Stability returns to comsat market: orders are expected to remain in the low twenties for the next few years.

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The 5th World Symposium on Market Forecasts for the Satellite Business, organised by consulting company Euroconsult in Paris on 3 September, was the occasion for satellite manufacturers, satellite operators and launch service providers to evaluate the prospects for the telecom satellite market for the period 2007-2011.

Thales Alenia Space believes that the volume of business will stabilise around 20 satellites per year on the open market, plus five "captive" satellites. For 2006, the company forecasted 23 and 3 satellites, respectively, while orders were actually logged for 29 and 3 satellites. The five-year forecast has been revised upwards from last year. In 2006, the total market was estimated at 109 satellites (40 small, 55 medium/large and 13 very large). This year the total has jumped to 124 satellites (49 small, 56 medium/large and 19 very large). The major differences stem from an increase in the number of small satellites on the captive market and the number of very large satellites on the open market.

EADS Astrium sees a total market of 110 geostationary satellites over the five-year period, a potential market of $12.5 billion (+15% compared with last year). This represents a total of 4,800 new 36MHz transponders to be built for an estimated capacity requirement of 12,000 transponders in 2014 (including 80% in the C and Ku bands).

Euroconsult executive vice president Pacome Revillon predicts that 20-25 geostationary comsats will be launched every year through 2016. That total does not include renewal of the mobile services constellations (Globalstar, Iridium, Orbcom, etc).

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Sea Launch was grounded for five months during the first half of the year, following the explosion of the Zenit launch vehicle on the launch platform on 30 January. Return to flight was achieved on 29 June with the successful lift-off of a Zenit-2 from Baikonur. The Sea Launch Failure Review Oversight Board (FROB) agreed with the interagency CIS Joint Commission that the launch anomaly initiated within the RD-171M LOx turbopump as the result of a metallic object becoming lodged between the pump's moving and stationary components. This object ignited and burned as a result of friction-induced heat. The combustion of the object set off a string of events that led to the destruction of the LOx pump, RD-171M engine and ultimately the Zenit 3SL.

The damaged blast deflector on the Odyssey platform has been replaced and repair work was scheduled for completion during the month of September. The next launch is scheduled for October, carrying Thuraya-3, followed by a second launch in December. The inaugural mission of Land Launch is set for March 2008, with Amos-3. A total of four missions are scheduled for 2008--four for Sea Launch and three for Land Launch.

According to Sea Launch president and general manager Robert Peckham, the company hopes to subsequently settle into a cycle of one launch every 50-55 days. The company also plans to introduce small modifications to the launcher that will boost payload capacity from 6.1 to 6.3t. For now the company has a backlog of 10 satellites for Sea Launch, and six for Land Launch.

In anticipation of the accelerating launch rate, the Yuzhnoe plant in Dnepropetrovsk is ramping up production in order to meet demand for 5-6 Sea Launch and 3-4 Land Launch missions per year from 2009 onwards. The company has only "lost" one payload (Spaceway-3) in the wake of the January failure; the other payloads that were transferred to other launchers have been replaced by additional payloads from the same customers. In addition, two new contracts have been signed--MSV-2 and an unannounced payload, probably

Sicral-lB. Peckham indicates that there are three other unattributed contracts that could be signed by the end of the year. Peckham believes that launch prices have come down over the past 10 years as payload mass has increased.

During the hiatus in Sea Launch operations, Arianespace and ILS have both been filling up their order books. Since the beginning of the year, Arianespace has announced 14 contracts. The most recent Arianespace contract was concluded on 2 September. It covers four Soyuz launches (+ four options) for 24 second-generation Globalstar satellites (+ 24 options). The first six-satellite cluster is scheduled to go into orbit in the summer of 2009 from Guyana, whereas the first-generation satellites were launched in clusters of four from Baikonur. This could turn out to be the inaugural launch of the Soyuz from Guyana, currently set for March 2009. A total of three clusters will be launched in 2009, followed by a fourth in 2010. Arianespace will also launch France's two Pldiades satellites on Soyuz from Guyana.

Fully booked

Arianespace plans a total of six Ariane-5 launches in 2007, seven in 2008 and eight in 2009. The 2008 manifest is already fully booked, and the contracts currently under negotiation are for launch slots no earlier than 2009. According to Arianespace and Starsem CEO Jean-Yves Le Gall, the current order book comprises 28 geostationary satellites to be launched with Ariane-5 (including some with a launch mass less than 3t that could be launched on Soyuz), II institutional satellites (nine ATVs, Helios-2B and Herschel/Planck), 10 Soyuz launches (four from Baikonur and six from Guyana) and five Vega launches currently under negotiation (the Verta contract with ESA for the first five commercial launches after the inaugural flight in 2009).

On the list of geostationary satellites, Arianespace is only counting two of the five satellites covered by the framework agreement signed with SES--NSS-9 and NSS-12, which are both firm. Le Gall recalls that, as far as the bottom line is concerned, what counts is not the number of contracts, but the number of satellites in orbit.

Arianespace still has 23 Ariane-5 launch vehicles from the PA batch, plus the four Soyuz launchers ordered at Le Bourget.

The contract for the PB batch of Ariane-5s (35 launchers) is expected to be signed at the end of this year or early in 2008. Further Soyuz launchers will also be needed--there is an 18-month lead time between order and delivery.

Looking ahead to the ESA ministerial conference in November 2008, Le Gall sees three major issues to be addressed in the launcher domain: complete the programmes in progress (Soyuz and Vega); set up an "institutional environment" for launcher operations (similar to Arta, but not another EGAS): and agree on a programme of complementary developments (i.e. improve the performance of Ariane-5 by a few hundred kg). Le Gall clearly does not include the Vinci engine in the improvements to be submitted to ministers in 2008. Finally, Le Gall speaks out in favour of the European preference policy and the need to respect commitments to the customer (e.g. by refusing to "overbook").

Le Gall expresses some concern about China's return to the launch market (NigComsat-1, Chinasat-6B at Chinasat-9 in 2007; Venesat-1 in 2008; and Palapa-D in 2009). He might also have mentioned Boeing Launch Services (Delta-2 to LEO and Delta-4 to GEO, see box) and Lockheed Martin Commercial Launch Services (Atlas-5 to GEO).

Soaring demand

Demand for satellite transponders is soaring, driven by high-definition TV (HDTV), interactive broadband, mobile and personal services, and dual (commercial/government) usage. The telecom and TV segments of the market are enjoying a glorious revival. Following the rise of digital thematic TV, HDTV is now driving demand for a greater share of capacity on geostationary satellites. Three other market segments are growing strongly: video and radio broadcasting to mobiles; broadband internet using compact terminals; and government telecommunications networks (for defence and security applications). Global and regional systems have each carved out a share of the market. In Europe, two global players--SES and Eutelsat--co-exist alongside multiple regional operators: Hispasat (Spain), Hellas Sat (Greece and Cyprus), Turksat (Turkey), Telenor (Norway), Gazcom and Russian Satellite Communications Company (Russia), and Spacecom (Israel). All of these operators have satellite fleets that are running out of capacity. The months ahead are expected to see a flurry of activity as they move to beef up their space segment.

Following the wave of consolidation of recent years (Intelsat/PanAmSat, Loral/Telesat, SES/NSS, etc), the Big Three operators now account for almost 63% of global revenues in the sector--Intelsat, 26.6%; SES, 23.6%; and Eutelsat, 12.6%. Add on Loral/Telesat (7.1%) and Jsat (5.3%), and the proportion rises to over 75%.

Intelsat--the world leader with sales of $2.1 billion and an $8.1 billion order book at the end of 2006--has already invested $615 million in satellite fleet replacement in 2007. Of the seven satellites currently under construction for Intelsat, four are scheduled for launch in the next 12 months.

SES is still recovering from the Proton-M failure on 5 September. The same vehicle had been reserved for the launch of Sirius-4 (4Q 2007), AMC-14 (4Q 2007), Astra-lM (2Q 2008) and Ciel-2 (4Q 2008)--all of which now face delays of several months. Arianespace has been selected for AMC-21 (2Q 2008), NSS-9 (1Q 2009) and NSS-12 (2Q 2009). Launch vehicles for AMC-5R (3Q 2009) and Astra 3-B (4Q 2009) have yet to be selected.

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Eutelsat CEO Giuliano Berretta is firmly conviced of better times ahead for the operators thanks to current growth. He sees three major factors of success: