 mission next year – that presents the best near-term opportunity for higher launch availability.
  1. More than three dozen smallsat launch vehicles are in development, aiming to provide a tailored service for operators seeking to control the orbit and schedule of launch services.  Should even a few of these launch, launch flexibility for smallsat operators could exponentially improve. NSR has noted the myriad challenges along the route to successful operations of a new vehicle, and many endeavors will fail along the way.


Bottom Line

The smallsat launch bottleneck has no near-term solution in sight. Expanded opportunities for rideshare and dedicated rideshare, with added solutions for dedicated launches, will alleviate this restraint by the 2020s. Until then, limited launch access will continue to restrain market expansion. First, by preventing existing players from putting new satellites in orbit. Second, by hindering the success of early smallsat ventures that is required to prove the concept and prompt engagement from new players and investors. The question, therefore, is: will better launch opportunities arrive in time to prevent market contraction?