Low GEO Orders are Here to Stay. Here’s What that Means.
Commercial geostationary communications satellites, long the lifeblood of the industry, remain chronically below historic order levels to the point where changes in how the sector functions are becoming apparent.
By our count, there are approximately 300 full-sized GEO comsats in orbit. Using a conservative assumption of 17.5 years for an average lifetime, operators would need yearly “replacement orders” of ~17 – nearly twice the order rate since 2015. What does this mean for the industry? Our takes:
Abandoned plans. Satellites, once slated for replacement, are being reevaluated. Operators generally keep quiet when they plan to let satellites retire (i.e., run out of fuel) without replacement plans, but at the rate renewals are happening, this is an eventuality. In some special cases (like Eutelsat’s Hotbird series), operators can replace multiple satellites with fewer. But the slump in GEO orders has persisted for more than six years now, meaning some plans have simply been shelved.
More life extension. Operators that let satellites retire (i.e., run out of fuel) without replacements risk losing valuable orbital slots (think parking spots) in GEO. Those not ready to pay $200-500M on a new satellite are increasingly turning to life extension through in-space services companies. Intelsat has been leading this trend, having signed deals with Northrop Grumman to extend the lives of four satellites. Intelsat also has agreements with startups ClearSpace of Switzerland and Infinite Orbits of France that could turn into additional life-extension contracts.
Pivots to LEO/MEO. The “Big Four” operators – Intelsat, SES, Eutelsat and Telesat – have considerably reduced their GEO order rate as they plan or implement constellations in LEO or MEO. As global operators that often purchased one to three GEO satellites a year, their reduction in buying appetite has had a large dampening effect on the manufacturing market.
Orbital paralysis. Regional operators typically lack the deep pockets needed to fund large LEO or MEO constellations, but don’t want to order satellites that struggle to compete against these new systems. The result is steep decline in regional satellite orders as operators deliberate on how to deploy satellites that can withstand the accelerated pace of obsolescence driven by bigger operators.
Small GEO resurgence. Of the six GEO orders placed this year, five were for satellites weighing less than 1,000 kilograms. Two of those orders, to Astranis, have design lives around eight years – half that of a typical GEO satellite. These smaller spacecraft are cheaper to build and launch, and have smaller coverage areas, which can make for easier business plans. Satellite operators have shown fickle interest in small GEO satellites the past several years, but 2023 is the first time they constitute a majority of GEO orders.
Will large GEOs comsats ever return to an order rate of 10 or more yearly? Quilty Space expects such an increase will remain challenging for the industry near term. Operators are evaluating a wide range of strategies while seeking to better understand the impact of LEO and MEO networks.
SOURCE: www.quiltyspace.com