Northern Sky Research

My Satcom is better than your Satcom: Milsat vs. Comsat

Nov 11th, 2014 by Carolyn Belle   More from this Analyst | Profile

“Anything you can do I can do better, I can do anything better than you”  is the new refrain – or at least the sentiment behind it – in the sphere of military satellite communications. The back and forth between proponents of Milsat and Comsat has come to a head in the last months, starting with the release of the U.S. DOD’s “Satellite Communications Strategy Report”, followed by industry leaders’ responses at a DC roundtable, and finally during Global Milsatcom 2014 in London last week. As this debate continues to unfold from words to action, what will be the outcome of this new round of tit and tat?

Framing this discussion is the reality that Milsat supply is on an upward trend not just in the U.S., but in Europe and other places around the globe as well. As is clear from the chart below, ongoing launches of next generation systems are expected to bring upwards of 40 Gbps of capacity into orbit by 2020 with roughly 31 Gbps provided by the U.S. WGS system alone. This means that governments and militaries are more capable of addressing their own demand than ever before, to the detriment of commercial providers. In 2014, the push to utilize proprietary assets to capitalize on investments has only intensified.

Nonetheless, demand from many countries will exceed available proprietary supply and force nations to turn to international partnerships or commercial leases. Notably, commercial capacity for UAVs and managed services, as well as ad hoc surge demand, will remain important. To fully take advantage of these opportunities, industry must resolve how to tailor their offerings to military requirements – starting with efforts on prices and security.

The U.S. DOD has argued that commercial capacity pricing is as much as four times more expensive than proprietary capacity – a statement essentially affirmed by international partners during Global Milsatcom. With the exception of Boeing, commercial operators and service providers remain unwavering in the claim that commercial capacity can be on par with, or less expensive, than proprietary capacity. Yet the comparison cannot be direct given that current procurement practices favor relatively more expensive ≤1 year leases, and that the military may not fully account for TCO of proprietary capacity on a per MHz level – leaving both sides without a comprehensive understanding of comparative costs. Be that as it may, government budgets will remain a limitation and both sides must find ways to make commercial capacity a financially sustainable solution to meet growing capacity demand.

An artifact of the 2013-2014 budgetary declines and ongoing limitations is a do more with less mentality for re-competed and new contracts. The many HTS constellations coming into service in 2015-2016 will offer militaries a lower cost/higher throughput solution to address demand, and should see gradually increasing take-up as field tests prove successful. For operators and service providers leveraging traditional FSS capacity, however, do more with less might simply mean lower margins. Yet it must be acknowledged that, for full efficacy, there will be pressure to expand this beyond a one sided expectation levied on commercial players – and there is real room to modernize government procurement practices to preserve precious government dollars and allow long-term commitments. Case in point, the U.S. Air Force’s first Pathfinder contract with SES will provide Ku-band capacity to AFRICOM for 5 years at a lower cost than traditional contracts, and five more Pathfinders are planned to explore other novel ways of working with industry. 

Setting cost of services aside, the level of protected comms was a second concern emphasized during Global Milsatcom. The military and industry are working to extend anti-jam capabilities of commercial wideband systems – such as through the U.S. Air Force SMC’s Protected Tactical Waveform – but the cost of modem upgrades could draw out implementation times. For users desiring protected comms and unable to rely on proprietary systems, X-band and military Ka-band commercial capacity are becoming an appealing alternative. Further, interoperability of commercial X- and Ka-band satellites with proprietary systems will contribute to increasing take-up of these frequencies over the next decade.

Hybrid and multiband antenna solutions are becoming important, allowing military users to switch between military Ka-band and commercial Ka-band, or even more broadly from Ku- to X- or Ka-band, without a second terminal. For some equipment suppliers, up to a third of the terminals sold to government and military customers are already multiband, but this will increase moving forward. Notably, O3b has joined this contingent and is working with equipment manufacturers to address demand for hybrid solutions. 

Bottom Line

With more proprietary capacity available, preferential reliance on internal assets will increase and consequently curb procurement from commercial vendors. But inevitably, and despite ongoing arguments on cost, performance, and security, this market will continue to feature a mixture of commercial and proprietary capacity. As such, the debate will evolve from “who can do it better” to more “how can both sides collaborate and leverage their strengths to address demand.”