After the busiest week ever in satellite launches, over 60 satellites were inserted into orbit with two launchers carrying more than 20 microsatellites each, it is clear that the industry is witnessing a revolution. Nano (1-10 kg) and microsatellites’ (10-100 kg) performances are evolving at a really fast pace: key indicators (resolution, downlink rate…) improve more than an order of magnitude per decade. This is empowering microsatellites to perform increasingly challenging missions beyond technology demonstrations with multiple operators creating commercial applications based on miniaturized satellites. Despite the increasing demand for launch opportunities for microsatellites, incumbent launch providers are ignoring this trend with oversized launchers (which actually makes sense from their perspective since microsats are not the mainstream solution yet, are not the most profitable products and a dedicated microlauncher won’t compete with them). However, the clear oversupply in launch capacity makes microsatellites sacrifice key attributes like orbit selection or launch date definition hindering their operability. This problem would be solved with a dedicated microsatellite launcher.
Figure 1: Level of satisfaction for microsatellites with current launchers available and a microlauncher from 0 (inexistent attribute) to 6 (oversupply)
The premium price a customer is willing to pay for a particular attribute is directly related to the level of demand of this attribute. Performance oversupply initiates a change in the criteria (differentiating attributes) used by customers to choose among competing offers. This change in criteria is usually modelled by the buying hierarchy, which typically follows four phases: functionality, reliability, convenience, and price. The oversupply in functional attributes (payload capacity and orbit) makes microsatellites underserved in other attributes. While some microsatellites, especially those for technology development and educational purposes, prioritize functional and price attributes, other operators like commercial agents may require other attributes like schedule or orbit selection to be met.
Functionality: Payload Capacity and Orbit Altitude & Inclination
There are three main interrelated attributes that determine the functionality of a launcher: payload capacity, orbit altitude and orbit inclination. There is currently a clear performance oversupply in microsatellites functional requirements. There is no commercially available dedicated launcher for nano/microsatellites. Microsatellites must sacrifice attributes in other levels of the buying hierarchy to get into orbit.
Reliability
With current levels of technology, miniaturization acting in favour of the development of a microlauncher, the proliferation of small and medium sized rockets for third markets, and the possibility to use simpler technologies like pressure-fed instead of pump-fed rockets, it doesn’t seem unreasonable to think that similar levels of reliability can be achieved.
Convenience: Orbit & Launch Date Selection and Constellations
The increasing complexity of the missions performed by microsatellites makes some attributes key for their development. There are several projects aiming at building constellations of microsatellites or other projects requiring precise orbit insertion. Flying as secondary payloads or in multi-manifest launches, microsatellites either sacrifice the convenience of selecting the orbit and the launch date or need to pay the extra cost of being launched with an oversized vehicle.
Another very interesting convenience advantage of microlaunchers is the fact that microsatellites won’t have to bear anymore the delays of bigger payloads. While it might not be a big issue for educational or scientific payloads, it certainly is a problem for commercial companies developing microsatellites and delaying their developments. Skybox Imaging and Dauria Aerospace suffered this in their own skin by having to hitchhike in the Soyuz launch for Meteor-M2 with multiple delays.
There are some other attributes that might be valuable for particular customers. Responsiveness can be important for military uses or for replacement of malfunctioning satellites in constellations.
The existing oversupply in the functional attributes (lifting capacity and orbit inclination and altitude) translates into underserved needs in the convenience attributes.
Price: Total Project Costs and Scalability Issues
In the general satellite industry, launches are not a mission cost driver. However, this is not the case for the nano/microsatellite segment. The development cost of a microsatellite is in the $10 millionorder of magnitude while launch cost in the $1 million order of magnitude. Despite the fact that many microsatellites developers work with constrained budgets and are price sensitive (universities), some of the clients might be willing to pay a premium (commercial operators or military organizations) for the additional attributes offered by a dedicated launch. There are some preliminary studies stating that dedicated launchers could offer prices comparable to the current secondary payload market: ALASA targets to put 50 kg of payload to LEO for $1 million.
Risk: Reduction and Distribution of Risk
There are other cost-risk factors that may influence the premium price requested for a dedicated launch. Launching an entire or a significant part of a constellation in a single flight presents important risks. Nothing better than a staged deployment to check the performances of a constellation of satellites under real conditions. Putting a great part of the working assets of a satellite operator company in a single launch (mostly out of control of the satellite operator) is certainly a risk for the enterprise. These factors are directly related with the insurance cost and the premium returns investors would require for the extra risk.
Figure 2: The lower level of product performance requirements of miniaturized satellites for launchers is creating space for new value propositions
The increasing demand for complex missions performed by microsatellites together with the incapacity of current launchers to satisfy the convenience needs for miniaturized satellites creates a big market opportunity for dedicated microsatellite launchers.
by Lluc Palerm
Additional details can be found at Palerm, Barrera & Salas; MICROSATELLITES AND MICROLAUNCHERS – THE TANDEM THAT WILL DISRUPT THE SATELLITE INDUSTRY, IAC-13-E6.1.9. This paper is the winner of the Space is Business Competition organized by the International Astronautical Federation’s (IAF) Entrepreneurship and Investment Committee (EIC) in cooperation with the Space Generation Advisory Council (SGAC).
This article expresses the opinion of the authors alone; it does not represent the official positions of any organization or company, including Space Generation Advisory Council or the authors’ employer.
Commercial Space Project Group - SGAC 