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Monday, May 10, 2021

Satellite Internet access

From Wikipedia, the free encyclopedia
 
Satellite Internet
Satellite Internet Characteristics
MediumAir or Vacuum
LicenseITU
Maximum downlink rate1000 Gbit/s
Maximum uplink rate1000 Mbit/s
Average downlink rate1 Mbit/s
Average uplink rate256 kbit/s
LatencyAverage 638 ms
Frequency bandsL, C, Ku, Ka
Coverage100–6,000 km
Additional servicesVoIP, SDTV, HDTV, VOD, Datacast
Average CPE price€300 (modem + satellite dish)

Satellite Internet access is Internet access provided through communication satellites. Modern consumer grade satellite Internet service is typically provided to individual users through geostationary satellites that can offer relatively high data speeds, with newer satellites using Ku band to achieve downstream data speeds up to 506 Mbit/s. In addition, new satellite internet constellations are being developed in low-earth orbit to enable low-latency internet access from space.

History of satellite Internet

Following the launch of the first satellite, Sputnik 1, by the Soviet Union in October 1957, the US successfully launched the Explorer 1 satellite in 1958. The first commercial communications satellite was Telstar 1, built by Bell Labs and launched in July 1962.

The idea of a geosynchronous satellite—one that could orbit the Earth above the equator and remain fixed by following the Earth's rotation—was first proposed by Herman Potočnik in 1928 and popularised by the science fiction author Arthur C. Clarke in a paper in Wireless World in 1945. The first satellite to successfully reach geostationary orbit was Syncom3, built by Hughes Aircraft for NASA and launched on August 19, 1963. Succeeding generations of communications satellites featuring larger capacities and improved performance characteristics were adopted for use in television delivery, military applications and telecommunications purposes. Following the invention of the Internet and the World Wide Web, geostationary satellites attracted interest as a potential means of providing Internet access.

A significant enabler of satellite-delivered Internet has been the opening up of the Ka band for satellites. In December 1993, Hughes Aircraft Co. filed with the Federal Communications Commission for a license to launch the first Ka-band satellite, Spaceway. In 1995, the FCC issued a call for more Ka-band satellite applications, attracting applications from 15 companies. Among those were EchoStar, Lockheed Martin, GE-Americom, Motorola and KaStar Satellite, which later became WildBlue.

Among prominent aspirants in the early-stage satellite Internet sector was Teledesic, an ambitious and ultimately failed project funded in part by Microsoft that ended up costing more than $9 billion. Teledesic's idea was to create a broadband satellite constellation of hundreds of low-orbiting satellites in the Ka-band frequency, providing inexpensive Internet access with download speeds of up to 720 Mbit/s. The project was abandoned in 2003. Teledesic's failure, coupled with the bankruptcy filings of the satellite communications providers Iridium Communications Inc. and Globalstar, dampened marketplace enthusiasm for satellite Internet development. It wasn't until September 2003 when the first Internet-ready satellite for consumers was launched by Eutelsat.

In 2004, with the launch of Anik F2, the first high throughput satellite, a class of next-generation satellites providing improved capacity and bandwidth became operational. More recently, high throughput satellites such as ViaSat's ViaSat-1 satellite in 2011 and HughesNet's Jupiter in 2012 have achieved further improvements, elevating downstream data rates from 1–3 Mbit/s up to 12–15Mbit/s and beyond. Internet access services tied to these satellites are targeted largely to rural residents as an alternative to Internet service via dial-up, ADSL or classic FSSes.

In 2013 the first four satellites of the O3b constellation were launched into medium Earth orbit (MEO) to provide internet access to the "other three billion" people without stable internet access at that time. Over the next six years, 16 further satellites joined the constellation, now owned and operated by SES.

Since 2014, a rising number of companies announced working on internet access using satellite constellations in low Earth orbit. SpaceX, OneWeb and Amazon all plan to launch more than 1000 satellites each. OneWeb alone raised $1.7 billion by February 2017 for the project, and SpaceX raised over one billion in the first half of 2019 alone for their service called Starlink and expected more than $30 billion in revenue by 2025 from its satellite constellation. Many planned constellations employ laser communication for inter-satellite links to effectively create a space-based internet backbone.

In September 2017, SES announced the next generation of O3b satellites and service, named O3b mPOWER. The constellation of 11 MEO satellites will deliver 10 terabits of capacity globally through 30,000 spot beams for broadband internet services. The first three O3b mPOWER satellites are scheduled to launch in Q3 2021.

As of 2017, airlines such as Delta and American have been introducing satellite internet as a means of combating limited bandwidth on airplanes and offering passengers usable internet speeds.

WildBlue satellite Internet dish on the side of a house

Companies and market

United States

CTVforme providing home internet service in the United States of America include ViaSat, through its Exede brand, EchoStar, through subsidiary HughesNet, and Starlink.

United Kingdom

In the United Kingdom, companies providing satellite Internet access include Bigblu, Broadband Everywhere and Freedomsat.

Function

Satellite Internet generally relies on three primary components: a satellite - historically in geostationary orbit (or GEO) but now increasingly in Low Earth orbit (LEO) or Medium Earth orbit MEO) - a number of ground stations known as gateways that relay Internet data to and from the satellite via radio waves (microwave), and further ground stations to serve each subscriber, with a small antenna and transceiver. Other components of a satellite Internet system include a modem at the user end which links the user's network with the transceiver, and a centralized network operations centre (NOC) for monitoring the entire system. Working in concert with a broadband gateway, the satellite operates a Star network topology where all network communication passes through the network's hub processor, which is at the centre of the star. With this configuration, the number of ground stations that can be connected to the hub is virtually limitless.

Satellite

Marketed as the centre of the new broadband satellite networks are a new generation of high-powered GEO satellites positioned 35,786 kilometres (22,236 mi) above the equator, operating in Ka-band (18.3–30 GHz) mode. These new purpose-built satellites are designed and optimized for broadband applications, employing many narrow spot beams, which target a much smaller area than the broad beams used by earlier communication satellites. This spot beam technology allows satellites to reuse assigned bandwidth multiple times which can enable them to achieve much higher overall capacity than conventional broad beam satellites. The spot beams can also increase performance and consequential capacity by focusing more power and increased receiver sensitivity into defined concentrated areas. Spot beams are designated as one of two types: subscriber spot beams, which transmit to and from the subscriber-side terminal, and gateway spot beams, which transmit to/from a service provider ground station. Note that moving off the tight footprint of a spotbeam can degrade performance significantly. Also, spotbeams can make the use of other significant new technologies impossible, including 'Carrier in Carrier' modulation.

In conjunction with the satellite's spot-beam technology, a bent-pipe architecture has traditionally been employed in the network in which the satellite functions as a bridge in space, connecting two communication points on the ground. The term "bent-pipe" is used to describe the shape of the data path between sending and receiving antennas, with the satellite positioned at the point of the bend. Simply put, the satellite's role in this network arrangement is to relay signals from the end user's terminal to the ISP's gateways, and back again without processing the signal at the satellite. The satellite receives, amplifies, and redirects a carrier on a specific radio frequency through a signal path called a transponder.

Some proposed satellite constellations in LEO such as Starlink and Telesat will employ laser communication equipment for high-throughput optical inter-satellite links. The interconnected satellites allow for direct routing of user data from satellite to satellite and effectively create a space-based optical mesh network that will enable seamless network management and continuity of service.

The satellite has its own set of antennas to receive communication signals from Earth and to transmit signals to their target location. These antennas and transponders are part of the satellite's "payload", which is designed to receive and transmit signals to and from various places on Earth. What enables this transmission and reception in the payload transponders is a repeater subsystem (RF (radio frequency) equipment) used to change frequencies, filter, separate, amplify and group signals before routing them to their destination address on Earth. The satellite's high-gain receiving antenna passes the transmitted data to the transponder which filters, translates and amplifies them, then redirects them to the transmitting antenna on board. The signal is then routed to a specific ground location through a channel known as a carrier. Beside the payload, the other main component of a communications satellite is called the bus, which comprises all equipment required to move the satellite into position, supply power, regulate equipment temperatures, provide health and tracking information, and perform numerous other operational tasks.

Gateways

Along with dramatic advances in satellite technology over the past decade, ground equipment has similarly evolved, benefiting from higher levels of integration and increasing processing power, expanding both capacity and performance boundaries. The Gateway—or Gateway Earth Station (its full name)—is also referred to as a ground station, teleport or hub. The term is sometimes used to describe just the antenna dish portion, or it can refer to the complete system with all associated components. In short, the gateway receives radio wave signals from the satellite on the last leg of the return or upstream payload, carrying the request originating from the end-user's site. The satellite modem at the gateway location demodulates the incoming signal from the outdoor antenna into IP packets and sends the packets to the local network. Access server/gateways manage traffic transported to/from the Internet. Once the initial request has been processed by the gateway's servers, sent to and returned from the Internet, the requested information is sent back as a forward or downstream payload to the end-user via the satellite, which directs the signal to the subscriber terminal. Each Gateway provides the connection to the Internet backbone for the gateway beam(s) it serves. The system of gateways comprising the satellite ground system provides all network services for satellite and corresponding terrestrial connectivity. Each gateway provides a multiservice access network for subscriber terminal connections to the Internet. In the continental United States, because it is north of the equator, all gateway and subscriber dish antenna must have an unobstructed view of the southern sky. Because of the satellite's geostationary orbit, the gateway antenna can stay pointed at a fixed position.

Antenna dish and modem

For the customer-provided equipment (i.e. PC and router) to access the broadband satellite network, the customer must have additional physical components installed:

Outdoor unit (ODU)

At the far end of the outdoor unit is typically a small (2–3-foot, 60–90 cm diameter), reflective dish-type radio antenna. The VSAT antenna must also have an unobstructed view of the sky to allow for proper line-of-sight (L-O-S) to the satellite. There are four physical characteristic settings used to ensure that the antenna is configured correctly at the satellite, which are: azimuth, elevation, polarization, and skew. The combination of these settings gives the outdoor unit a L-O-S to the chosen satellite and makes data transmission possible. These parameters are generally set at the time the equipment is installed, along with a beam assignment (Ka-band only); these steps must all be taken prior to the actual activation of service. Transmit and receive components are typically mounted at the focal point of the antenna which receives/sends data from/to the satellite. The main parts are:

  • Feed – This assembly is part of the VSAT receive and transmit chain, which consists of several components with different functions, including the feed horn at the front of the unit, which resembles a funnel and has the task of focusing the satellite microwave signals across the surface of the dish reflector. The feed horn both receives signals reflected off the dish's surface and transmits outbound signals back to the satellite.
  • Block upconverter (BUC) – This unit sits behind the feed horn and may be part of the same unit, but a larger (higher wattage) BUC could be a separate piece attached to the base of the antenna. Its job is to convert the signal from the modem to a higher frequency and amplify it before it is reflected off the dish and towards the satellite.
  • Low-noise block downconverter (LNB) – This is the receiving element of the terminal. The LNB's job is to amplify the received satellite radio signal bouncing off the dish and filter out the noise, which is any signal not carrying valid information. The LNB passes the amplified, filtered signal to the satellite modem at the user's location.

Indoor unit (IDU)

The satellite modem serves as an interface between the outdoor unit and customer-provided equipment (i.e. PC, router) and controls satellite transmission and reception. From the sending device (computer, router, etc.) it receives an input bitstream and converts or modulates it into radio waves, reversing that order for incoming transmissions, which is called demodulation. It provides two types of connectivity:

  • Coaxial cable (COAX) connectivity to the satellite antenna. The cable carrying electromagnetic satellite signals between the modem and the antenna generally is limited to be no more than 150 feet in length.
  • Ethernet connectivity to the computer, carrying the customer's data packets to and from the Internet content servers.

Consumer grade satellite modems typically employ either the DOCSIS or WiMAX telecommunication standard to communicate with the assigned gateway.

Challenges and limitations

Signal latency

Latency (commonly referred to as "ping time") is the delay between requesting data and the receipt of a response, or in the case of one-way communication, between the actual moment of a signal's broadcast and the time it is received at its destination.

A radio signal takes about 120 milliseconds to reach a geostationary satellite and then 120 milliseconds to reach the ground station, so nearly 1/4 of a second overall. Typically, during perfect conditions, the physics involved in satellite communications account for approximately 550 milliseconds of latency round-trip time.

The longer latency is the primary difference between a standard terrestrial-based network and a geostationary satellite-based network. The round-trip latency of a geostationary satellite communications network can be more than 12 times that of a terrestrial based network.

Geostationary orbits

A geostationary orbit (or geostationary Earth orbit/GEO) is a geosynchronous orbit directly above the Earth's equator (0° latitude), with a period equal to the Earth's rotational period and an orbital eccentricity of approximately zero (i.e. a "circular orbit"). An object in a geostationary orbit appears motionless, at a fixed position in the sky, to ground observers. Launchers often place communications satellites and weather satellites in geostationary orbits, so that the satellite antennas that communicate with them do not have to move to track them, but can point permanently at the position in the sky where the satellites stay. Due to the constant 0° latitude and circularity of geostationary orbits, satellites in GEO differ in location by longitude only.

Compared to ground-based communication, all geostationary satellite communications experience higher latency due to the signal having to travel 35,786 km (22,236 mi) to a satellite in geostationary orbit and back to Earth again. Even at the speed of light (about 300,000 km/s or 186,000 miles per second), this delay can appear significant. If all other signaling delays could be eliminated, it still takes a radio signal about 250 milliseconds (ms), or about a quarter of a second, to travel to the satellite and back to the ground. The absolute minimum total amount of delay varies, due to the satellite staying in one place in the sky, while ground-based users can be directly below (with a roundtrip latency of 239.6 ms), or far to the side of the planet near the horizon (with a roundtrip latency of 279.0 ms).

For an Internet packet, that delay is doubled before a reply is received. That is the theoretical minimum. Factoring in other normal delays from network sources gives a typical one-way connection latency of 500–700 ms from the user to the ISP, or about 1,000–1,400 ms latency for the total round-trip time (RTT) back to the user. This is more than most dial-up users experience at typically 150–200 ms total latency, and much higher than the typical 15–40 ms latency experienced by users of other high-speed Internet services, such as cable or VDSL.

For geostationary satellites, there is no way to eliminate latency, but the problem can be somewhat mitigated in Internet communications with TCP acceleration features that shorten the apparent round trip time (RTT) per packet by splitting ("spoofing") the feedback loop between the sender and the receiver. Certain acceleration features are often present in recent technology developments embedded in satellite Internet equipment.

Latency also impacts the initiation of secure Internet connections such as SSL which require the exchange of numerous pieces of data between web server and web client. Although these pieces of data are small, the multiple round-trips involved in the handshake produce long delays compared to other forms of Internet connectivity, as documented by Stephen T. Cobb in a 2011 report published by the Rural Mobile and Broadband Alliance. This annoyance extends to entering and editing data using some Software as a Service or SaaS applications as well as in other forms of online work.

One should thoroughly test the functionality of live interactive access to a distant computer—such as virtual private networks. Many TCP protocols were not designed to work in high-latency environments.

Medium and Low Earth Orbits

Medium Earth orbit (MEO) and low Earth orbit (LEO) satellite constellations do not have such great delays, as the satellites are closer to the ground. For example:

  • The current LEO constellations of Globalstar and Iridium satellites have delays of less than 40 ms round trip, but their throughput is less than broadband at 64 kbit/s per channel. The Globalstar constellation orbits 1,420 km above the Earth and Iridium orbits at 670 km altitude.
  • The O3b MEO constellation orbits at 8,062 km, with RTT latency of approximately 125 ms. The network is also designed for much higher throughput with links well in excess of 1 Gbit/s (Gigabits per second). The forthcoming O3b mPOWER constellation shares the same orbit and will deliver from 50Mbps to multiple gigabits per second to a single user.

Unlike geostationary satellites, LEO and MEO satellites do not stay in a fixed position in the sky and from a lower altitude they can "see" a smaller area of the Earth, and so continuous widespread access requires a constellation of many satellites (low-Earth orbits needing more satellites than medium-Earth orbits) with complex constellation management to switch data transfer between satellites and keep the connection to a customer, and tracking by the ground stations.

MEO satellites require higher power transmissions than LEO to achieve the same signal strength at the ground station but their higher altitude also provides less orbital overcrowding, and their slower orbit speed reduces both Doppler shift and the size and complexity of the constellation required.

Tracking of the moving satellites is usually undertaken in one of three ways, using:

  • more diffuse or completely omnidirectional ground antennas capable of communicating with one or more satellites visible in the sky at the same time, but at significantly higher transmit power than fixed geostationary dish antennas (due to the lower gain), and with much poorer signal-to-noise ratios for receiving the signal
  • motorized antenna mounts with high-gain, narrow beam antennas tracking individual satellites
  • phased array antennas that can steer the beam electronically, together with software that can predict the path of each satellite in the constellation

Ultralight atmospheric aircraft as satellites

A proposed alternative to relay satellites is a special-purpose solar-powered ultralight aircraft, which would fly along a circular path above a fixed ground location, operating under autonomous computer control at a height of approximately 20,000 meters.

For example, the United States Defense Advanced Research Projects Agency Vulture project envisaged an ultralight aircraft capable of station-keeping over a fixed area for a period of up to five years, and able to provide both continuous surveillance to ground assets as well as to service extremely low-latency communications networks. This project was cancelled in 2012 before it became operational.

Onboard batteries would charge during daylight hours through solar panels covering the wings, and would provide power to the plane during night. Ground-based satellite internet dishes would relay signals to and from the aircraft, resulting in a greatly reduced round-trip signal latency of only 0.25 milliseconds. The planes could potentially run for long periods without refueling. Several such schemes involving various types of aircraft have been proposed in the past.

Interference

A foldable Bigpond satellite Internet dish

Satellite communications are affected by moisture and various forms of precipitation (such as rain or snow) in the signal path between end users or ground stations and the satellite being utilized. This interference with the signal is known as rain fade. The effects are less pronounced on the lower frequency 'L' and 'C' bands, but can become quite severe on the higher frequency 'Ku' and 'Ka' band. For satellite Internet services in tropical areas with heavy rain, use of the C band (4/6 GHz) with a circular polarisation satellite is popular. Satellite communications on the Ka band (19/29 GHz) can use special techniques such as large rain margins, adaptive uplink power control and reduced bit rates during precipitation.

Rain margins are the extra communication link requirements needed to account for signal degradations due to moisture and precipitation, and are of acute importance on all systems operating at frequencies over 10 GHz.

The amount of time during which service is lost can be reduced by increasing the size of the satellite communication dish so as to gather more of the satellite signal on the downlink and also to provide a stronger signal on the uplink. In other words, increasing antenna gain through the use of a larger parabolic reflector is one way of increasing the overall channel gain and, consequently, the signal-to-noise (S/N) ratio, which allows for greater signal loss due to rain fade without the S/N ratio dropping below its minimum threshold for successful communication.

Modern consumer-grade dish antennas tend to be fairly small, which reduces the rain margin or increases the required satellite downlink power and cost. However, it is often more economical to build a more expensive satellite and smaller, less expensive consumer antennas than to increase the consumer antenna size to reduce the satellite cost.

Large commercial dishes of 3.7 m to 13 m diameter can be used to achieve increased rain margins and also to reduce the cost per bit by allowing for more efficient modulation codes. Alternately, larger aperture antennae can require less power from the satellite to achieve acceptable performance. Satellites typically use photovoltaic solar power, so there is no expense for the energy itself, but a more powerful satellite will require larger, more powerful solar panels and electronics, often including a larger transmitting antenna. The larger satellite components not only increase materials costs but also increase the weight of the satellite, and in general, the cost to launch a satellite into an orbit is directly proportional to its weight. (In addition, since satellite launch vehicles [i.e. rockets] have specific payload size limits, making parts of the satellite larger may require either more complex folding mechanisms for parts of the satellite like solar panels and high-gain antennas, or upgrading to a more expensive launch vehicle that can handle a larger payload.)

Modulated carriers can be dynamically altered in response to rain problems or other link impairments using a process called adaptive coding and modulation, or "ACM". ACM allows the bit rates to be increased substantially during normal clear sky conditions, increasing the number of bits per Hz transmitted, and thus reducing overall cost per bit. Adaptive coding requires some sort of a return or feedback channel which can be via any available means, satellite or terrestrial.

Line of sight

Fresnel zone. D is the distance between the transmitter and the receiver, r is the radius of the Fresnel zone.

Two objects are said to be within line of sight if a straight line between the objects can be connected without any interference, such as a mountain. An object beyond the horizon is below the line of sight and, therefore, can be difficult to communicate with.

Typically a completely clear line of sight between the dish and the satellite is required for the system to work optimally. In addition to the signal being susceptible to absorption and scattering by moisture, the signal is similarly impacted by the presence of trees and other vegetation in the path of the signal. As the radio frequency decreases, to below 900 MHz, penetration through vegetation increases, but most satellite communications operate above 2 GHz making them sensitive to even minor obstructions such as tree foliage. A dish installation in the winter must factor in plant foliage growth that will appear in the spring and summer.

Fresnel zone

Even if there is a direct line of sight between the transmitting and receiving antenna, reflections from objects near the path of the signal can decrease apparent signal power through phase cancellations. Whether and how much signal is lost from a reflection is determined by the location of the object in the Fresnel zone of the antennas.

Two-way satellite-only communication

The back panel of a satellite modem, with coaxial connections for both incoming and outgoing signals, and an Ethernet port for connection

Home or consumer grade two-way satellite Internet service involves both sending and receiving data from a remote very-small-aperture terminal (VSAT) via satellite to a hub telecommunications port (teleport), which then relays data via the terrestrial Internet. The satellite dish at each location must be precisely pointed to avoid interference with other satellites. At each VSAT site the uplink frequency, bit rate and power must be accurately set, under control of the service provider hub.

There are several types of two way satellite Internet services, including time division multiple access (TDMA) and single channel per carrier (SCPC). Two-way systems can be simple VSAT terminals with a 60–100 cm dish and output power of only a few watts intended for consumers and small business or larger systems which provide more bandwidth. Such systems are frequently marketed as "satellite broadband" and can cost two to three times as much per month as land-based systems such as ADSL. The modems required for this service are often proprietary, but some are compatible with several different providers. They are also expensive, costing in the range of US$600 to $2000.

The two-way "iLNB" used on the SES Broadband.

The two-way "iLNB" used on the SES Broadband terminal dish has a transmitter and single-polarity receive LNB, both operating in the Ku band. Pricing for SES Broadband modems range from €299 to €350. These types of system are generally unsuitable for use on moving vehicles, although some dishes may be fitted to an automatic pan and tilt mechanism to continuously re-align the dish—but these are more expensive. The technology for SES Broadband was delivered by a Belgian company called Newtec.

Bandwidth

Consumer satellite Internet customers range from individual home users with one PC to large remote business sites with several hundred PCs.

Home users tend to use shared satellite capacity to reduce the cost, while still allowing high peak bit rates when congestion is absent. There are usually restrictive time-based bandwidth allowances so that each user gets their fair share, according to their payment. When a user exceeds their allowance, the company may slow down their access, deprioritise their traffic or charge for the excess bandwidth used. For consumer satellite Internet, the allowance can typically range from 200 MB per day to 25 GB per month. A shared download carrier may have a bit rate of 1 to 40 Mbit/s and be shared by up to 100 to 4,000 end users.

The uplink direction for shared user customers is normally time division multiple access (TDMA), which involves transmitting occasional short packet bursts in between other users (similar to how a cellular phone shares a cell tower).

Each remote location may also be equipped with a telephone modem; the connections for this are as with a conventional dial-up ISP. Two-way satellite systems may sometimes use the modem channel in both directions for data where latency is more important than bandwidth, reserving the satellite channel for download data where bandwidth is more important than latency, such as for file transfers.

In 2006, the European Commission sponsored the UNIC Project which aimed to develop an end-to-end scientific test bed for the distribution of new broadband interactive TV-centric services delivered over low-cost two-way satellite to actual end-users in the home. The UNIC architecture employs DVB-S2 standard for downlink and DVB-RCS standard for uplink.

Normal VSAT dishes (1.2–2.4 m diameter) are widely used for VoIP phone services. A voice call is sent by means of packets via the satellite and Internet. Using coding and compression techniques the bit rate needed per call is only 10.8 kbit/s each way.

Portable satellite Internet

Portable satellite modem

Portable Satellite Internet Modem and Antenna deployed with the Red Cross in South Sudan.

These usually come in the shape of a self-contained flat rectangular box that needs to be pointed in the general direction of the satellite—unlike VSAT the alignment need not be very precise and the modems have built in signal strength meters to help the user align the device properly. The modems have commonly used connectors such as Ethernet or Universal Serial Bus (USB). Some also have an integrated Bluetooth transceiver and double as a satellite phone. The modems also tend to have their own batteries so they can be connected to a laptop without draining its battery. The most common such system is INMARSAT's BGAN—these terminals are about the size of a briefcase and have near-symmetric connection speeds of around 350–500 kbit/s. Smaller modems exist like those offered by Thuraya but only connect at 444 kbit/s in a limited coverage area. INMARSAT now offer the IsatHub, a paperback book sized satellite modem working in conjunction with the users mobile phone and other devices. The cost has been reduced to $3 per MB and the device itself is on sale for about $1300.

Using such a modem is extremely expensive—data transfer costs between $5 and $7 per megabyte. The modems themselves are also expensive, usually costing between $1,000 and $5,000.

Internet via satellite phone

For many years satellite phones have been able to connect to the Internet. Bandwidth varies from about 2400 bit/s for Iridium network satellites and ACeS based phones to 15 kbit/s upstream and 60 kbit/s downstream for Thuraya handsets. Globalstar also provides Internet access at 9600 bit/s—like Iridium and ACeS a dial-up connection is required and is billed per minute, however both Globalstar and Iridium are planning to launch new satellites offering always-on data services at higher rates. With Thuraya phones the 9,600 bit/s dial-up connection is also possible, the 60 kbit/s service is always-on and the user is billed for data transferred (about $5 per megabyte). The phones can be connected to a laptop or other computer using a USB or RS-232 interface. Due to the low bandwidths involved it is extremely slow to browse the web with such a connection, but useful for sending email, Secure Shell data and using other low-bandwidth protocols. Since satellite phones tend to have omnidirectional antennas no alignment is required as long as there is a line of sight between the phone and the satellite.

One-way receive, with terrestrial transmit

One-way terrestrial return satellite Internet systems are used with conventional dial-up Internet access, with outbound (upstream) data traveling through a telephone modem, but downstream data sent via satellite at a higher rate. In the U.S., an FCC license is required for the uplink station only; no license is required for the users.

Another type of 1-way satellite Internet system uses General Packet Radio Service (GPRS) for the back-channel. Using standard GPRS or Enhanced Data Rates for GSM Evolution (EDGE), costs are reduced for higher effective rates if the upload volume is very low, and also because this service is not per-time charged, but charged by volume uploaded. GPRS as return improves mobility when the service is provided by a satellite that transmits in the field of 100-200 kW. Using a 33 cm wide satellite dish, a notebook and a normal GPRS equipped GSM phone, users can get mobile satellite broadband.

System components

The transmitting station has two components, consisting of a high speed Internet connection to serve many customers at once, and the satellite uplink to broadcast requested data to the customers. The ISP's routers connect to proxy servers which can enforce quality of service (QoS) bandwidth limits and guarantees for each customer's traffic.

Often, nonstandard IP stacks are used to address the latency and asymmetry problems of the satellite connection. As with one-way receive systems, data sent over the satellite link is generally also encrypted, as otherwise it would be accessible to anyone with a satellite receiver.

Many IP-over-satellite implementations use paired proxy servers at both endpoints so that certain communications between clients and servers need not to accept the latency inherent in a satellite connection. For similar reasons, there exist special Virtual private network (VPN) implementations designed for use over satellite links because standard VPN software cannot handle the long packet travel times.

Upload speeds are limited by the user's dial-up modem, while download speeds can be very fast compared to dial-up, using the modem only as the control channel for packet acknowledgement.

Latency is still high, although lower than full two-way geostationary satellite Internet, since only half of the data path is via satellite, the other half being via the terrestrial channel.

One-way broadcast, receive only

One-way broadcast satellite Internet systems are used for Internet Protocol (IP) broadcast-based data, audio and video distribution. In the U.S., a Federal Communications Commission (FCC) license is required only for the uplink station and no license is required for users. Note that most Internet protocols will not work correctly over one-way access, since they require a return channel. However, Internet content such as web pages can still be distributed over a one-way system by "pushing" them out to local storage at end user sites, though full interactivity is not possible. This is much like TV or radio content which offers little user interface.

The broadcast mechanism may include compression and error correction to help ensure the one-way broadcast is properly received. The data may also be rebroadcast periodically, so that receivers that did not previously succeed will have additional chances to try downloading again.

The data may also be encrypted, so that while anyone can receive the data, only certain destinations are able to actually decode and use the broadcast data. Authorized users only need to have possession of either a short decryption key or an automatic rolling code device that uses its own highly accurate independent timing mechanism to decrypt the data.

System hardware components

Similar to one-way terrestrial return, satellite Internet access may include interfaces to the public switched telephone network for squawk box applications. An Internet connection is not required, but many applications include a File Transfer Protocol (FTP) server to queue data for broadcast.

System software components

Most one-way broadcast applications require custom programming at the remote sites. The software at the remote site must filter, store, present a selection interface to and display the data. The software at the transmitting station must provide access control, priority queuing, sending, and encapsulating of the data.

Services

Emerging commercial services in this area include:

Efficiency increases

2013 FCC report cites big jump in satellite performance

In its report released in February, 2013, the Federal Communications Commission noted significant advances in satellite Internet performance. The FCC's Measuring Broadband America report also ranked the major ISPs by how close they came to delivering on advertised speeds. In this category, satellite Internet topped the list, with 90% of subscribers seeing speeds at 140% or better than what was advertised.

Reducing satellite latency

Much of the slowdown associated with satellite Internet is that for each request, many roundtrips must be completed before any useful data can be received by the requester. Special IP stacks and proxies can also reduce latency through lessening the number of roundtrips, or simplifying and reducing the length of protocol headers. Optimization technologies include TCP acceleration, HTTP pre-fetching and DNS caching among many others. See the Space Communications Protocol Specifications standard (SCPS), developed by NASA and adopted widely by commercial and military equipment and software providers in the market space.

Satellites launched

The WINDS satellite was launched on February 23, 2008. The WINDS satellite is used to provide broadband Internet services to Japan and locations across the Asia-Pacific region. The satellite to provides a maximum speed of 155 Mbit/s down and 6 Mbit/s up to residences with a 45 cm aperture antenna and a 1.2 Gbit/s connection to businesses with a 5-meter antenna.[45] It has reached the end of its design life expectancy.

SkyTerra-1 was launched in mid-November 2010, providing North America, while Hylas-1 was launched in November 2010, targeting Europe.

On December 26, 2010, Eutelsat's KA-SAT was launched. It covers the European continent with 80 spot beams—focused signals that cover an area a few hundred kilometers across Europe and the Mediterranean. Spot beams allow for frequencies to be effectively reused in multiple regions without interference. The result is increased capacity. Each of the spot beams has an overall capacity of 900 Mbit/s and the entire satellite will has a capacity of 70 Gbit/s.

ViaSat-1, the highest capacity communications satellite in the world, was launched Oct. 19, 2011 from Baikonur, Kazakhstan, offering 140 Gbit/s of total throughput capacity, through the Exede Internet service. Passengers aboard JetBlue Airways can use this service since 2015. The service has also been expanded to United Airlines, American Airlines, Scandinavian Airlines, Virgin America and Qantas.

The EchoStar XVII satellite was launched July 5, 2012 by Arianespace and was placed in its permanent geosynchronous orbital slot of 107.1° West longitude, servicing HughesNet. This Ka-band satellite has over 100 Gbit/s of throughput capacity.

Since 2013, the O3b satellite constellation claims an end-to-end round-trip latency of 238 ms for data services.

In 2015 and 2016, the Australian Government launched two satellites to provide internet to regional Australians and residents of External Territories, such as Norfolk Island and Christmas Island.

Low Earth orbit

As of September 2020, around 700 satellites have been launched for Starlink and 74 for the OneWeb satellite constellation. Starlink has begun its private beta phase.

Space industry

From Wikipedia, the free encyclopedia
https://en.wikipedia.org/wiki/Space_industry

Space industry refers to economic activities related to manufacturing components that go into Earth's orbit or beyond, delivering them to those regions, and related services. Owing to the prominence of the satellite-related activities, some sources use the term satellite industry interchangeably with the term space industry. The term space business has also been used. A narrow definition encompasses only hardware providers (primarily related to launch vehicles and satellites). This definition does not exclude certain activities, such as space tourism. Thus more broadly, space industry can be described as the companies involved in the space economy, and providing goods and services related to space. Space economy has been defined as "all public and private actors involved in developing and providing space-enabled products and services. It comprises a long value-added chaining, starting with research and development actors and manufacturers of space hardware and ending with the providers of space-enabled products and services to final users."

Segments and revenues

The three major sectors of the space industry are: satellite manufacturing, support ground equipment manufacturing, and the launch industry. The satellite manufacturing sector is composed of satellite and their subsystems manufacturers. The ground equipment sector is composed of manufacturing items like mobile terminals, gateways, control stations, VSATs, direct broadcast satellite dishes, and other specialized equipment. The launch sector is composed of launch services, vehicle manufacturing and subsystem manufacturing.

With regards to the worldwide satellite industry revenues, in the period 2002 to 2005 those remained at the 35–36 billion USD level. In that, majority of revenue was generated by the ground equipment sector, with the least amount by the launch sector. Space-related services are estimated at about US$100 billion. The industry and related sectors employ about 120,000 people in the OECD countries, while the space industry of Russia employs around 250,000 people. Capital stocks estimated the worth of 937 satellites in Earth's orbit in 2005 at around 170 to US$230 billion. In 2005, OECD countries budgeted around US$45 billion for space-related activities; income from space-derived products and services has been estimated at US$110–120 billion in 2006 (worldwide).

History and trends

The space industry began to develop after World War II, as rockets and then satellites entered into military arsenals, and later found civilian applications. It retains significant ties to the government. In particular, the launch industry features a significant government involvement, with some launch platforms (like the space shuttle) being operated by governments. In recent years, however, private spaceflight is becoming realistic, and even major government agencies, such as NASA, have begun relying on privately operated launch services. Some future developments of the space industry that are increasingly being considered include new services such as space tourism.

From 2004–2013, total orbital launches by country/region were: Russia: 270, US: 181, China: 108, Europe: 59, Japan: 24, India: 19 and Brazil: 1.

Relevant trends in the 2008–2009 for the space industry have been described as:

The 2019 Space Report estimates that in 2018 total global space activity was $414.75 Billion. Of that, the report estimates that 21%, or $87.09 Billion, was from U.S. Government Space Budgets.

Space launch market competition

From Wikipedia, the free encyclopedia

Space launch market competition is the manifestation of market forces in the launch service provider business. In particular it is the trend of competitive dynamics among payload transport capabilities at diverse prices having a greater influence on launch purchasing than the traditional political considerations of country of manufacture or the national entity using, regulating or licensing the launch service.

Following the advent of spaceflight technology in the late 1950s, space launch services came into being, exclusively by national programs. Later in the 20th century commercial operators became significant customers of launch providers. International competition for the communications satellite payload subset of the launch market was increasingly influenced by commercial considerations. However, even during this period, for both commercial- and government-entity-launched commsats, the launch service providers for these payloads used launch vehicles built to government specifications, and with state-provided development funding exclusively.

In the early 2010s, privately developed launch vehicle systems and space launch service offerings emerged. Companies now faced economic incentives rather than the principally political incentives of the earlier decades. The space launch business experienced a dramatic lowering of per-unit prices along with the addition of entirely new capabilities, bringing about a new phase of competition in the space launch market.

History

In the early decades of the Space Age—1950s–2000s—the government space agencies of the Soviet Union and the United States pioneered space technology. This was augmented by collaboration with affiliated design bureaus in the USSR and contracts with commercial companies in the US. All rocket designs were built explicitly for government purposes. The European Space Agency (ESA) was formed in 1975, largely following the same model of space technology development. Other national space agencies—such as China's CNSA and India's ISRO—also financed the indigenous development of their own national designs.

Communications satellites were the principal non-government market. Although launch competition in the early years after 2010 occurred only in and amongst global commercial launch providers, the US market for military launches began to experience multi-provider competition in 2015, as the US government began to move away from their previous monopoly arrangement with United Launch Alliance (ULA) for military launches. By 2018, the ULA monopoly on US national security space launch had evaporated.

By mid-2017, the results of this multi-year competitive pressure on commercially bid launch prices was being observed in the actual number of launches achieved. With frequent recovery of first-stage boosters by SpaceX, expendable missions had become a rare occurrence for them. But the new landscape did not come without a cost. Many space launch providers are expending capital to develop new lower-cost reusable spaceflight technologies. SpaceX alone had expended about US$1 billion by 2017 in order to develop the capability to reuse orbital class boosters on a subsequent flight.

By 2021, the monopoly previously held by nation states to be the only entities to fund, train, and send astronauts for human space exploration was ending as the first mission with exclusively private citizens—Inspiration4—was scheduled to launch in late 2021. The rocket and capsule for the flight, the training, and the funding are all provided by private entities outside of the traditional NASA process that had held the US monopoly since the early 1960s.

1970s and 1980s: Commercial satellites emerge

Non-military commercial satellites began to be launched in volume in the 1970s and 1980s. Launch services were supplied exclusively with launch vehicles developed originally for various Cold War military programs, with their attendant cost structures.

SpaceNews journalist Peter B. De Selding has asserted that French government leadership, and the Arianespace consortium "all but invented the commercial launch business in the 1980s" principally "by ignoring U.S. government assurances that the reusable U.S. space shuttle would make expendable launch vehicles like Ariane obsolete."

Little market competition emerged inside any national market before approximately the late 2000s. Some global commercial competition arose between the national providers of various nation states for international commercial satellite launches. Within the US, as late as 2006, the high cost structures built in to government contractors'—Boeing's Delta IV and Lockheed Martin's Atlas V—launch vehicles left little commercial opportunity for US launch service providers but considerable opportunity for low-cost Russian boosters based on leftover Cold War military missile technology.

DARPA's Simon P. Worden and the USAF's Jess Sponable analyzed the situation in 2006 and offered that, "One bright point is the emerging private sector, which [was then] pursuing suborbital or small lift capabilities." They concluded, "Although such vehicles support very limited US Department of Defense or National Aeronautics and Space Administration spaceflight needs, they do offer potential technology demonstration stepping stones to more capable systems needed in the future."; demonstrating capabilities that would grow in the next five years while supporting published list prices substantially below the rates on offer by the national providers.

2010s: Competition and pricing pressure

Launch market
Rocket Origin First launch 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Ariane 5  Europe 1996 12 8 12 6 10 12 10 10 9 8 7

Proton-M  Russia 2001 8 7 11 8 8 7 3 3 0 3 0

Soyuz-2  Russia 2006 1 5 4 5 8 6 5 5 5 6 4

PSLV  India 2007[a] 1 2 2 2 1 3 3 2 3 3 1

Falcon 9 / Falcon Heavy  United States 2010 0 0 0 2 4 5 8 12 16 11 18

Electron  United States New Zealand 2017 N/A N/A N/A N/A N/A N/A N/A 0 3 6 6

Vega  Europe 2012 N/A N/A 0[b] 1 1 2 2 4 2 2 1

Kuaizhou 1A  China 2017[c] N/A N/A N/A N/A N/A N/A N/A 1 1 4 1

Others[d] - - 7 10 5 7 5 6 6 4 5 1 4
Total market 29 32 34 31 37 41 37 41 44 44 42

Since the early 2010s, new private options for obtaining spaceflight services emerged, bringing substantial price pressure into the existing market.

Before 2013, Europe's Arianespace, which flies the Ariane 5, and International Launch Services (ILS), which marketed Russia's Proton vehicle dominated the communications satellite launch market. In November 2013, Arianespace announced new pricing flexibility for the "lighter satellites" it carries to orbits aboard its Ariane 5 in response to SpaceX's growing presence in the worldwide launch market.

Launch vehicle estimated payload cost per kg
Launch Vehicle Payload cost per kg
Vanguard $1,000,000 
Space Shuttle $54,500 
Electron $19,039 
Terran 1 $9,600 
Ariane 5G $9,167 
Long March 3B $4,412 
Proton $4,320 
Falcon 9 $2,720 
Falcon Heavy $1,400 
Starship (planned) $10 

In early December 2013, SpaceX flew its first launch to a geostationary transfer orbit providing additional credibility to its low prices which had been published since at least 2009. The low launch prices offered by the company, especially for communication satellites flying to geostationary (GTO) orbit, resulted in market pressure on its competitors to lower their prices.

By late 2013, with a published price of US$56.5 million per launch to low Earth orbit, "Falcon 9 rockets [were] already the cheapest in the industry. Reusable Falcon 9s could drop the price by an order of magnitude, sparking more space-based enterprise, which in turn would drop the cost of access to space still further through economies of scale."

Falcon 9 GTO missions 2014 pricing was approximately US$15 million less than a launch on a Chinese Long March 3B. Despite SpaceX prices being somewhat lower than Long March prices, the Chinese Government and the Great Wall Industry company—which markets the Long March for commsat missions—made a policy decision to maintain commsat launch prices at approximately US$70 million.

In early 2014, the ESA asked European governments for additional subsidies to face the competition from SpaceX. Continuing to face "stiff competition on price", in April seven European satellite operator companies—including the four largest in the world by annual revenue—asked that the ESA

"find immediate ways to reduce Ariane 5 rocket launch costs and, in the longer term, make the next-generation Ariane 6 vehicle more attractive for smaller telecommunications satellites. ... [C]onsiderable efforts to restore competitiveness in price of the existing European launcher need to be undertaken if Europe is [to] maintain its market situation. In the short term, a more favorable pricing policy for the small satellites currently being targeted by SpaceX seems indispensable to keeping the Ariane launch manifest strong and well-populated."

In competitive bids during 2013 and early 2014, SpaceX was winning many launch customers that formerly "would have been all-but-certain clients of Europe's Arianespace launch consortium, with prices that are $60 million or less." Facing direct market competition from SpaceX, the large US launch provider United Launch Alliance (ULA) announced strategic changes in 2014 to restructure its launch business—replacing two launch vehicle families (Atlas V and Delta IV) with the new Vulcan architecture—while implementing an iterative and incremental development program to build a partially reusable and much lower-cost launch system over the next decade.

In June 2014, Arianespace CEO Stéphane Israël [fr] announced that European efforts to remain competitive in response to SpaceX's recent success had begun in earnest. This included the creation of a new joint venture company from Arianespace's two largest shareholders: the launch-vehicle producer Airbus and engine-producer Safran. No additional details of the efforts to become more competitive were released at the time.

In August 2014, Eutelsat, the third-largest fixed satellite services operator worldwide by revenue, indicated that it planned to spend approximately €100 million less each year in the next three years, due to lower prices for launch services and by transitioning their commsats to electric propulsion. They indicated they are using the lower prices they can get from SpaceX against Arianespace in negotiations for launch contracts.

By December 2014, Arianespace had selected a design and commenced development of the Ariane 6, its new entrant into the commercial launch market aiming for more competitively priced launch service offerings, with operational flights planned to begin in 2020.

In October 2014, ULA announced a major restructuring of processes and workforce to decrease launch costs by half. One of the reasons given for the restructuring and new cost reduction goals was competition from SpaceX. ULA had less "success landing contracts to launch private, commercial communications and earth observation satellites" than it had with launch US military payloads, but CEO Tory Bruno believed the new lower-cost launcher could be competitive and succeed in the commercial satellite sector. The US GAO calculated the average cost of each ULA rocket launch for the US government had risen to approximately US$420 million in 2014.

By November 2014, SpaceX had "already begun to take market share" from Arianespace. Eutelsat CEO Michel de Rosen said, in reference to ESA's program to develop the Ariane 6, "Each year that passes will see SpaceX advance, gain market share and further reduce its costs through economies of scale." European government research ministers approved the development of the new European rocket—Ariane 6—in December 2014, projecting the rocket would be "cheaper to construct and to operate" and that "more modern methods of production and a streamlined assembly to try to reduce unit costs" plus "the rocket's modular design can be tailored to a wide range of satellite and mission types [so it] should gain further economies from frequent use."

In 2015, the ESA was endeavoring to reorganize to reduce bureaucracy and decrease inefficiencies in launcher and satellite spending which had been tied historically to the amount of tax funds that each country has provided to it.

In May 2015, ULA stated it would go out of business unless it won commercial and civil satellite launch orders to offset an expected slump in U.S. military and spy launches. As of 2015, SpaceX had remained "the low-cost supplier in the industry." However, in the market for launches of US military payloads, ULA faced no competition for nearly a decade, since the formation of the ULA joint venture from Lockheed Martin and Boeing in 2006. However, SpaceX was also upsetting the traditional military space launch arrangement in the US, which in 2014 was called a monopoly by space analyst Marco Caceres and criticized by some in the US Congress. By May 2015, the SpaceX Falcon 9 v1.1 was certified by the USAF to compete to launch many of the expensive satellites which are considered essential to US national security. And by 2019, ULA, with their next-generation, lower-cost Vulcan/Centaur launch vehicle, was one of four launch companies competing for the US military's multi-year block-buy contract for 2022–2026 against SpaceX (Falcon 9 and Falcon Heavy), Northrop Grumman (Omega), and Blue Origin (New Glenn), where only the SpaceX vehicles are currently flying and the other three are all slated to make their initial launch in 2021.

University of Southampton researcher Clemens Rumpf argued in 2015 that the global launch industry was developed in an "old world where space funding was provided by governments, resulting in a stable foundation for [global] space activities. The money for the space industry [had been] secure and did not encourage risk-taking in the development of new space technologies. ... the space landscape [had not changed much since the mid-1980s]." As a result, the emergence of SpaceX was a surprise to other launch providers "because the need to evolve launcher technology by a giant leap was not apparent to them. SpaceX show[ed] that technology has advanced sufficiently in the last 30 years to enable new, game changing approaches to space access." The Washington Post said that the changes occasioned from multiple competing service providers resulted in a revolution in innovation.

By mid-2015, Arianespace was speaking publicly about job reductions as part of an attempt to remain competitive in the "European industry [which is being] restructured, consolidated, rationalised and streamlined" to respond to SpaceX price competition. Still, "Arianespace remained confident it could maintain its 50 per cent share of the space launch market despite SpaceX's slashing prices by building reliable rockets that are smaller and cheaper."

Following the first successful landing and recovery of a SpaceX Falcon 9 first stage in December 2015, equity analysts at investment bank Jefferies estimated that launch costs to satellite operators using Falcon 9 launch vehicles may decline by about 40 percent of SpaceX' typical US$61 million per launch, although SpaceX had only forecast an approximately 30 percent launch price reduction from the use of a reused first stage by early 2016. In early 2016, Arianespace was projecting a launch price of €90–100 million, about one-half of the 2015 Ariane 5 per launch price.

In March 2017, SpaceX reused an orbital booster stage that had been previously launched, landed and recovered, stating the cost to the company of doing so "was substantially less than half the cost" of a new first stage. COO Gwynne Shotwell said the cost savings "came even though SpaceX did extensive work to examine and refurbish the stage. We did way more on this one than [is planned for future recovered stages]."

A 2017 industry-wide view by SpaceNews reported: By 5 July 2017, SpaceX had launched 10 payloads during a bit over six months—"outperform[ing] its cadence from earlier years"—and "is well on track to hit the target it set last year of 18 launches in a single year." There were indeed 18 successful Falcon 9 launches in 2017. By comparison,

France-based Arianespace, SpaceX’s chief competitor for commercial telecommunications satellite launches, is launching 11 to 12 times a year using its fleet of three rockets—the heavy-lift Ariane 5, medium-lift Soyuz and light-lift Vega. Russia has the ability to launch a dozen or more times with Proton doing both government and commercial missions, but has operated at a slower cadence the past few years due to launch failures and [the] discovery of an incorrect material used in some rocket engines. United Launch Alliance, SpaceX’s chief competitor for defense missions, regularly conducts around a dozen or more launches per year, but the Boeing-Lockheed Martin joint venture has only performed four missions through mid-year 2017.

By 2018, the monopoly ULA had held on US national security space launch was over. ULA responded to the Falcon 9 by beginning development in 2014 on the Vulcan rocket, a partly reusable vehicle powered by Blue Origin BE-4 engines, intended to replace its ageing expendable Atlas V and Delta IV rockets. In early 2018, SpaceNews reported that "[t]he rise of SpaceX has disrupted the launch industry at large." By mid-2018, with Proton flying as few as two launches in an entire year, the Russian state corporation Roscosmos announced they would retire the Proton launch vehicle, in part due to competition from lower-cost launch alternatives.

In 2018 SpaceX launched a record 21 times, exceeding the 18 launches in 2017; ULA had flown just 8 flights in 2018.

In early 2019, the French "Court of Audit criticized Arianespace for what it "perceived as an unsustainable and overly cautious response to the swift rise of SpaceX’s affordable and reusable Falcon 9 rocket." The Ariane 6 was found to be uncompetitive with SpaceX launch service provider options, and further found that "the most probable outcome for Ariane 6 is one in which the very existence of the rocket will be predicated upon continual annual subsidies from the European Space Agency (ESA) in order to make up for the rocket’s inability to sustain commercial orders beyond a handful of discounted shoo-in contracts."

Raising private capital

Private capital invested in the space launch industry prior to 2015 was modest. From 2000 through the end of 2015, a total of US$13.3 billion of investment finance had been invested in the space sector. US$2.9 billion of that was venture capital financing, of which $1.8 billion was invested in 2015 alone.

For the space launch sector, this began to change with the January 2015 Google and Fidelity Investments investment of US$1 billion in SpaceX. While private satellite manufacturing companies had previously raised large capital rounds, that has been the largest investment to date in a launch service provider.

SpaceX developed the Falcon Heavy (first flight in February 2018), and are developing the Starship launch vehicle with private capital. No government financing is being provided for either rocket.

After decades of reliance on government funding to develop the Atlas and Delta families of launch vehicles, in October 2014 the successor company—ULA—began development of a rocket, initially with private funds, as one part of a solution for its problem of "skyrocketing launch costs". However, by March 2016 it had become clear that the new Vulcan launch vehicle would be developed with funding via a public–private partnership with the US government. By early 2016, the US Air Force had committed US$201 million of funding for Vulcan development. ULA has not "put a firm price tag on [the total cost of Vulcan development but ULA CEO Tory Bruno has] said new rockets typically cost $2 billion, including $1 billion for the main engine". ULA had asked the US government in 2016 to provide a minimum of US$1.2 billion by 2020 to assist it in developing the new US launch vehicle. It was unclear how the change in development funding mechanisms might change ULA plans for pricing market-driven launch services. Since Vulcan development began in October 2014, the privately generated funding for Vulcan development has been approved only on a short term basis. The ULA board of directors—composed entirely of executives from Boeing and Lockheed Martin—is approving development funding on a quarter-by-quarter basis.

Other launch service providers are developing new space launch systems with substantial government capital investment. For the new ESA launch vehicle—Ariane 6, aiming for flight in the 2020s—€400 million of development capital was requested to be "industry's share", ostensibly private capital. €2.815 billion was slated to be provided by various European government sources at the time the early finance structure was made public in April 2015. In the event, France's Airbus Safran Launchers—the company building the Ariane 6—did agree to provide €400 million of development funding in June 2015, with expectation of formalizing the development contract in July 2015.

As of May 2015, the Japanese legislature was considering legislation to provide a legal framework for private company spaceflight initiatives in Japan. It was unclear whether the legislation would become law and, if so, whether significant private capital would subsequently enter the Japanese space launch industry as a result. In the event, the legislation appears not to have become law, and little change in the funding mechanism for Japanese space vehicles are anticipated.

The economics of space launch are driven, in part, by business demand in the space economy. Morgan Stanley projected in 2017 that "revenue from the global industry will increase to at least US$1.1 trillion by 2040, more than triple the figure in 2016. This does not include "the more aspirational possibilities presented by space tourism or mining, nor by [NASA] megaprojects."

2019 and beyond

A number of market responses to the increase of lower-cost competition in the space launch market began in the 2010s. As rocket engine and rocket technologies have fairly long development cycles, most of the results of these moves will not be seen until the late-2010s and early 2020s.

ULA entered into a partnership with Blue Origin in September 2014 to develop the BE-4 LOX/methane engine to replace the RD-180 on a new lower-cost first stage booster rocket. At the time, the engine was already in its third year of development by Blue Origin. ULA indicated then they expected the new stage and engine to start flying no earlier than 2019 on a successor to the Atlas V A month later, ULA announced a major restructuring of processes and workforce to decrease launch costs by half. One of the reasons given for the restructuring and new cost reduction goals was competition from SpaceX. ULA intended to have preliminary design ideas in place for a blending of the Atlas V and Delta IV technology by the end of 2014, but in the event, the high-level design was announced in April 2015. By early 2018, ULA had moved the first launch date for the Vulcan launch vehicle to no earlier than mid-2020, and by 2019, were aiming to launch in 2021.

Blue Origin is also planning to begin flying its own orbital launch vehicle—the New Glenn—in 2021), a rocket that will also use the Blue BE-4 engine on the first stage, the same as the ULA Vulcan. Blue Origin's Jeff Bezos initially said they did not plan to compete for the US military launch market, stating the market is "a relatively small number of flights. It's very hard to do well and ULA is already great at it. I'm not sure where we would add any value." Bezos sees competition as a good thing, particularly as competition leads to his ultimate goal of getting "millions and millions of people living and working in space." This decision was reversed in 2017, with Blue Origin saying it did intend to compete for US national security launches. In 2019, Blue was not only competing to offer the New Glenn launch vehicle for the US military's multi-year block-buy contract for "all [US] national security launches from 2022 to 2026" against SpaceX, ULA (for which Blue is on contract to provide the BE-4 engines for the ULA Vulcan), and others, it had "said the Air Force competition was designed to unfairly benefit ULA."

In early 2015, the French space agency CNES began working with Germany and a few other governments to start a modest research effort with a hope to propose a LOX/methane reusable launch system, tentatively named Ariane NEXT, by mid-2015, with flight testing unlikely before approximately 2026. The stated design objective was to reduce both the cost and duration of reusable vehicle refurbishment and was partially motivated by the pressure of lower-cost competitive options with newer technological capabilities not found in the Ariane 6. Responding to competitive pressures, one stated objective of Ariane NEXT is to reduce Ariane launch cost by a factor of two beyond improvements brought by Ariane 6. Operational flights are scheduled to begin in 2020.

SpaceX stated in 2014 that if they were successful at developing the reusable technology, launch prices in the US$5 to 7 million range for the reusable Falcon 9 could be achieved in the longer term. In the event, SpaceX did not choose to develop the reusable second stage for the Falcon 9, but are doing so for their next-generation launch vehicle, the new fully reusable Starship. SpaceX indicated in 2017 that the single-launch marginal cost of the Starship would be approximately US$7 million. In November 2019, Elon Musk reduced this figure to $2 million -- $900,000 for fuel and $1.1 million for launch support services. After the mid-2010s, prices for smallsat and cubesat launch services began to decline significantly. Both the addition of new small launch vehicles to the market (Rocket Lab, Electron, Firefly, Vector, and several Chinese service providers) and the addition of new capacity of rideshare services are putting price pressure on existing providers. "Cubesats that used to cost US$350,000–400,000 to launch are now US$250,000 and going down."

According to an industry panel interviewed in October 2018, an industry shakeout is expected between 2019 and 2021 due to the excess supply compared to demand. Prices should reach stability once the new entrants have demonstrated their capabilities.

In the first quarter of 2020, SpaceX launched over 61,000 kg (134,000 lb) of payload mass to orbit while all Chinese, European, and Russian launchers placed approximately 21,000 kg (46,000 lb), 16,000 kg (35,000 lb) and 13,000 kg (29,000 lb) in orbit, respectively, with all other launch providers launching approximately 15,000 kg (33,000 lb).

Competition for the American heavy-lift market

As early as August 2014, media sources noted that the US launch market may have two competitive super-heavy launch vehicles available in the 2020s to launch payloads of 100 metric tons (220,000 lb) or more to low-Earth orbit. The US government is developing the Space Launch System (SLS), capable of lifting very large payloads of 70 to 130 tonnes (150,000 to 290,000 lb) from Earth. On the commercial side, SpaceX has been privately developing their next-generation Starship launch system, featuring fully reusable boosters and spacecraft, and targeting 150 tonnes (330,000 lb) of payload. Development of the methalox Raptor engine began in 2012, first flight tests were done in 2019. By 2014, NASASpaceflight.com reported: "SpaceX [had] never openly portrayed its BFR plans in competition with NASA’s SLS. ... However, should SpaceX make solid progress on the development of its BFR over the coming years, it is almost unavoidable that America’s two HLVs will attract comparisons and a healthy debate, potentially at the political level."

The Starship is planned to replace the Falcon 9 and Falcon Heavy launch vehicles, as well as the Dragon spacecraft, initially aiming at the Earth-orbit launch market, but explicitly adding substantial capability to support long-duration spaceflight in the cislunar and Mars mission environments. SpaceX intends this approach to bring significant cost savings that will help the company justify the development expense of designing and building the Starship system.

Following the successful maiden flight of the SpaceX Falcon Heavy in February 2018, and with SpaceX advertising a US$90 million list price for transporting up to 63,800 kg (140,700 lb) to low-Earth orbit, U.S. President Donald Trump said: "If the government did it, the same thing would have cost probably 40 or 50 times that amount of money. I mean literally. When I heard $80 [sic] million, I'm so used to hearing different numbers with NASA." Space journalist Eric Berger extrapolated: "Trump seems to be siding with commercial space advocates, who say that, while rockets like the Falcon Heavy may be slightly less capable than the SLS, they come at a drastically reduced price that will enable much quicker, broader exploration of the Solar System."

Launch contract competitive results

Before 2014

Before 2014, Arianespace had dominated the commercial launch market for many years. "In 2004, for example, they held over 50% of the world market."

  • 2010: 26 geostationary commercial satellites were ordered under long-term launch contracts.
  • 2011: Only 17 geostationary commercial satellites went under contract during 2011 as an "historically large capital spending surge by the biggest satellite fleet operators" began to tail off, something that had been anticipated to follow the various satellite fleets being substantially upgraded.
  • 2012: As of September 2012, the major launch providers globally were Arianespace (France), International Launch Services (United States) which markets the Russian Proton launch vehicle, and Sea Launch of Switzerland which markets the Russian-Ukrainian Zenit rocket. In late 2012, each of them had manifests that were "full or nearly so for both 2012 and 2013."
  • 23 geostationary orbit communications satellites were placed under firm contract during 2013.

2014

A total of 20 launches were booked in 2014 for commercial launch service providers. 19 were for flights to geostationary orbit (GEO), one was for a low Earth orbit (LEO) launch.

Arianespace and SpaceX each signed nine contracts for geostationary launches, while Mitsubishi Heavy Industries was awarded one. United Launch Alliance signed one commercial contract to launch an Orbital Sciences Corporation Cygnus spacecraft to the LEO-orbiting International Space Station following the destruction over the pad of an Orbital Antares vehicle in October 2014. This was the first year in some time that no commercial launches were booked on the Russian (Proton-M) and Russian-Ukrainian (Zenit) launch service providers.

For perspective, eight additional satellites in 2014 were booked "by national launch providers in deals for which no competitive bids were sought."

Overall in 2014 Arianespace took 60% of commercial launch market share.

2015

In 2015, Arianespace signed 14 commercial-order launch contracts for geosynchronous-orbit commsats, while SpaceX received only nine, with International Launch Services (Proton) and United Launch Alliance signing one contract each. In addition, Arianespace signed their largest launch contract ever—for 21 LEO launches for OneWeb using the Europeanized Russian Soyuz launch vehicle launching from the ESA spaceport—and two Vega smallsat launches.

The launch of the US Air Force's first GPS III satellite is expected no earlier than 2017 rather than 2016 as originally planned. ULA—after having held a government-sanctioned monopoly on US military launches for the previous decade—declined to even submit a bid, leaving the likely contract award winner to be SpaceX, the only other domestic US provider of launch services to be certified as usable by the US military.

Since 2016

SpaceX's market share increased rapidly. In 2016, SpaceX had 30% global market share for newly awarded commercial launch contracts, in 2017 the market share reached 45%, and 65% in 2018.

Five years after SpaceX began to recover Falcon 9 booster stages, and three years after they began reflying previously-flown boosters on commercial flights, the US military contracted in September 2020 for flying several US Space Force GPS satellite flights in 2021+ on previously-flown booster rockets in order to reduce launch costs by over US$25 million per flight.

Launch industry response

In addition to price reductions for proffered launch service contracts, launch service providers are restructuring to meet increased competitive pressures within the industry.

In 2014, United Launch Alliance (ULA) began a multi-year major restructuring of processes and workforce to decrease launch costs by half. In May 2015, ULA announced it would decrease its executive ranks by 30 percent in December 2015, with the layoff of 12 executives. The management layoffs were the "beginning of a major reorganization and redesign" as ULA endeavours to "slash costs and hunt out new customers to ensure continued growth despite the rise of [SpaceX]".

According to one Arianespace managing director in 2015, "'It's quite clear there's a very significant challenge coming from SpaceX,' he said. 'Therefore, things have to change - and the European industry is being restructured, consolidated, rationalised and streamlined.' "

Jean Botti, Chief technology officer for Airbus (which makes the Ariane 5) warned that "those who don't take Elon Musk seriously will have a lot to worry about."

Airbus announced in 2015 that they would open an R&D center and venture capital fund in Silicon Valley.[96] Airbus CEO Fabrice Bregier stated: "What is the weakness of a big group like Airbus when we talk about innovation? We believe that we have better ideas than the rest of the world. We believe that we know because we control the technologies and platforms. The world has shown us in the car industry, the space industry and the hi-tech industry that this is not true. And we need to be open to others' ideas and others' innovations." Airbus Group CEO Tom Enders said: "The only way to do it for big companies is really to create spaces outside of the main business where we allow and where we incentivize experimentation ... That is what we have started to do but there is no manual ... It is a little bit of trial and error. We all feel challenged by what the Internet companies are doing."

Following a SpaceX launch vehicle failure in June 2015—due to the lower prices, increased flexibility for partial-payload launches of the Ariane heavy lifter, and decreased cost of operations of the ESA Guiana Space Center spaceport—Arianespace regained the competitive lead in commercial launch contracts signed in 2015. SpaceX successful recovery of a first stage rocket in December 2015 did not change the Arianespace outlook. Arianespace CEO Israel stated the next month that the "challenges of reusability ... have not disappeared. ... The stress on stage or engine structures of high-speed passage through the atmosphere, the performance penalty of reserving fuel for the return flight instead of maximizing rocket lift capacity, the need for many annual launches to make the economics work – all remain issues."

Despite ULA restructuring begun in 2014 to decrease launch costs by half, the cheapest ULA space launch in early 2018 remained the Atlas V 401 at a price of approximately US$109 million, more than US$40 million more than a SpaceX standard commercial launch, which the US military began to utilize for some US government missions that flew in 2018. By early 2018, two European government space agencies—CNES and DLR—began concept development for a new reusable engine aimed to be manufactured at one-tenth the cost of the Ariane 5's first-stage engine, Prometheus. As of January 2018, the first flight test for the rocket engine in a demonstration vehicle was expected in 2020. The goal was to "establish a base of knowledge for future launch vehicles that could, maybe, be reusable."

In the market for launches of small satellites—including both rideshare launch services on medium-lift and heavy-lift launch vehicles, and the developing capacity from small launch vehicles—prices were falling by early 2018 as more launch capacity entered the market. Cubesat launches that had previously cost US$350–400 thousand had declined by March 2018 to US$250 thousand, and prices were continuing to decline. New capacity from Chinese Long March and Indian PSLV medium-lift vehicles and a number of new small launchers from Virgin Orbit, Rocket Lab, Firefly, and a number of new Chinese small launch vehicles are expected to put more downward pressure on prices, while also increasing the ability of entities launching smallsats to purchase custom launch dates and launch orbits, increasing overall responsiveness to launch purchasers.

As recently as 2013, nearly half of the world's commercial launch payloads were launched on Russian launch vehicles. By 2018 the Russian launch service market share was projected to shrink to about 10% of the world's commercial launch market. Russia launched only three commercial payloads in 2017. Technical problems with the Proton rocket and intense competition with SpaceX have been the prime drivers of this decline. SpaceX's share of the commercial market has grown from 0% in 2009 to a projected 50% for 2018.

By 2018, Russia has indicated it may reduce focus on the commercial launch market. In April 2018, Russia's chief spaceflight official, Deputy Prime Minister Dmitry Rogozin said in an interview, "The share of launch vehicles is as small as four percent of the overall market of space services. The four percent stake isn’t worth the effort to try to elbow Musk and China aside. Payloads manufacturing is where good money can be made."

The global launch market revenue from the 33 commercial orbital launches in 2017 was estimated to be just over US$3 billion while the global space economy is much larger at US$345 billion (2016 data). The launch industry is becoming increasingly competitive; however, to date there has been no indication of a large increase of launch opportunities in response to decreasing prices. Russia may be the first launch provider to be a casualty of over supply of launch services.

By May 2018, as SpaceX prepared to launch the first Block 5 version of Falcon 9, Eric Berger reported in Ars Technica that, during the eight years since its maiden launch, Falcon 9 had become the dominant rocket globally, through SpaceX efforts to take risks and relentlessly innovate driving efficiency upwards. The first Block 5 booster flew successfully on 11 May 2018, and SpaceX then "lowered the standard price of a Falcon 9 launch from US$62 million to about US$50 million. This move further strengthens SpaceX’s competitiveness in the commercial launch market."

In mid-2018, no fewer than three commercial launch vehicles—Ariane 6, Vulcan, and New Glenn—were being targeted for initial launch in 2020, two of them explicitly aimed at competitively responding to the offerings of SpaceX (although journalists and industry experts were expressing doubts that all these target dates would be met.)

In addition to building new launch vehicles and endeavoring to lower launch prices, competitive responses may include new product offerings, and now do include a more schedule-oriented launch cadence for dual-manifested payloads on offer from Blue Origin. Blue Origin announced in 2018 they intend to contract for launch services a bit differently than the contract options that have been traditionally offered in the commercial launch market. The company has stated they will support a regular launch cadence of up to eight launches per year. If one of the payload providers for a multi-payload launch is not ready on time, Blue Origin will hold to the launch timeframe, and fly the remaining payloads on time at no increase in price. This is quite different from how dual-launch manifested contracts have been previously handled by Arianespace (Ariane V and Ariane 6) and Mitsubishi Heavy Industries (H-IIA and H3). SpaceX and International Launch Services offer only dedicated launch contracts.

In June 2019, the European Commission provided funding for a three-year project called RETALT to "[copy the] retro-propulsive engine firing technique used by SpaceX to land its Falcon 9 rocket first stages back on land and on autonomous drone ships." The RETALT project funding of €3 million was provided to the German Space Agency and five European companies to fund a study to "tackle the shortcoming of know-how in reusable rockets in Europe."

Effect on related industries

Satellite design and manufacturing is beginning to take advantage of these lower-cost options for space launch services.

One such satellite system is the Boeing 702SP which can be launched as a pair on a lighter-weight dual-commsat stack—two satellites conjoined on a single launch—and which was specifically designed to take advantage of the lower-cost SpaceX Falcon 9 launch vehicle. The design was announced in 2012 and the first two commsats of this design were lofted in a paired launch in March 2015, for a record low launch price of approximately US$30 million per GSO commsat. Boeing CEO James McNerney has indicated that SpaceX's growing presence in the space industry is forcing Boeing "to be more competitive in some segments of the market."

Early information on the Starlink constellation of 4000 satellites operated by SpaceX intended to provide global Internet services, along with a new factory dedicated to manufacturing low-cost smallsat satellites, indicate that the satellite manufacturing industry may "experience a supply shock similar to what the launcher industry is experiencing" in the 2010s.

Venture capital investor Steve Jurvetson has indicated that it is not merely the lower launch prices, but the fact that the known prices act as a signal in conveying information to other entrepreneurs who then use that information to bring on new related ventures.

Launch vehicle cost vs mass launch cost

While vehicle launch cost is a metric utilized when comparing vehicles, the cost per lb/kg launched is also an important factor that is not always directly correlated with the overall launch vehicle cost. The cost per lb/kg launched varies widely due to negotiations, prices, supply & demand, customer requirements, and the number of payloads manifested per launch. Pricing also differs depending on required orbit. Geosynchronous orbit launches historically taking advantage of economies of scales with larger launch vehicles and greater use of the maximum payload capacity of a vehicle vs LEO launches. These varying cost and requirements makes market analysis imprecise.

  • First launch of the competitive PSLV-CA and PSLV-XL versions (2007 and 2008)

  • Maiden flight of Vega was non-commercial

  • Excluding two demo flights of Kuaizhou-1 version in 2013 and 2014

  • Cellular automaton

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