Sharing: Money, Missions, Influence

The last post, “Spacecraft Deployments, SpaceX Activities, What Pandemic?” contained quite a few numbers--mainly to do with satellite costs, manufacturing rates, and deployment shares. A part of the article’s focus was to provide a possible reason for why SpaceX might be launching another 60 Starlink satellites during a pandemic. The proposed broadband service provided by the Starlink satellites has been touted as being for commercial purposes. OneWeb, before its bankruptcy, also advertised its satellites for providing commercial service to the world. The two companies accounted for a major share of satellite deployments in 2020 so far.

Are Commercial Satellite Shares Really so High?

Both companies and their missions are why the following pie chart for 2020 spacecraft deployment activities through sometime in April (it was April 16, now postponed) shows such a huge share for the commercial segment from all the world’s spacecraft deployments. OneWeb and SpaceX satellite deployments alone will account for 91% of spacecraft deployed (and if you’re wondering what is meant by the category names, please reference the explanations in “Commerce, Categories, and Stabilizing Sugar-Daddies”).

On the flip side, if the satellites from either company weren’t included, the total share of commercial spacecraft deployed during that time would be much less, as shown in the updated chart below:

First, let’s acknowledge that these numbers are based on the first quarter of 2020 (and therefore a short sample time-range). And assume that COVID-19 is suppressing some spacecraft deployments.

In the first pie chart, the global civil and military spacecraft deployed during that period made up 6.4% of all 403 spacecraft deployed. The second pie chart paints a different picture: civil and military deployments (which haven’t changed) make up nearly 75% of all spacecraft deployed during that period.

While the first quarter for 2020 seems a small time period to use, the differences between the two charts seem to validate a larger trend based on data from previous years (collected by the Space Foundation). This data shows very similar scenarios--commercial spacecraft deployments always appear strong--but that is because of the large deployments of satellites from two-to-three companies.

Planet, for example, was responsible for 33% of over 430 spacecraft deployed in 2017. During 2018, Planet, Spire, and Iridium combined to take ~55% of commercial satellite deployments. Without them, the overall total of commercial spacecraft deployed (based on Space Foundation estimates) would have been slightly over 60 (~13% share of all spacecraft deployed in 2018). In 2019 Starlink and Planet deployments alone accounted for 168 new satellites orbiting the Earth that year.

Maybe a cause for concern is that all but one of these companies are satellite manufacturers and satellite operators (Iridium’s satellites were manufactured by Thales Alenia). If a satellite operator’s mission is commercial broadband, its manufacturing floor is dedicated to those commercial missions as well. There are strengths with this, such as standardized buses, quick iterations, etc. But as we witnessed with OneWeb, a big drawback with this mission dedication is the possible impact on the supply chain if one of these companies goes bankrupt.

A Caveat

Before proceeding, the following is a caveat regarding the entire next section. It pertains to an area of spacecraft manufacturing that is very grey--costs.

It’s grey because acquiring the information about how much satellites cost apiece is not as easy as going to CarGuru. It’s more like researching costs for U.S. healthcare (which, frankly, shouldn’t require research)--very time-consuming and costly, with many unknowns and a lot of “stakeholders.” It takes digging, recognizing that the digging likely won’t yield any number. If a number is found, then on more than one occasion, that number will be inaccurate. Or worse, there are multiple numbers purporting to be the same thing--all from valid primary sources (this happens more often than you’d think). Welcome to the wobbly world of industry research!

Comparing Satellite Costs

Maybe having two or three companies responsible for the majority of commercial satellite deployments isn’t terrible? As with smartphones and technology companies, maybe having a “big three” of satellite operators is the result of a natural shaking out of the industry? After all, ten years ago, the space industry players of any consequence were the following: Boeing, Lockheed Martin, and, maybe, Northrop Grumman.

But there’s a problem--the individual cost of the spacecraft deployed by companies like Starlink, OneWeb, or Planet are so much less than those deployed by legacy space industry companies. Focusing on a Starlink satellite, I already noted in the previous post that maybe a satellite would cost around $300,000. By the time the next batch of 60 Starlink satellites is deployed (sometime this April), SpaceX will have deployed around $90 million (300*$300k) worth of Starlink satellites for 2020. OneWeb’s $1 million per satellite cost means that the company deployed $68 million worth of satellites. In total, that’s $158 million for 368 commercial communications satellites.

A more traditional commercial telecommunications company, Sky Perfect/JSAT, managed to get JCSAT-17 deployed into geosynchronous orbit during 2020. The cost for that Lockheed Martin-manufactured satellite appears to be more than $300 million. The mind-boggler though, is a military communications spacecraft, AEHF. Based on GAO reports, that one spacecraft cost taxpayers $1.2 billion. And while that is a lot of money, I suspect another military satellite launched during early 2020, USA 294, costs more than an AEHF satellite. These costs point to who is pumping money into the space sector (at least in the U.S.).

Taking this initial pie chart, then, which shows the shares of missions driving satellite deployments during the past few months (including, potentially, next week):

(yeah--it's the same one)

And then the same mission categories, but adjusted for basing it on satellite costs:

The commercial total in the pie chart above includes estimated costs for one JCSAT, 68 OneWeb, and 300 Starlink satellites. The military share is the cost of a single AEHF satellite. There were no equivalent civil communications satellites (except maybe an Indian GSAT). The cost difference shows significant military investment in a single satellite, which is not an exception but a rule. Based on current and past programs, there is no reason to believe civil and military satellite costs will not significantly outweigh commercial costs once 2020 is over.

While there’s plenty of chatter, charts, and championing of commercial space investment in satellites and launch, in the U.S., the government appears to be the major investor for those space assets.

Questioning the Fairy Tale

To be very clear, the point of this part of the analysis isn’t to provoke outrage at seeming irresponsible military program spending. It’s not intended to foster arguments about which spacecraft contain superior technology. It’s certainly not meant to argue that commercial satellites need to be more expensive.

Instead, it offers up some (paltry) data that appears opposed to the current narrative about commercial space. That particular narrative provides fertile ground for the growing claims surrounding the “$1 trillion space economy.” Do the history and data presented here provide room for some doubt against the popular narrative of commercial or “newspace” companies gaining so much ground and influence in the space sector?

The fact that some new companies have managed to become involved is remarkable--especially considering the resources these new companies lack (money) and the evergreen money-tree the legacy sector can seemingly prune at will (courtesy of the U.S. government). The government is the biggest, most obvious customer in the global space economy (and why some conflate this as being U.S. subsidies to space companies). U.S. government space spending (combined military and civil) is nearly $50 billion annually (which is ~1% of the U.S. government budget). Startups, on the other hand, haven’t reached $6 billion in investment yet.

The issue, though, is this: in the current system it appears that only those who have access to a lot of money (billions of dollars a year) are the ones with access to and influence in the space industry. Both NASA and the DoD hold an inordinate amount of influence on the U.S. space industry. The fact there is now another proposal for “saving” the U.S. space industry supply chain from COVID-19 impacts seems to indicate the great dependence many space businesses still have on U.S. government spending.

Such a proposal will increase government influence in a sector that needs to be weaning itself away so that they become truly commercial. Unfortunately, few companies, including those run by aggressive “Silicon Valley” types, have been able to “walk the talk” and actually create commercial space growth in the global space industry. The data from the past few years seems to bear that out.

Even though the commercial segment seems to be taking the greatest share of deployments year over year through this April, it seems as if it has yet to pace government spacecraft investments in the U.S.