Space is not dead

For some periods of this year, I began to feel a sense of sadness that the open doors of endless possibilities for business in space are closing. To me at the time, launch seemed like an established case, entering Starlink’s market gave not much sense and the question of “how exactly do you plan to outcompete Planet” just offered itself. The small reminder of services will then be hosted at a few payload-hosting satellites and that’s about it — case closed. Even as bullish on the space business opportunities, I felt the struggle to find revenue-producing business models outside ever risker moonshots.

Well to me, and everybody out there, I have good news. The sun is shining and bright is the day. As I continue crunching numbers, listening to sharp people, reading and writing — I came out as optimistic as before. This article goes through a few stats and concepts to back it up.

Transformation 2.0

If you would open some Bryce report — they identify basically three revenue-producing areas in the satellite part of the space economy — Satcom, EO and GNSS. I want to claim that each of those areas goes through a substantial change — in case of satcom perhaps a second-degree one.

Broadband, the elephant in the room, is for sure moving away from traditional GEO satellites towards megaconstellations, but I think there is one trend largerĺy unpronounced — I call it Megaconstellations 2.0. Bear with me.

For a while, let’s assume Starlink as the only operation megaconstellation up there. Now — I think (based on what other people have to say) that Starlink has three issues, which opens the field for new broadband projects.

Starlink is expensive. To achieve the holy grail of Satcom industries — the notorious “other three billion” — Starlink would need to get much cheaper — by orders of magnitude to address the needs of developing countries and at least simple extrapolation does not quite get there. Starlink has a capacity constraint. While it has been predictable, recent measures only serve as a reminder that you can get in only as much capacity, which constrains the growth opportunities in densely populated areas which axiomatically represent a majority of addressable markets (Yes, I realize the logical catch of inverse correlation between population centres and target segments of the population. Either way, it shows a constraint on a segment that is willing to pay however Starlink is priced). Starlink is a part of SpaceX led by Elon. Which — as much as admire Elon’s legacy — can lead to a range of problems of cash supply drying, regulatory crackdown, bankruptcy due to Starship/Mars settlement, presidential ambitions or simply poor unit economics of Starlink.

So, as Starlink proves the way but faces issues, investor interest suggests there is a belief for a second generation of broadband projects (post-Kuiper/Starlink/OneWeb). I’m thinking E-Space, Mangata Networks, Rivada, Aalariya, Apogee Networks and so on. Renewed investor interest, benefiting from multi-orbit architecture and possibly a well-developed business strategy can pull this off. Paradoxically, Mangata and Apogee could help overcome a part of Starlink’s capacity constraint — and appropriately price it.

A few weeks ago I tweeted that O3b is the Paypal mafia of the Satcom industry. (I will refer back to O3b thrice more in this humble two-page article). In fact, OneWeb, Rivada, Mangata and E-Space management teams all were at SES at some point — the o3b remains an ambitious goal and far from over.

Then there are two companies which will get their say. I don’t like AST, but it wouldn’t be fair not to list them. Contrarily, I’m a big supporter of Astranis — not an expert on their pricing structure, but bullish they could really deliver o3b + I like their business model of working with traditional operators, rather than against them.

Two areas I don’t know enough about are the whole software-defined landscape and the user terminals area — once I make up my mind you will know.

Not staying stuck with Satcom, EO is leaping forward with new bands, sensors and business models (very excited about MuonSpace). New GNSS is underappreciated in my view — both self-standing LEO PNT constellations and using alt sensors to augment current GNSS signals. I find the vulnerability and propensity of GNSS to interference extremely worrying. Xona Space Systems is probably the coolest company out there as I see it. I’m quite biased but haven’t heard much from TrustPoint and DKK positioning, two competitors I’m aware of.

So to summarize this first finding, the three most significant areas of satellite business offer enough space for new companies in second and third generations. Space is not dead.

Launches till the end of the year

I sadly don’t remember who to credit — but somebody at ECSL or WBSW made a good remark that with the clearly identifiable milestone of spacecraft launch (and signal reception) the space industry is at least to some degree transparent. Even in the six weeks by the end of the year, a handful of new rocket vehicles will join the stage — Relativity’s Tarran, Agnibaan of Agnikul Cosmos and as Blaine Curcio well pointed out — also Zhuque-2 of LandSpace. As a true wannabe Norwegian, I’m awaiting the most the first Spectrum launch of Isar Aerospace from Andoya.

I think the biggest question to address is whether the supply surge will — as economists would distinct — lead to market creation or diversion. Contrary to over repeated annoying cliche, I don’t quite think the price decrease is the cause behind what we see happening in space now. But the number of new projects to premiere on orbit is ever-growing, so let’s assume the new launch vehicles will positively contribute to the trend.

Digging into the smallsat launches for the third year in a row, I’m noticing the “other” part of the pie growing. I usually count only big rideshares and subtract megaconstellations and Chinese/Russian/classified satellites. Historically, there would be 50/50 split between EO and IoT, with the rest filled by component testing missions. This year, tho, the “other category”, like RF sensing, AIS, ADS-B and perhaps most importantly various weather-related sensors. I find it super positive news.

At the beginning of the article, I referenced payload hosting services — I’m a big fan of what Spire and Loft are doing, mainly in bringing in non-space customers. Engaging in many conversations, I don’t believe they will rule the world mainly due concerns of pricepoint and unique orbit occupation.

Oh gosh there is so much more to write about. For now, let’s keep in mind that 1) hosted payload won’t solve everything 2) in three core segments there are three core transformations 3) the “other” category is growing for the benefit of us all 4) exciting launches to watch till the end of the year. Or in one line — Space is not dead.

Next time — let’s dig into what happened this week in telco, building a sales machine, growth hacking for space startups, direct to cellphone marketsize, classification of the space industry and strategic decisions of established space corporates.