Military satellite market just a few years ago was one of the fastest growing segments of the satellite communications industry. However, a global economic downturn and de-escalation of conflicts in the Middle East and South West Asia coupled with changing warfighter requirements have had a profound effect on the future of military satellite communications.
Pressures to cut the U.S. defense budget by about US $ 100 Billion a year will certainly have an effect on the military satellite market. Already we have seen the cancellation of the Transformational Satellite Communications System (TSAT) program last year which would have provided the next-generation satellite constellation for the US military and its allies through the next decade and beyond.
Rebecca Cowen-Hirsch, President of Inmarsat Government Services, who previously spend 20 years in a senior capacity in the DoD procurement division, is bullish about the prospects of the military and government markets. “The challenge is that the military is your proverbial disconnected user. When they are unable to plug into a land line they are dependent upon satellite communications, the vast majority of which are provided by commercial satellite companies. There is therefore an increasing demand for connectivity in remote locations via satellite and that continues to grow.”
Cowen-Hirsch sees the growth continuing in the next few years, despite budgetary constraints. “The demand continues to exceed current capacity and now they (the military) are looking to leverage the commercial satcom sector to finding the right value proposition to ensure that the warfighter has the capabilities he needs when and where he needs it,” she added.
This was echoed by Bruce Bennett, Director of the SATCOM Program Executive Office of DISA (Defense Information Systems Agency) in a panel discussion at the recent SATCON Conference in New York on “Military Challenges in Theater.” He said that the military sitcom situation is characterized by having “not enough bandwidth and not enough interoperability.” He said that there will never be enough bandwidth and the challenge is “to effectively use what we have and to distribute it properly to those who need it.” Melinda Ratz, Commercial Satcom Assistant Program Manger for the US Navy acknow-ledged the budgetary and technical challenges faced by military and challenged commercial satellite service providers to “bring in innovation.”
The challenges are indeed daunting. Military demand will continue to grow, but budgets will be less, so it’s imperative that the commercial sector continue to innovate and provide solutions at less cost.
One innovative solution put forward by satellite operators are “Hosted Payloads.” Hosted payloads are dedicated transponders on commercial satellites leased to the military. It can save the military millions as it precludes the need for them to develop and launch their own satellites. A hosted payload on a commercial satellite can be leased for a fraction of the cost of launching a satellite on their own plus it offers the flexibility and redundancies available to commercial operators. It also reduces the risk for military planners associated with developing their own satellites transferring all of that risk to commercial operators. Intelsat and SES World Skies have active hosted payload programs.
The concept of Commercial Off-The- Shelf (COTS), whereby the military can take commercial products and adapt it for their use, has also been around for some time and its relevance has increased in the new military environment.
A recent Frost and Sullivan study emphasizes the importance of COTS solutions: “The next generation of technological development for military communications is expected to be greatly influenced by the goal of a fully interoperable solution, wherein data can be obtained from various sources irrespective of the solution. Network centric warfare (NCW), enhanced situational awareness and increased use of COTS technology are witnessing increasing technological development and funding activities.”
“Integration of existing technologies with new cutting edge technologies is further driving the research activities in this sector. The market for defense communications is likely to be supported by a number of demand drivers, notably the need for allied information advantages in large-scale operations such as those in Iraq and Afghanistan. The defense industry is entering into a new phase where huge R&D efforts are being concentrated on defense communications, as increasing number of defense establishments realize the need for empowering their defense forces with the latest communications technologies available,” said the report. The U.S. government and military depends for up to 80 percent of its needs on commercial satellite providers and this reliance is projected to continue according to Frost and Sullivan.
According to NSR's market research and forecast report, Government and Military Satellite Communications (GMSC), 6th Edition, users want more capacity and coverage as the gap between demand and transponder supply is growing, which will shift the market towards one of two solutions: proprietary or commercial systems. This gap should propel the commercial GMSC market alone from $3.5 billion in 2008 to $9.3 billion at the end of 2018, driven in large part by land-mobile narrowband units and revenues from unmanned aerial vehicles (UAVs) and communications-on-the-pause (COTP) services.
The conditions faced by warfighters today facing irregular forces dispersed in remote regions necessitate a different set of weaponry that require precise guidance and communications, according to Gary Hatch, CEO of ATCi Technologies. He sees the military relying more on UAVs and drones to flush out hidden enemies. These new weapons require sophisticated guidance and communications systems that satellites are best suited to provide, said Hatch. Perhaps the greatest impetus for continued military bandwidth demands are the individual warfighters and service personnel who are very much tech-savvy than their predecessors. Young military personnel have come to demand the same level of access speeds and reliability that they are accustomed to in civilian life.
In sum, government and military demand for satellite communications will continue to grow in the next few years. However, their requirements are changing and the demands require innovative and cost-effective solutions. It won’t be “business as usual,” but satellite companies should be used to that by now.
-------------------------------
Virgil Labrador is the Editor-in-Chief of Satellite Market and Research based in Los Angeles, California. He is the author of two books on the satellite industry and has been coering the industry for various publications since 1998. Before that he worked in various capacities in the industry, including a stint as marketing director for the Asia Broadcast Center, a full-service teleport based in Singapore. He can be reached at virgil@satellitemarkets.com
