We're finally near the end of 2021 and for most people, it couldn't come fast enough. It's been a very challenging year not only for the satellite industry but for pretty much the global economy.
As I've pointed out in several previous articles in this publication (The Satellite Industry in a Post-Pandemic World," September 2021 and The Satellite Industry in the Time of Covid-19, April 2020), some sectors may not have been impacted by the pandemic as others, but impacted nonetheless.
Pandemics are Here to Stay
So as we look at the major storylines of 2021, perhaps the most significant of all is the ongoing global COVID-19 pandemic, now going on for nearly two years since the first cases were detected. As we go to press, the new Omicron variant merits serious concern, but there are many positive developments that give cause for optimism, not the least of which is high vaccination rates in key countries and new anti-viral drugs that can prevent the more severe effects of the virus. For the satellite industry, most projections that it will fully recover from pre-pandemic levels in 2022 followed by further expansion thereafter. In the meantime, the industry still needs to cope with COVID-related issues such as supply chain disruptions and travel restrictions., among others. The world will never be the same again. The pandemic has changed the way we do business in profound ways. The key is not so much plan for a post-pandemic scenario, but instead learn from the experiences of the past two years and institute changes that will make your company pandemic-proof.
Here are other key storylines as I see it from 2021:
Industry Consolidation
It's been a busy year for Mergers and Acquisitions (M&As) in the satellite industry. Just in the month of November there were eight major acquisitions. The biggest was the announced US$ 7.3 Billion purchase of Inmarsat by Viasat. The combination of the two companies creates a powerhouse in key vertical markets such as mobile services, aeronautical and maritime, among others. The combined company will have spectrum licenses in Ka-, L-, and S-bands and a fleet of 19 satellites currently in service, with an additional 10 satellites planned in the next three years. Viasat previously acquired Rignet, a major service provider in the oil and gas business.
A key enabler of these M&As are the Special Purpose Acquisition Companies (SPACs) which have facilitate these M&As as well as funding startups like Momentus, Spire Global and BlackSky among others.
As a few companies get bigger and gain more market share, smaller companies will face a more competitive environment which leave them vulnerable for acquisition. So, look to see more M&A activity in 2022 as the industry consolidates.
Nearly 3 Billion Still Have No Internet Access
In November, the International Telecommunications Union (ITU) released a report that revealed that an estimated 37 per cent of the world's
 |
| After many years of eager anticipation, Virgin Galactic finally launched it's first commercial sub-orbital flight on July 11, 0221 with founder Richard Branson and five other pasengers. |
population–or 2.9 billion people–still never used the Internet. This bodes well for satellite companies, especially the new Non-Geostationary Orbit (NGSO) constellations who are aiming to bridge the digital divide. It also presents a challenge since 97% of those who have no access to the internet are in developing countries. What's significant about this figure is that hasn't changed much since the early 2000s, when a certain satellite startup called the "Other 3 Billion" aimed to close the gap.
Some satellite operators have actually made it their mission to connect the unconnected. Satellite operator Kacific has made some inroads in the Asia-Pacific region with their all Ka-band satellite Kacific-1 and another satellite planned in the next three years. But with nearly three billion unconnected, clearly much more needs to be done to bridge the digital divide,
New Technologies
In April this year, A seven-company consortium led by Airbus Defense and Space announced a plan for an in-orbit satellite factory that will assemble a satellite in space. This manufacturing in space concept follows many other innovations introduced in the last few years such as in-orbit servicing, software-defined satellites, among others that will fundamentally change the way satellites are manufactured, launched and operated.
Space Security
On November 14, Russia used an anti-satellite weapon (ASAT) to destroy a retired satellite, Cosmos 1408. The event caused over 1,500 trackable pieces of debris in space which poses a hazard to existing orbital assets for decades to come. The destruction of the satellite, which was reminiscent of a similar operation by China in 2007 with one of their own satellites, was widely condemned internationally. Blowing up a satellite poses a serious security risk for existing satellites as well as the concern for the growing problem of space debris.
Space is increasingly getting crowded. In 2019, there were around 2,200 operational satellites. In 2020 alone, some 1,300 satellites were launched and another 1,400 so far in 2021--mostly Low Earth Orbit (LEO) satellites. This means that the number of satellites in orbit has more than doubled in just the last two years with thousands upon thousands more launches planned in the coming years.
As satellite play a very vital role in societies where many essential services depend on it, their security and safety should be a primary concern. International condemnation of ASAT activities is not enough. There should be serious sanctions against ASAT activities or better yet a permanent ban.
Space Tourism Takes Off
On July 11, 2021, Virgin Galactic launched it's first commercial sub-orbital flight with Billionaire founder Richard Branson and five other passengers on board. This was followed by Blue Origin's successful flight with Billionaire Jeff Bezos just nine days later. SpaceX, meanwhile sent four civilians on a three-day orbital mission in September. By the end of the year, there were several other sub-orbital flights that followed, making it seem that it will be a regular occurrence in the coming years.
The high profile space flights carrying media-savvy Billionaires generated widespread interest in space among the general public. Space has always been cool, but it's even hotter now as it fills the headlines with the increasing competition among the Billionaires to one-up each other in space. This increased interest can only provide dividends such as more people getting into the space industry as well as influx of investments in the sector.
It certainly is an interesting time to be in the space and satellite industry.
----------------------------------------
Virgil Labrador is the Editor-in-Chief of Los Angeles, California-based Satellite Markets and Research which publishes a web portal on the satellite industry www.satellitemarkets.com, the monthly Satellite Executive Briefing magazine and occasional industry reports called MarketBriefs. Virgil is one of the few trade journalists who has a proven track record working in the commercial satellite industry. He worked as a senior executive for a teleport in Singapore, the Asia Broadcast Center, then-owned by the US broadcasting company CBS. He has co-authored two books on the history of satellite communications and satellite technology. He holds a Master’s in Communications Management from the University of Southern California (USC). He can be reached at virgil@satellitemarkets.com
