SatNews

SVSW DAILY

TRENDS: Covid and AI are both worries

By Chris Forrester

Noel Rimalovski, MD, GH Partners, opened Day 2 of the Silicon Valley Space Week’s Satellite Innovation strand, and discussed Emerging Trends in Satellite Manufacturing, in a fascinating panel.  Mr Rimalovski polled the audience and 80% of respondents said they believed that the Covid pandemic was still affecting production and component lead times.

Col. (Ret) Dean Bellamy,  EVP/National Security Space, Redwire, said his experience would reflect the move towards smaller satellites and the past 5 years’ experience had shown how important it was that satellite manufacturers could depend on their suppliers in terms of reliability. Another trend was the expectation or even requirement for earlier milestone financial payments. 

Chris Winslet, GM, Blue Canyon Technologies, said his key trend was greater use of automation, and that cycle times were being helped and reduced dramatically. We believe in ‘smart automation’. This makes sense if you are producing many, many items. “But if you are frequently modifying your production then be careful and if possible work smartly as far as automation is concerned.”

John Borrego, VP of Production, Machina Labs, is already using large robots in its manufacturing processes and building its structures. He explained that aerospace engineers were a dying breed and automation was essential to fill the gap. “The pandemic forced business to change their business models because production of a component which pre-Covid took only a matter of weeks was still taking months and months. You need to change the way you are thinking and if possible remove the human element, but first you need to fully understand the overall process.”

Karolis Senvaitis, Dir. of Engineering Operations,  Kongsberg NanoAvionics is a business that is just 10 years old but he said that integration could be dangerous. “Vertical integration could mean that you would be taking all the responsibilities and risks. In many cases it was better to work with trusted partners.”  Automation must start with the design stage right through to the testing process. 

Tim Shroyer, CTO, CPI, builds ground stations, amplifiers and related equipment. “We build large structures, including those for Lunar traffic. “The trend we have noticed is a shift from Video to a greater variety of traffic to be handled. We have had to keep up with these changes.”  Shroyer said he was comfortable that most times CPI was highly competitive when it manufactured its own kit, “but not every time. You have to be flexible.”

The panel addressed the role of AI in the manufacturing sector, and Winslett said his firm was trying to understand the whole process but it was vital to be aware of where the production data was coming from. Senvaitis told delegates that he was cautious about AI and this was because of the trustworthiness of the data that was being used. “AI can interpret data incorrectly”. Borrego said they had a team of development engineers interpreting data prior to use in AI, but it was still very much ‘trial and error’ in how the data and the human interaction was made. “But at the moment we are still scratching the surface as far as AI is involved although every piece of data we have employed we store for future use.”

Capturing Ground System Market Share 

By Chris Forrester

Nathan de Ruiter, Partner & MD, Novaspace, chaired the SVSW session Capturing Ground System Market Share at the Mountain View Satellite Innovation conference stream. 

Ron Faith, President/CEO RBC Signals

Billie Sims, VP/Business Development, North America for Gilat Satellite Networks said that virtualisation was important. Having thousands of terminals deployed and upgrading them was frequently difficult. We need to solve customers problems especially those who want to move away from ‘black boxes’ to software-based solutions. 

Don Claussen, CEO, ST Engineering iDirect, agreed and said clients were increasingly interested in getting away from hardware and wanted to move away from the initial CapEx model, and instead want an OpEx model, paying as they grow their business. But the new platform has to incorporate the old technology with very much a seamless migration from one to the other. 

Aaron Hawkins, Director, Real-time Earth Ground Service, Viasat Inc.

Vertical Integration is vital – maybe

By Chris Forrester

Brooke Stokes, partner McKinsey & Co, chaired the SVSW session which examined Vertical Integration in the space industry. She explained that anti-trust compliance and scrutiny could often be a problem in some elements of vertical integration. 

David Gelerman, CEO, Spacebridge, said the name of the game was efficiency and the sort of integration that Starlink had employed very successfully was a perfect example. But everything had to be less expensive, whether user terminals, ground stations, satellites… The old-fashioned way was to build a satellite over 5 years. That has changed. End-to-end integration, if you are SpaceX is easy. But for others when you have to include gateways, terminals, and share revenues with local MNOs, it could be difficult. The combination of SES and Intelsat, two massive giants, because they could not see a success standing alone. They needed to be agile and saw greater potential by coming together.

Ryan Kelley, shareholder, Greenberg Trauig, said that regulations could not be ignored. As for integration itself, do you make everything in-house which means you can be self-reliant, but it could prove to be expensive. “But consolidation is inevitable in the industry. SpaceX is wise to continue offering launch activity to its rivals with open access and thus staying on the right side of the regulator.”

Pratish Shah, GM/US, AiTech, explained that you see a spacecraft’s backbone ideally was vertically integrated especially in a craft’s payload. “But do not ignore ROI,” he cautioned. Having reliable access to suppliers is crucial and in particular components like electronics and chipsets today and in the future. “In my view we need to bring chip production back to the US.”

Behzad Koosha, BD Lead for Space Architecture, Sidus Space, suggested that there were obvious challenges in some cases with the supply chain. Covid was a nightmare and it saw very real problems for the industry as a whole. 

Scott Rodriguez, VP/Government Programs & NASA HUNCH Program Manager, Voyager Space, said that when any discussion on Vertical Integration came up SpaceX was mentioned. But he stressed that NASA was very different, and operated with a very different model. SpaceX has good financial resources, and building components in-house is going to be impossible for most. 

Raising Cash for Space Industry Remains Challenging

By Chris Forrester

Silicon Valley Space Week was praised by Millbank’s partner Dara Panahy who said the conference sessions were now the benchmark and that going global was the next step for SatNews.

Panel chairman Panahy asked his colleagues during the Leveraging Capital in the Current Financial Climate session to give a snapshot of how they saw the industry today.

Mike Collett, Managing Partner at Promus Ventures said the construction of the market was very different today but perhaps was now ready to turn from a challenging recent past. “Things are being re-set but boards and companies can be out-of-whack in terms of valuation. Execution is key.” Promus was an early investor in Rocket Lab and was pleased with the 60-70 percent growth in revenues annually. “Hitting your milestones is vital, and we are seeing target timetables shrinking to 3-5 years instead of the 5-10 years that would have been normal a few years ago.”

Dr Ronald Epstein, MD/Aerospace & Defense at Bank of America Securities, said they were cautious especially ahead of the US election and uncertainty as to whether the Federal Reserve would cut interest rates and by how much. “There is still a lot of economic uncertainty around”.  He added that most of the quoted space businesses are owned by retail investors, not institutional investors. Space needs more institutional investors.

Tyler Letarte, Principle at AE Industrial Partners, said his portfolio was now seeing opportunities although they were still “scratching their heads occasionally” over valuations.  

Sita Sonty, Partner & MD at Alix Partners, said it was inevitable that businesses which were underperforming were under pressure. We’ve seen $200-$300 million per month [being invested] but Space was only a small fraction of this volume. “Performance matters” and the better ones have good sales engines. 

John Stack, Snr MD, head of A&D Investment Banking at B. Riley Securities cautioned that he expected some M&A activity for those players who were less successful. 

SpaceX was examined as to how it was disrupting so many elements, whether consumer, maritime and IFC. Mike Collett said SpaceX was extremely positive in his view, and should be watched as to how to build a model that works. Letarte said SpaceX was dramatically impacting the industry and was affecting how deals were being done in some sectors, and not always beneficially. Asked whether SpaceX could mount an IPO, Dr Epstein said he expected a positive response from the market. 

Standardization will deliver greater benefits

By Chris Forrester

A very high-level panel at SVSW and its Satellite Innovation strand brought the CEO of MDA (Mike Greenley), the head of OneWeb Technologies (Kevin Steen) and Frances O’Flaherty (CFO Rivada Space Networks) to discuss future strategies for ambitious satellite operators. 

Chairman Aashu Viramani (SVP/Cambridge Consultants) heard the panel agree that standardisation, and the ability to consider hundreds of satellites in an order book would lead to lower prices and even greater innovation for the industry. “We are already at about 10,000 satellites in operation, and it is likely to be 30,000 before long. How would this develop.”

O’Flaherty explained that Rivada’s objective was not so much in the traditional satellite market but in satisfying high-end clients whether governments, financial institutions and was very much focused on some specific niches with is high-speed optical connectivity. “We also need to increase utilisation of the capacity that’s already in place.”

OneWeb’s Steen said that his Eutelsat-owned LEO constellation of 650 craft in orbit but was not focused on individual consumers but in linking with the world’s telcos and run traffic for them and to them was hyper-critical to OneWeb. Steen said he was partnering with telcos although in the context of their own relationships with some key customers, not to compete but to aid the client.  He stated that the biggest ‘knot-hole’ was bureaucratic governments around the world, obtaining permissions for reception and operation and market access. “Early 2025 will see us put the final pieces in place which would give us complete global access”.

Steen said he was fascinated by the testing being done by the ‘direct-to-handset’ operators, although standardization will deliver greater benefits was key. 

Rivada’s O’Flaherty said that Rivada’s view was that some telcos were clearly in difficult positions. “Our route to market is not to build a 10,000 strong sales force but to work with the carriers to expand and aid their services. We offer mission critical high-security services where the client demands total reliability.” 

Greenley amplified MDA’s approach where he stated that the move to standardized satellites was moving rapidly because operators recognised that Standardization will deliver greater benefits delivered a lower price and a much faster move to market, and products that could scale to a number of satellites per day was an obvious advantage. He added that the more that a standard product could be used then MDA as a manufacturer would allow it to get ahead of market demand, “and we are already seeing the benefits of this approach”. 

 D2D still facing challenges

By Chris Forrester

Direct-to-Device (D2D) is the hottest of hot topics and a panel discussion at Silicon Valley Space Week’s Satellite Innovation event brought the challenges and opportunities into sharp focus. 

The panel, chaired by Lisa Dreher (MD/Guideforce) examined today’s status of the D2D sector, and where it was headed and in particular successfully monetising the D2D technology and its target $30 billion of reported potential business. She mentioned the ‘missing’ players – at least as far as the panel was concerned – and specifically mentioned Starlink and AST SpaceMobile.

Kevin Cohen (Commercial Director, Direct-To-Device, Viasat Inc.) and which operates in L-band, said Viasat was creating new businesses and the potential of hundreds of millions of devices connected via satellite. He said that spectrum is key and thus there were possibilities for competitive cooperation between operators. “We also need open standards, and we are pushing for this very heavily.”

Greg Pelton (CTO, Iridium Technologies) said that one element that could not be ignored was that users would not be getting a 5G experience from satellite, and it was at the moment it was uncertain as to how consumers would react to satellite-delivered connectivity. “Can the investments needed be justified by the revenue prospects? We are now finding that Moore’s Law is impacting satellites, which is encouraging. Non-geo operators need access to worldwide spectrum because their satellites move. We have that access, but we see impediments for some operators in getting to profitability.”

Pelton also said that regulation permissions was far from proven. “The past saw terrestrial spectrum and satellite spectrum and never the twain would meet. I think it is going to take some years for these problems to be resolved. Will it just be emergency use, from space?”

Vijay Krishnan (VP/Strategic Partnerships, Skylo Technologies) said that regulation, spectrum access as well as technology each needs to come together. There’s another problem: think of those markets where users are paying less than $5 per month for their cellular use. It can be even lower in some African nations, and these challenges are very different to the [wealthy] Americas and Europe. Minimising friction with MNOs is critical. We want to augment their capability.” 

Rich Pang (Head of Business Development, Amazon Kuiper Gov’t Solutions) explained that Kuiper was a little late in launching its rockets (now scheduled towards mid-to-end January 2025). But he also said that Amazon was not initially targeting direct-to-consumer with its first-generation offering. “The easier we can make the transition from the various networks the better we’ll be placed.”

SES: “We Can Collaborate”

By Chris Forrester

Mohammed Marashi (SES, SVP/Future Business & Innovation) delivered a fascinating Keynote at the SVSW and its Satellite Innovation sessions, explaining the might of SES which carries 6400 TV channels to some 363 million viewers in 130 countries. But the fastest-growing segment at SES was non-video in particular mobility and data and SES is building rapidly on these changes.

Marashi said that SES was now investing in start-ups, and was co-developing new products and working with consortia on these developments and also collaborating with its existing customers on new developments. He described these developments as being “radical” for SES, and even “disruptive” and the intention was to accelerate how things were evolving. The old view at SES even in terms of the O3b fleet came from its experience with geostationary satellites. In reality we needed to be thinking more of the O3b fleet as LEO craft.

He showed delegates an example of one of these collaborations which was with French news agency AFP and how SES and its 360 offering was speeding up the distribution of its video news feeds. AFPTV was now using an SES-developed interface and designed to keep AFP as the world’s Number 1 video news agency and making the most of its platform and boosting the features available for AFP.

“Key,” he said, “was working closely with our customers, and asking how we could help them improve their service, whether using geostationary, O3b/mPOWER and its equatorial RF Relay Service for data.”

“We are changing our approach, in design, procurement and accelerating our approach to next-generation needs and constellations. Our aim is to reduce the ‘cost/bit’ and how we can develop these technologies for multi-orbit or multi-band usage. We recognise our intention is not going to be straightforward and would need collaboration.”

He showcased the SES ‘EAGLE-1’ prototype Quantum key Distribution (QKD) LEO satellite, which is being developed with help from the European Space Agency and some 20 European partners including TESAT which is responsible for developing the and integrating the QKD payload. 

EAGLE-1, which he described as a radical solution, is planned to launch in 2026.   The EAGLE-1 project is co-funded by ESA, the European Union (EU), the space agencies of Germany, Luxembourg, Austria, Italy, the Netherlands, Switzerland, Belgium and the Czech Republic, as well as the industry.  It is expected to have a 3-year validation period once launched.

“Innovation is in SES’s DNA.” Stressed Marashi. “We are happy to discuss further collaboration – under NDA terms – and we are seeking to accelerate our innovation and work together with the industry.” 

Marashi said it was too early to say how the collaboration and integration with Intelsat was progressing. But he did not see any difficulties in the process. 

However, in response to a question, he said SES could be happy to consider an expansion of the EAGLE-1 QKD LEO scheme, providing the technology was viable and very much provided it made financial sense. 

MDA Space: There’s probabilities for multiple new Space Stations

By Chris Forrester

Mike Greenley, CEO at MDA Space explained that the Canadian-based company was now seeing revenues of $1 billion annually. He delivered a fascinating Keynote at SVSW, and which covered multiple topics and which gave a remarkable insight into MDA’s current strategy.

He said: “We are experiencing rapid growth. We are experiencing 25-30 percent growth and see that continuing at that rate over the next few years. We are enjoying a good run.”

“The statistics suggest a $1.8 trillion global market, but the Chinese view the space opportunity as 5 to 10-times larger than we in the West,” he told delegates at the Mountain View event.

“But today there is considerable transition, from sole government customers to a greater commercial growth and this is representing huge growth opportunities. Almost our entire pipeline is now commercial. The ISS will go out of use in the next 4-5 years but we have three or four new space station suggestions to look at. But there’s also a closer relationship between government and commercial, and where government agencies are buying all aspects of commercial infrastructure. This includes military activity, and technologies are being shared.”

“Innovation is accelerating. Launch, and the cost and capacity of launch is tumbling. The level of professionalism at SpaceX is impressive, and these trends are helping hugely and driving much of the current growth.”

“We are transforming from 25 years of government and government cash for the ISS to privately funded space stations and we believe this to be extremely powerful. There will be space tourism, but there’s much, much more. Even Hilton Hotels are working with one orbital space station project. The prospects for Medical activity in space and the probability of space-based industrial parks is very real.” He also said he thought there was enough demand from the world’s 90 Space Agencies to support multiple space stations. There will be multi-year programs to send astronauts to space. Industrial applications will also grow and in particular exploitation of zero gravity. A hotel developer can spend $2 billion to build a new hotel, or it could invest $2 billion in a space-based hotel. 

“Think about this: that about one third of the planet’s people, who currently have no access to communications, will find connectivity and the changes this represents are very powerful indeed.  Constellations also mean we can build new production lines and going from one satellite a week to a year from n ow to producing two satellites per day.  The discussions we have with our constellation clients usually means a conversation with follow-on craft, about next-generation satellites and allows us to stand on the work and investment we have done.”

“We can also see the probability of our cellphones moving from inside WiFi, through 5G and 6G and satellite-based connectivity to absolutely anywhere on the planet. It is the same for automative activity, and agricultural activity for satellite communications.”

Greenley was asked about supply chain problems, and he said that post-Covid was still challenging but he tried to incorporate timings. “Cashflows are sometimes more difficult with customers, but our evaluation of suppliers is now more important than ever.”

He explained that In-Space orbital servicing was interesting even though 10 years or so ago they backed away from the opportunity. “There’s going to be some work there. The Military side of in-orbit servicing is probably a stronger market.”

EO: “The economics are key”

By Chris Forrester

The snappily-named ‘Servicing Diverse Customer Needs with Next-Gen EO and Geospatial Intelligence’ panel was part of SVSW’s Satellite Innovation 2-days of panel and keynote sessions and certainly brought delegates into the auditorium. Moderator Dr James Crawford (Chair and CEO at Orbital Insight) said the panel would be focused on Earth Observation (EO), and what was new and exciting.

Dr Crawford said the Ukraine war was a wake-up call for nations who realized they did not have their own access to EO and this was driving demand for both hardware and software.

He asked his panel: “What’s new in the past year? What has changed, and ongoing what might we be discussing a year from now?” The answer was that optical transfer was growing, although there were concerns about the costs of orbital relays and the efficiency of optical reception direct to Earth was still seen as potential problem.

Alan Greenberg (Co-founder/CEO at Loft Orbital) said that outside the usual major sovereign states, the smaller nations were no longer wanting to buy data in, but in the past year they wanted their own access to space and data. 

Dr Shay Har-Noy (CEO/Edgybees) said the past discussions tended to be focused on whether this or that development would work. “That has changed. We are now talking about accuracy and specs and predictability and trust in the data. There was also a definite move so that even countries who would be seen as close compatriots were developing their own solutions.”

Dr Alex Saltman (CEO/GeoOptics) said today it was all about more capability on more satellites. “Satellites can gather 5-times more data than they can download. But if we can process while in orbit then there will be more changes. We work in the weather space and if we don’t deliver within 2 hours then we don’t get paid!” He explained his view that the world is waking up to the need for their own solutions. 

Frank Backes (CEO/Capella Space) said he saw both sovereign requirements and ‘new’ markets only growing and demanding more data. “The question of whether there should be ground-based processing or processing while in orbit, but both will be explored and developed.”  He told delegates that President Biden’s recent announcement of an agreement with the United Arab Emirates was an indicator that the US government was becoming much more cooperative with the commercial space industry. “Our job is to get data into the right market, at say $50 an image, then we will have responses. It is no good and uneconomic if it is $2000 an image.”

Dr Crawford said that real commercial segment growth and revenue would come when consumers could be accessed more directly. The response from Dr Shay Har-Noy said there was real interest from the insurance sector and assessing fire risks. The same applied to property tax EO observations, but repeatable, dependable data at a practical price is key. 

SPECTRUM IS HOT, HOT, HOT

By Chris Forrester

Drew Svor (Partner: Sheppard Mullin Richter & Hampton) opened his panel session at SVSW’s Satellite Innovation by specifying the actual spectrum that businesses were interested in. “Everyone seems to be moving higher and further away from traditional Ka and Ku,” he suggested. 

Dr Diana Gamzina (CEO at Elve) said that some of these higher frequency banks were now ready for usage and qualification for performance had been carried out. Lower frequency band usage were done in steps, but people’s visions have changed and progress was now much faster. Planning and building usages beyond Earth was exciting.

Scott Patrick, (Exec. Dir. NTIA Office of Spectrum Management) said that the industry was in an exciting time, and he was especially interested in the 18 GHz bands. “The rule of thumb is that the FCC and NTIA are different, and there is always a need to protect existing incumbents.  Spectrum is in demand, access is in demand, and going forward we might not need spectrum allocation, for example. He praised GPS, “the greatest free gift to the planet” and the hundred and one spin-offs that GPS had enabled. “When cost structures change then innovation can follow quickly.”

Dr Whitney Lohmeyer, (Chief Technologist at the FCC’s Space Bureau) said: “We have to manage processes here at the FCC, but also at the ITU. The rules and allocations of spectrum can change over time. If we can think creatively and not just look at the table allocations this would be helpful. This includes geographic variables and looking at future growth opportunities in some markets.” 

However, Lohmeyer stressed that coordination was a challenge and sharing was one option, although realistically the players themselves will determine if sharing and collaboration was possible. 

This view was challenged by Dr Gamzina who did not anticipate much in the way of collaboration given the huge sums being invested in new spectrum and applications. 

Brian Barnett (CEO/Founder Sostar Space Co.) reminded delegates that his company were the first to place commercial WiFi into a Blue Origin spacecraft. “We are ready for the Moon, because everything will need WiFi whether on the spacecraft, the astronaut’s suits, the rovers and then inside and outside the Moonbase itself.”

Barnett added: “When we are on the Moon we will still be using Earth-based technologies. We are having to think again how we can leverage past knowledge and to do our best to solve the problems. Even if we put WiFi on the Moon the fact is that it will have to handle massive temperature variations, and we need to remember that people will need WiFi but it has to be able to re-boot itself, for example.”

Dr Lohmeyer reminded delegates about how space launch itself had changed dramatically over the past few years, and that today’s developments for satellite communications from and to a spacecraft was now a reality and funded by private cash from a number of players.  Yes, there were challenges but she saw them being solved.