Evaluating SES’s case for a proliferated MEO constellation
SES has long dreamed of a large constellation in medium Earth orbit, but an Oct. 21 presentation by SVP of Future Business & Innovation Mohammed Marashi was the most forceful evidence that the company is shifting from contemplation to action. Speaking at the Silicon Valley Space Week in California, Marashi detailed an evolution of the company’s O3b constellation that borrows heavily from the principles of LEO networks.
SES’s third generation of O3b, tentatively slated for 2028, would expand the equatorial network to a global one, while also providing a lower cost per bit, faster refresh cycles, and improved resiliency, per Marashi. So strong is SES’s conviction around the Gen-3 constellation that Marashi said it “will happen with or without IRIS2,” the European Commission’s multi-orbit network that could partially finance the next iteration of O3b.
Marashi’s talk only described the Gen-3 O3b at a high level, without specific targets such as satellite mass or design. No number of satellites was given either, though an accompanying visual graphic suggests a constellation of around 150 spacecraft.
Risks:
Heavy capex lift. SES announced in April that it was acquiring rival Intelsat for $3.1 billion – a move that will more than double SES’s GEO fleet but will also boost leverage to an uncomfortably high 3.5x. SES had indicated that the (post-merger) leverage would narrow to 3.0x over the next 18 months, but adding a megaMEO would likely require incremental capex of $500-$700 million on top of our ~$700 million forecast (2026-2028).
Lagging terminal strategy. Despite SES’ 2018 investment in three flat-panel antenna manufacturers, O3b customers are still largely dependent on dual parabolic tracking antennas that cost multiple six figures and require a small basketball team’s worth of people to install. By contrast, a Starlink enterprise terminal costs $2,500 and can be carried/installed by a single worker. An improved Gen 3 constellation with no improvement in terminal options may be no improvement at all.
Distributed manufacturing. Rather than selecting a single prime contractor, Marashi floated the concept of selecting multiple satellite manufacturers and awarding contracts in batches, similar to the Space Development Agency’s PWSA tranches. This nontraditional approach would increase supply resiliency but could result in slower deliveries and increased costs due to the lack of scale manufacturing.
Rewards:
Hitting the accelerator. Marashi is right about the need for industry to move faster than it has in the past. SpaceX’s Starlink network grows bigger and better every year, while GEO (and MEO) satellites stay largely unchanged. It's not an exaggeration to say today’s greatest satellites will be tomorrow’s Blackberry phones. Only continuous investment in new technology will prevent today’s leaders from being out-innovated.
Safety in numbers. SES’s legacy O3b satellites, some of which are around a decade old, were built much like GEO satellites, just put in a different orbit. Per Marashi, the old O3b network had redundancy built into the satellites via duplicate components, but not the safety in numbers that large LEO constellations rely upon. A truly proliferated MEO constellation should offer many of LEO's advantages with affordability more closely resembling GEO. This is especially important given that half of SES’s Networks business is government customers (75% U.S.), and defense agencies have taken a very strong interest in proliferated networks like Starlink, OneWeb, PWSA, and Kuiper.
Going Global. Operating from an equatorial orbit, the Gen-1 O3b constellation provides coverage to 50 degrees latitude, and the Gen-2 mPower system is adding 13 satellites at a 70-degree inclination to expand geographic coverage. Adding Gen 3 satellites to a polar orbit will enable 100% global coverage, allowing SES to capitalize on polar aviation routes and the DoD's growing interest in the arctic region.
SOURCE: https://news.satnews.com/2024/10/21/ses-we-can-collaborate/