Section 3 is the Market Assessment/Market Analysis section, it contains the following sections:
3.1 Communications Market 3.2 Space Manufacturing 3.3 Remote Sensing 3.4 Government Missions 3.5 Transportation Missions
3.6 Entertainment 3.7 New Missions 3.8 Space Utilities 3.9 Extraterrestrial Resources 3.10 Advertising

Table of Contents for Section 3.1

3.1 Communications Market
3.1.1 Introduction
3.1.2 Current and Evolving Communications Satellite Applications
3.1.3 Fixed Satellite Service
3.1.4 Direct Broadcast Service
3.1.5 Mobile Satellite Service
3.1.6 Positioning Satellite Service
3.1.7 Summary
The Full Section Index is at the end of this Section

Commercial Space Transportation Study


3.0 Market Assessment/Market Analysis

3.1 Communications Market

3.1.1 Introduction

3.1.1.1 History of Satellite Communications

In 1962 the world's first active relay telecommunication satellite was launched. Since that time the developed world has come to depend upon the services provided by these satellites. The advent of communications satellites has change the world.

Because it is now possible for telephone and television companies to offer worldwide service, people over the entire globe are able to simultaneously share in historical and sporting events. This has been used to truly increase social understanding and provide a stronger bond between all the people of the world. Figure 3.1.1.1-1 highlights the history of satellite communications.


Year Satellite Technology Event
1958 SCORE First satellite with broadcast capability
1958 Courier 1B First teletype relay by satellite
1960 ECHO First passive relay communications satellite
1962 Telstar First fully functional active communications satellite
1962 Relay First worldwide TV transmission satellite
1963 Syncom II First geostationary communications satellite
1965 IDSCS First operational military communications satellite
1965 Early Bird First operational commercial communications satellite
1967 INTELSAT II First communications satellite capable of multiple access transmissions
1968 TACSAT First satellite to provide UHF mobile communications
1968 INTELSAT III First satellite with a despun antenna
1971 INTELSAT IV First satellite with high-power spot-beam antennas
1975 INTELSAT IVA First communications satellite to achieve frequency reuse
1976 MARISAT First communications satellite to provide commercial mobile satellite services
1980 INTELSAT V First complex hybrid communications satellite capable of operating in multiple frequency bands with multiple frequency reuse

Figure 3.1.1.1-1. Communication Satellite Development Highlights

The earliest systems were sponsored to provide services for individual national governments and militaries. These earlier communications satellite systems were fitted into existing terrestrial networks utilizing existing end user hardware. As the consumer base has grown, the technology base has grown and expanded the product utility which has further expanded the consumer base. It is this expansion cycle that continues to fuel the development of telecommunications satellite systems. They have been sponsored by governments and corporations in member groups and individually. Most of the development and governments commercialization of each type of system was led by those in the United States.

Today there are approximately 150 geostationary satellites in orbit around the globe. Of that number around 125 are used for commercial communications. These satellites are shown in Figure 3.1.1.1-2. Satellite communications are continuing to expand to new applications and technologies. The first quarter century of development in communications satellites has provided global coverage for telecommunications systems of numerous types. As the development continues other countries have taken increasing involvement and leads into various markets. The demand for additional features and expanded service areas has attracted new investors. Various user consortium-owned systems have been formed to spread the high initial cost for service. The continuing market expansion has given rise to entrepreneurial provider systems.



Figure 3.1.1.1-2. Current Commercial and Communication Satellites and Their Positions

3.1.1.2 Industry Overview

As satellite applications have grown the communications industry has grown at a fantastic rate. In the past 10 years all communications market areas increased in revenues. Domestic long distance calls, for example, grew exponentially from 4.7 billion calls in 1965, to 48.9 billions calls in 1989, to 66 billion in 1991, and a projected 260 billion in 2011( ref. NASA CR191145, "Potential Market for Advanced Satellite Communications"). Another example is cellular telephone usage, which has increased to 75 million subscribers. Like examples are possible for cable TV where TCI, a fledgling company 10 years ago is now earning $4 billion per year. Such performance results in high industrial growth, as shared by Pelton of the University of Colorado and cited by TCI in several references. The communications industry worldwide revenue in 1982 was $120 billion; today the industry is earning $460 billion. The same groups are predicting $3 trillion in revenue for the industry by the early 2000s. These growth projections are shown in figure 3.1.1.2-1.

Figure 3.1.1.2-1. Industry Revenue Projections

One reason for this high growth is an industry strategy of high dollar amount reinvestment into high technology. This also has a high amount of capital available for such reinvestment. For example, AT&T, in its 1992 annual reports, cites $65 billion in revenue with $39 billion coming from telecommunications. The margin from the telecommunications portion by itself was $14 billion.

3.1.2 Current and Evolving Communications Satellite Applications

3.1.2.1 Applications Roadmap

There are three spheres of technology included in each satellite communications system. They are the satellite, the distribution system/network interfacing to the end user, and the mechanism by which the end user accesses the communication system. Within each sphere, of course, are multiple designs and management solutions. It is common to each, however, that development within that sphere proceeds only to a point where it either drives or waits for development in another sphere.

Figure 3.1.2.1-1 tracks the increases in each of these areas and illustrates the relationship between developments within one area and the resultant growth in another area. The development of smaller scale user apparatus, resulting in localized broadcast systems, from the ability for worldwide telecommunications satellite "feeds" by broadcast Networks can be viewed as a "top-down" evolution. Another evolution, if not revolution, is the development within the distribution system sphere of interactivity, combined with the development within the user sphere of individual-sized hardware driving the development of satellite networks.



Figure 3.1.2.1-1. Growth Interdependence-Telecommunications Systems

Since the start of communications satellite usage nearly all satellites have been used placed in geostationary orbit for use in transmitting TV, radio, and telephone signals. These signals are transmitted from one point on the globe either to a single point (point to point) or from one transmitter to multiple receivers (point to multipoint). This type of service is denoted as fixed satellite service (FSS).

New services have recently entered the marketplace or are about to. These services can be grouped into three categories, discussed below. A logical extension of FSS systems is to directly broadcast TV and radio signals from geostationary satellites to the consumer on a mass basis. Two technical achievements have enabled this concept to become practical. These are higher power satellites and digital signal usage and compression. This has enable up to 150 channels to be delivered into the home equipped with a dish antenna between 14 to 18 inches in diameter.

With the advent of the cellular telephone, people have started to take for granted the ability to use the telephone anywhere. A satellite service that enhances this capability is called mobile satellite service (MSS). Up to a dozen potential competitors are considering entering this market.

Yet one other communication service is now being used. This service uses satellites such as the global positioning system (GPS) to determine precise locations anywhere in the world. This service, called positioning satellite service (PSS), is revolutionizing navigation and surveying. Figure 3.1.2.1-2 shows the application roadmap for the industry.

The ultimate in satellite communications is a concept called global grid, which would use satellites in low earth orbit (LEO) for high bandwidth communications between any two points in the world. This concept allows for easy and inexpensive establishment of communications to handle data and voice communications requiring gigahertz data rates. Such a system requires hundreds of satellites in LEO.



Figure 3.1.2.1-2. Communication Satellite Applications Roadmap

3.1.2.2 Market Area Cross Reference

Figure 3.1.2.2-1 illustrates how applications are growing up around the communications industry. The table shows the market as originally envisioned by CSTS and how industries relate to the basic services provided by the satellite communications industry. Every industry uses information and communications. The transportation industry demonstrates the point. Industries-be they airline, railroad, trucking, rental cars or maritime-all have similar problems that can be helped by the communications industry. The industry must monitor and control the location of its assets, which, by their very nature, are constantly changing location. The industry can use PSS to locate a car, train, airliner, or ship, and then transmit its location back to a home office or control center. This has the highest priority for the airline industry's transoceanic traffic, where ground radar is ineffective. By the use of GPS the industry would be able to decrease the distance between aircraft when flying crowded routes, thereby increasing traffic flow.
Example Industry Application Original CSTS Segment Industry Service
Long distance telephone Telecommunications Fixed satellite service
Surveying Survey and locate and global positioning Positioning satellite service
Locating moving objects (trains, ships, cars, etc.) Survey and locate Positioning satellite service
Oceanic air traffic control Global air traffic control Positioning satellite service and Fixed satellite service or mobile service
Airline in flight radio Direct broadcast service Direct broadcast service
Remote education Remote area education Fixed satellite service going to direct broadcast service
GEO platforms Not a service or market

Figure 3.1.2.2-1. Cross-Reference Between Example Industry Applications, CSTS Original Market Segment, and Communication Service

Overall, the outlook for satellite communications is for continued rapid growth in most areas with the greatest expansion in the areas and mobile satellite systems (MSS), which will drive growth in LEO and medium earth orbit (MEO) satellite systems. FSS and maritime mobile satellite services (MMSS) will experience more moderate growth rates. It is predicted that the commercial satellite communications market will grow to $38.8 billion by the end of the decade (
Fig. 3.1.2.2-2). Satellites today provide approximately 60% of the world's intercontinental telecommunications in spite of, or in partnership with, fiber-optic cable facilities.
Satellite Service1992 $billion2002 $billion
Fixed Satellite Services
INTELSAT 4.5 8.5
Regional and other international satellite systems 1.8 3.6
U.S./Canada national systems 2.3 4.5
Other national systems 1.4 3.4
Subtotal10.0 20.0
Mobile/Low Orbit Services 0.8 10.0
Broadcast Satellite Services 0.5 8.0
Other (e.g., Data Relay, etc.) 0.1 0.3
Total11.438.3

Figure 3.1.2.2-2. Satellite Revenue Projections

Commercial communications satellites occupy three orbital locations. The geostationary earth orbits (GEO) are positioned at points above the Earth's equator at a distance of 22,236 mi (35,786 km), where the relative motion is that the satellite remains at a fixed location rotating in unison with the Earth. With only small corrections, this allows the satellite to constantly cover an area of the Earth's surface. This also allows a fixed focal point for the uplink-downlink antenna and for the ground base. Additionally, it requires only three properly located satellites to cover the Earth's circumference. Satellites with orbits much closer to the Earth (LEO) have a much smaller viewing angle of the surface, and also follow various paths about the surface and thus multiple satellites are required for constant coverage. An intermediate class of orbit is the mid, or medium, Earth orbit. Satellites in these orbits have larger viewing angles but suffer other disadvantages of those in LEO. For those coverage areas that are far from the equator, such as Russia, and thus on the fringe of a GEO satellite view, a Molniya (the USSR satellite to first employ this orbit) orbit is used. This orbit is highly elliptical and polar. Satellites on this orbit spend about 6 hours at the apogee, which occurs over the desired coverage area, and thus four such satellites are required for continuous coverage.

3.1.3 Fixed Satellite Service

3.1.3.1 Market Description

Fixed satellite service (FSS) is the transmission of analog and digital data over long distances from fixed sites. For the purpose of this report, it is further defined to mean basic services used by the telephone and television industry using geostationary satellites (satellites in geostationary orbit communicating with fixed ground stations). The users of these services are telephone, television, and business doing business in multiple cities.

Early fixed services satellites were merely signal reflectors and had no electronic components. These reflectors (or passive satellites) radiated the signal in all directions, and thus only a fraction of the signal was directed toward the receiver. This required very high-power transmitters for adequate signal reception at the receiving ground station. Subsequent satellites are active satellites having many electronic components and function as repeater stations. These receive the uplink carrier, process, and then retransmit on the downlink to other Earth stations.

Current communications satellites have multichannel capability and use various schemes for modulating the actual information signal onto the carrier signal. Normal transmission frequencies are in the megahertz range, but the information (voice) requires only the range (bandwidth) of 30 to 20,000 cycles. The higher frequency "carrier" is then "modulated" in the lower information frequency range. The higher frequency, in the gigahertz (GHz) range, is thus said to be modulated by the information (signal), in the kilohertz (kHz) range. A receiver tuned to the carrier frequency picks up the transmission and then "demodulates" so that the signal is again audible. The actual carrier frequency is determined by several factors, physical and political. The physical factors are concerned with noise. This noise is from either atmospheric (Earth) or galactic (space) sources and is generally negligible above 1 GHz. Atmospheric absorption is less below about 12 GHz but water vapor and oxygen absorption increase noise above 10 GHz. Thus, an ideal carrier frequency range would be between 1 GHz and 10 GHz. Political factors (regulations) imposed by regulatory agencies such as the FCC (U.S. Federal Communications Commission), the ITU (U.N. International Telecommunications Union), and the WARC (World Administrative Radio Conference) allocate which frequencies are available. The S and C bands have been most predominant in telecommunications with the 4-GHz band used for downlink and the 6-GHz band used for uplink. Currently these are becoming crowded and expansion is taking place into the L and Ku bands, with audio signals in the L band and those signals containing video information into the Ku band. With these improvements, satellites accomplish some 60% of the intercontinental telecommunications today.

Applications

Telephone
Telephone companies have used FSS since the early 1960 with success. The satellite has allowed companies to establish or supplant long distance services between continents or into remote areas without laying telephone cables. This is factor is one of the driving forces keeping telecommunication usage alive today.

Since the first telecommunications satellites were put into service, transoceanic cable has been laid in increasing number. These cables are now being replaced with fiber-optic cable, resulting in greater capacity and service. With these occurrences, telephone use (analog) has decreased to 16% of satellite usage in the early to middle 1990s.

However, FSS still offers several features that will keep it in use for telephone service. These are (1) a single geostationary satellite has a constant view over continent-size areas of the globe and (2) satellites have the flexibility to shift capacity between ground stations. For example, if a cable breaks between two sites being serviced by fiber-optic cable, the satellite can add system capacity to help make up the loss cable.

Satellites offer the most efficient manner to establish telecommunications services for regional development. The satellite alternative is becoming more attractive as the cost of ground stations decreases. This is particularly true for the Pacific Basin area (ITU region 3), where there are over 2,000 islands requiring service. At the same time the increased wealth of the area has driven demand for telephone and data services. General agreement found in the industry was that this area would drive fixed satellite demand. In 1993 transponder demand was for 926 transponders (36 MHz equivalent). According to industry prediction, this demand will double by 1997. This increase in usage will occur before it becomes practical to lay fiber optics between all the islands.

Business
Businesses are having a greater interest in telecommunications as data generation and usage go up. Many businesses are now global in standing, with many having locations in remote locations. The oil industry is a case in point. The oil industry is exploring and recovering oil from Alaska, offshore locations, undeveloped regions of South America, and other remote locations. Readied and comprehensive communications with these locations are of vital interest to industry. The need for communication rates of over 5 megabytes/second with quantities of terabytes from a single location has been quoted in interviews with oil companies. The ability to transmit these data from/to remote sites is a major factor in the efficient exploration and exploitation of resources.

More classical business usage is for video conference and the transmission of business data. Very small aperture terminals (VSAT) have increased the business usage for videoconferencing between diverse locations. In less than 15 years 6,000 terminals have appeared; their increased demand now accounts for 8% of the total communication satellite usage. Increases of business usage by three to four times are predicted by the industry. As costs of ground systems and satellite systems decrease usage will be accelerated.

A second specific application is the satellite usage by financial houses. Global electronic transfers are done via satellite for the majority of the world (in 1992, according to JTEC Panel on Telecommunications, some $300 trillion). Other cited current applications are airline transport, international and national retailing, stock trading, and insurance.

Television
The television industry uses 60% of all FSS. Satellites offer the most appropriate means for networks and cable programmers to transmit video signals from remote locations to a central production facility and from the production facility to affiliates and cable operator head ends. The most attractive factors for television usage of satellites are (1) ability to transmit the same signal dependably with a single asset to an unlimited number of sites on the ground, (2) ability to rapidly set up transmission from a remote site to a central location for video service independently of the location of the remote site, and (3) ability to reliably maintain and control the quality of delivery of service to all distribution sites.

Several factors are affecting the future bandwidth requirements for the industry. These include increased television programming requirements (for more shows, and more channels), the introduction of high-definition TV (HDTV) and interactive TV, and digital compression technology. Each of these will be discussed in turn.

Television Programming
One only has to look at TV or program listings to witness firsthand the increased number of programs that the consumer has to choose from. The cable industry in particular has made available channels, such as HBO, ESPN, CSPAN, CNN, Showtime, and many others. The number of channels that a typical consumer has to choose from has increased from three or four in most areas 20 years ago to over 50 in most metropolitan areas. Cable operators such as TCI expect to introduce 500-channel service in the relative near term. This will mean additional pressure for more niche programming.

The niche programming area that is receiving most attention is in education. Cable programmers are currently offering services such as The Learning Channel, Mind Extension University, and The Discovery Channel. Programming is expanding to specific industries, companies, and disciplines. Candidate areas include medicine, engineering, law, and sales. Already the auto industry is using satellites to teach mechanics how to perform maintenance items and teach salesmen about the latest cars. Firehouses across the country receive specific programs on lessons learned from fires across the country. New companies are enjoying success producing such programming.

Elementary and high school education is also benefiting, New programs from historical sites or news scenes are now starting to appear in the classroom. The most spectacular example of this is where space shuttle crews televise simple experiments from space or where students participate with "live" operations of underwater exploration devices.

High-Definition TV and Interactive TV
These applications are nearing fulfillment and being prepared for the consumer. Both applications require greatly increased bandwidth. HDTV is receiving high attention by the NITA, FCC, WRAC, and the ITU. HDTV is designed to have twice the resolution of conventional TV, a wider screen, and compact disk-quality sound. Analog HDTV signals will not fit into current spectrum allocations. With the advent of digital signal compression, HDTV should fit into current allocations. HDTV will impact both the FSS and direct broadcasting service areas.

Interactive TV
This application, currently in the demonstration phase, offers consumers the ability to affect the video images they receive. For example, for sports telecasts, the viewer will be able to select which seats they watch the action from, get the latest statistics on specific players, and even select multiple windows at once. Such programming increases the bandwidth requirements by four times to an order of magnitude.

Digital Compression
To enable the television industry to deliver these products, video compression had to be developed. Using video data requires 1,000 times the bandwidth of voice and typical information data. With video data in the megahertz (MHz) range there are far fewer "channels" available per band. To mitigate some of this over demand a technique known as compressed digital video (CDV) has been developed. The typical (U.S.) video bandwidth is 4.2 MHz. This requires a sampling rate of 8.4 MHz, and with 8 digital bits per sample (byte) a bit rate of 67.2 Mb/s is created. With a three-color system the bit rate climbs to 201 Mb/s. In comparison, a current diskette holds about 1.44 MBytes or 11.5 Mbits. A 100-minute movie would then require over 100,000 diskettes. Furthermore, the higher resolution the video signal requires, the higher the bit rate. A typical VHS-quality signal requires about 1 to 2 Mbps for one-way transmission. With the advent of HDTV, this requirement may grow to 15 to 25 Mbps. This growth is being driven by demand for larger viewing formats (such as large screen or projection TV systems), and the increased demand for digital pictures and interactive TV.

Thus, some method of compression and decompression of the data is required. Combinations of techniques are used. Initially, preprocessing the data to remove what is most difficult to code but is relatively unimportant is employed. Then techniques are used to delete or simplify coding of the remaining data. One such method is to code only the changes from one frame to the next frame.

In 1992, General Instrument Corp. and Compression Labs Inc. began selling the commercial systems for digital compression in transmission of multiple, high-quality video channels on a single satellite channel. Scientific Atlantic also recently began shipping equipment for this market, and several other companies have announced digital equipment for similar applications. These systems are moving toward adopting the new MPEG digital standard for high-definition television and developing interoperability between different pieces of equipment such as satellite receiver, computers, TVs, and VCRs. Consumers will be more likely to purchase standardized products, which will also increase the number of products and decrease unit cost With compression, current planned systems can provide up to 32 video channels in the same bandwidth that would have previously provided less than 10.

Digital compression is not always appropriate for use. TV networks, and programmers require a full signal from a remote site (backhauling) for postproduction work in order to preserve the signal quality. Digital compression by its nature removes data from the signal. While in most circumstance consumers will not notice the difference in the signal sent to them, compressed video does degrade the quality sufficiently to be noticeable for postproduction. Therefore, backhauled information will likely not be compressed.

3.1.3.2 Study Approach

Three different methods were used to size the FSS satellite demand and required transportation attributes. Figure 3.1.3.2-1 shows the process for the method used. The first method was to interview and collect data industry leaders from Hughes, Martin Astro Space, AT&T, Americom, Intelsat TCI, Jones Intercable, The FCC, the University of Colorado, and others. Sources for the data were printed matter, recorded Congressional testimony, and direct interviews. Appendix B.1 lists all contacts used in this study.

The second method was to review all current and anticipated satellite orders. This information was divided up into current contract, pending, and proposed. The data provided information to establish the current traffic for FSS satellites. Third, an analytical model was developed to forecast satellite requirements for the future. The model has three basic features. The first is the current transponders in service and their expected lives. Two curves were developed to provide an upper bound and lower bound estimate. The lower bound number represents the number of current in-service transponders remaining in any particular year, based on launch date and engineering design life. The upper bound is adjusted for historical lifetime of the satellites.

A set of transponder demand curves were then developed by taking data gathered from interviews and printed material. Specific demand curves were made from projections made for Martin Marietta proprietary use, space policy projections, industry projection of 6% per year annual increase, and from satellite order information.

Next, two different satellite models were developed, the first was an Intelsat class, which has 90 36 MHz equivalent transponders with a LEO equivalent weight of 27,000 lb and a life of 15 years. A single owner class of 27 transponders and 13,000 lb LEO equivalent weight and a 7-year life was developed. These two satellite models were developed by reviewing projected order information.



Figure 3.1.3.2-1. Study Methodology

The information was then combined to project demand for future satellites from the present to 2010. Information was then reconciled into high, medium and low probability and reported in both number of satellites and mass to LEO. The LEO orbit used was 100 nmi circular at 28.6 deg inclination launch from the Eastern Test Range in Florida. Price elasticity is based upon comments made on digital compression and the percentage of budget spent to launch and maintain a satellite system.

3.1.3.3 Market Assessment and Projection

The accepted lives of the transponders currently in service is seen in figure 3.1.3.3-1. As seen, there were currently just under 2,940 transponders in service at the end of 1993. The number of the transponders continuously decreases, with zero reached sometime around the year 2010 as satellites reach the end of their projected lives.

Figure 3.1.3.3-1. Projected Lives of Current Transponders on Orbit

Figure 3.1.3.3-2 shows transponder demand estimates. Four different estimates are shown. The highest demand curve is based on the trend established in the 1990s, where over 15,000 transponders would be forecast in the year 2010. The next highest curve is extrapolation of proprietary reports from consultants, which show demand for some 8,200 transponders . A projection from space policy shows some 3,900 transponders in use in the year 1996. Using a 6% per year increase to this number to the year 2010 results in demand of approximately 8,870 transponders. A lower bound conservative estimate curve of resulting in 7,200 transponders is the lower curve shown, which was created by roughly halving the current growth in transponder demand.

Figure 3.1.3.3-2. Transponder Demand Projection

The resulting satellite demand from satellite replacement and demand is shown in figure 3.1.3.3-3. This curve is the result of combining the information contained in
Figures 3.1.3.3-1 and -2 and using the satellite features of the two classes of satellites developed. A 40%/60% split between the Intelsat/Single Provider satellite transponders was used as developed from historic launch data. The lowest estimate derived for the time period between 2005 and 2010 is 24.3 satellites per year, found by combining the upper bound current transponder curve and the lower bound transponder demand curve. Combining the lower bound current transponder curve and the extrapolated consultants data results in an estimate of 31 satellites per year.

Figure 3.1.3.3-3 Fixed Satellite Service Launch Demand by Year

Use of satellite orders information resulted in an estimate of 20 satellites per year estimate for a high- probability market. Another four satellites were added to that total for medium models based on consideration of proposed projects. The low probability number was derived by consideration of all reported proposed projects. This analysis assumes that the market remains stable throughout 2010.

Based upon the above analysis are the projections found in the figure 3.1.3.3-4 below.


Market ProbabilityHighMediumLow
Number (avg./yr.)202431
Mass (avg. klbs/yr.)295395457

Figure 3.1.3.3-4. Market Projection With Current Prices

Price elasticity is based on comments made by cable programmers in conversations about digital compression. They commented that the additional capacity gained by digital compression was to be immediately consumed. Digital compression was to be used to provide additional capability while maintaining the current budget for satellite usage. In other words, a one-to-one correspondence is maintained between the cost of satellite usage and resulting demand. This ratio may be conservative based on the fact that the additional capacity is to be immediately consumed, leading to the conclusion that if made available the demand would increase faster than a 1:1 ratio. However, to be conservative in this analysis a 1:1 ratio was used. Since the cost of transportation is approximately half that cost of providing satellite service a simple formula is possible (e.g., a decrease of 50% in launch cost would drop the cost of satellite service by 25% and result in an increase of 25% in transponder and satellite demand.

This treatment results in the following price elasticity curves, as shown in figure 3.1.3.3-5.


Launch CostCurrent$1,000/lb$600/lb
High Probability
Number (avg./yr.) 20 25 33.3
Mass (klbs/yr.) 295 369 493
Medium Probability
Number (avg./yr.) 24 30 40
Mass (klbs/yr.) 354 443 591
Low Probability
Number (avg./yr.) 31 39 51
Mass (klbs/yr.) 457 57 793

Figure 3.1.3.3-5 Demand Based on Price Elasticity

3.1.3.4 Prospective Users

Prospective customers of the CSTS system for launching communications satellites are primarily the current customers of launch systems. The largest user by far is Intelsat, which currently has 20 satellites in operation, 14 satellites on order, and options for 14 others. Other users, such as AT&T, Americom, and individual countries and postal telegraph and telephone (PTT) organizations will continue to be primary customers. See appendix B.2 for a listing of users.

3.1.3.5 CSTS Needs and Attributes

Fixed satellite applications dominate the commercial uses for space transportation. As a result, they currently have a wide experience base. The industry infrastructure for processing and launch payloads is in existence worldwide. The infrastructure needs are unlikely to change to any appreciable amount. Satellites will maintain their current requirements for contamination, hazardous processing for propellant servicing and ordnance installation, and ground transportation.

Selection criteria used to select launch vehicles, in order of importance, are:

a. Payload capability (can the launch vehicle lift the payload to the correct orbit).

b. Availability (Can the launch vehicle be schedule to meet the need).

c. Reliability.

d. Cost.

e. User friendliness (documentation requirements, logistics, provider responsiveness).

3.1.3.5.1 Payload Capability

Two classes of satellites were found to exist, and they will continue to be produced for the foreseeable future. Both classes are ultimately delivered to geostationary orbits over the region where service is required. The heaviest class of satellites weighs around 27,000 lb at launch, including kick stages, and fits within a 14-ft diameter envelope. The second class weighs typically 13,000 lb and fits within a 10-ft diameter.

While there has been speculation that as launch costs decrease and launch vehicle capability goes up, the mass of all satellites would increase. This has not been sufficiently proved for GEO-based satellites. While LEO satellites will have an earlier time adapter to less restrictive launch requirements, GEO satellites may not enjoy the same benefits. This is due to two causes: first is the additional energy requirements to get to GEO, and second is insurance. Typically, a GEO satellite enters a park orbit of around 100 to 160 nmi. After reaching this orbit, the satellite must make two more "burns." The first burn places the satellite into a GEO transfer orbit and the second burn at apogee places the satellite into its service or operational orbit at geostationary location. Before GEO satellites can grow any significant amount, a low-cost upper stage must also be developed with significant payload capability.

Insurance availability is also a consideration on how large a commercial payload can become. The pool of insurance available for insuring communication satellites is about $400 to $500 million worldwide. This amount has failed to grow even in light of the recent losses of an Intelsat and the recent Ariane 4 failure and the current rates of 11% to 18%. These factors place a potential limit on the size of GEO-based communication satellites irrespective to the size of the launch vehicle.

3.1.3.5.2 Availability

Currently, booking times of 36 months are typical in the industry. In some cases books of 18 months before launch have been done. Typical satellite orders take 2 to 3 years to fill. In some cases an 18-month schedule has been accomplished. To meet a launch at the earliest opportunity an integration timeline of 12 to 16 months is needed. This allows the user 2 to 6 months to select a launch vehicle and perform contract actions before committing to a launch.

3.1.3.5.3 Reliability

This is a major issue with users and satellite providers. Insurance rates are between 11% to 18% of the total cost of placing a satellite system in orbit. While the current typical design reliability of 0.98 and demonstrated reliability of 0.96 are being used out of necessity, higher reliability would remove risk and lower insurance rates. Higher reliability will allow the insurance industry to recoup the losses they have encountered and should allow the industry to eventually reduce its rates. Moreover, a satellite lost is a satellite not earning revenue. A loss of a satellite system costing $100 to $200 million obviously is a hardship on both the owners and users of a satellite.

3.1.3.5.4 Cost

Current cost supports the use of space communications. However, launch service costs now are 50% of the cost of providing a satellite to the user. A decrease in cost will result in greater satellite usage and numbers.

3.1.3.5.5 User Friendliness

This category can be broken down into several components. These are type of service provided, logistics, provider responsiveness, and documentation requirements. Every user and satellite manufacture indicated that the launch provider is performing a service, and as a part of that service, the nearer the launcher places the payload to its final destination, the more attractive the service. If the launch places the payload into the transfer orbit rather than a park orbit, it reduces the burden on the satellite manufacturer and user by elimination of an additional organization (the upper stage provider) to deal with. Hence when an upper stage is provided, the burden and interfaces for the payloader are greatly reduced.

Logistics is another issue. Satellite manufacturers would like the launch provider to be located in an easily accessible and user-friendly environment. A U.S. launch site for example, offers a number of ways to receive payloads, roads, barges, or aircraft. Logistics for the employees of the satellite users and manufacturers was also cited. Access to TV, good hotels, easy communications, selection of restaurants and entertainment, and good medical care were noted as being important. While U.S. launch sites offer these features, most foreign sites do not have ready access to some or all of these amenities. This is improving, but several contacts expressed distinct preferences for U.S. launch sites.

The ability of the provider to give personalized attention to the user and manufacturer was noted by the interviewees as being important. Users like and want to be able to call in to a single point of contact and need to have confidence that their needs are being considered.

A major complaint was that launch providers think too much like government contractors, imposing extensive documentation requirements and failing to effectively challenge imposed requirements given by the government. Streamlining of documentation and providing classes of standard service with minimal unique requirements will help satisfy the complaint. Users noted that the U.S. launch industry is incapable of effectively dealing with range safety requirements. Sifting safety requirements imposed on both the launch vehicle and spacecraft is a major issue with commercial users. Stability in these requirements will improve the perception of the users.

3.1.3.5.6 Ground Handling

Existing ground facilities are proving to be adequate to service this market area. No new special provisions are envisioned to be needed. Typically the satellite manufacture supplies all unique aerospace ground equipment, including that required for handling. Satellites typically require facilities for hazardous processing such as loading of hydrazine. The launch provider typically transports the payload from the spacecraft processing facility to the launch vehicle.

3.1.4 Direct Broadcast Service

3.1.4.1 Market Description

A new market area is direct broadcast of TV and audio channels directly to homes, remote or business directly from satellites. Currently, Japan and Europe are successfully using and expanding direct broadcast services (DBS). Direct broadcast is extremely attractive for areas such as the Pacific Rim, where infrastructure has not been fully established and is difficult to establish. DBS is being reintroduced in the United States in 1994. Direct broadcasters in the United States are planning to provide up to 150 channels to the consumer from satellite pairs. The primary market was seen as the consumers who do not have access to cable TV. However, DBS may be a direct competitor to the cable TV provider. DBS providers are intending to provide high-definition TV service.

Another new market is direct broadcast digital radio from satellites. This offers the advantage over conventional radio by consistency of programming over large global areas or on a global basis. Estimates of several hundred channels of programming may be possible.

Digital compression technology is an enabler for this market area. This technology improves the effectiveness of tansponders from 4 to 12 times, thereby increasing transponder effectiveness for both conventional TV picture standards and for HDTV. Without digital signal compression BSS providers would not be able to provide the breadth of service demanded by the consumer.

3.1.4.2 Study Approach

The same methodology as the FSS assessment was conducted here. Interview results, current satellite inventory, and satellite orders data were used in the market assessment.

3.1.4.3 Market Assessment and Projection

The DBS market area is a direct outgrowth from the FSS area and, as a result, is very similar in many characteristics. Both systems operate at GEO, go through similar approval processes, and have like launch vehicle interface requirements. However, unlike the FSS area, which has both point-to-point, and point-to-multipoint communications, BSS is only point to multipoint. Therefore a greatly reduced number of satellites are required to service the market. For example, for the United States, if two competitors are successful, only six satellites would be required. Other regions require more satellites, due to language and cultural differences. To provide good quality services worldwide as few as two dozen satellites may be required. This conclusion is supported by the number of projected satellite projects (in the listing in Appendix B.2).

The traffic model (Fig. 3.1.4.3-1) based on currently planned satellites and their replacements results in an average of 3.8 satellites per year for the period of 2005 to 2010. If HDTV increases bandwidth requirements by two times and the satellite to increase the services are introduced starting in the year 2000, then the satellite traffic increases to 5.4 satellites per year for the same time period. This estimate is used for the medium probability estimate. If we assume the world demand for DBS double from the projected high-probability market with HDTV, then a 6.8 satellite per year requirement for 2005 to 2010 results.



Figure 3.1.4.3-1. Direct Broadcast Satellite Demand by Year

Using the same method as used for the FSS market, figure 3.1.4.3-2 shows the resulting elasticity curves.
Launch CostCurrent$1,000/lb$600/lb
High Probability
Number (avg./yr.) 3.84.86.3
Mass (klbs/yr.)91144152
Medium Probability
Number (avg./yr.)5.46.89.0
Mass (klbs/yr.)130163216
Low Probability
Number (avg./yr.)6.88.511.4
Mass (klbs/yr.)163204273

Figure 3.1.4.3-2. Demand Changes as a Result of Changing Price

3.1.4.4 Prospective Users

Prospective customers of the CSTS system for launching DBS satellites are current manufacturers and providers of DBS.
Appendix B.2 contains a listing of current and planned users.

3.1.4.5 CSTS Needs and Attributes

DBS systems are very similar to those which provide FSS and hence, result in similar requirements. The industry infrastructure for processing and launch payloads are in existence worldwide. The infrastructure needs are unlikely to change to any appreciable amount. Satellites will maintain their current requirements for contamination, hazardous processing for propellant servicing and ordnance installation, and ground transportation.

Selection criteria used to select launch vehicles are, in order of importance are:

a. Payload capability (Can the launch vehicle lift the payload to the correct orbit).

b. Availability (Can the launch vehicle be scheduled to meet the need?).

c. Reliability.

d. Cost.

e. User friendliness (documentation requirements, logistics, provider responsiveness).

3.1.4.5.1 Payload Capability

Typical BSS satellites weigh around 24,000 lb at liftoff, including kick stages, and fit into a 14-ft diameter.

3.1.4.5.2 Availability

Currently, booking times of 36 months are typical in the industry. In some cases books of 18 months before launch have been done. Typical satellite orders take 2 to 3 years to fill. In some cases an 18-month schedule has been accomplished. To meet a launch at the earliest opportunity an integration timeline of 12 to 16 months is needed. This allows the user 2 to 6 months to select a launch vehicle and perform contract actions before committing to a launch.

3.1.4.5.3 Reliability

This is a major issue with users and satellite providers. Insurance rates are between 11% and 18% of the total cost of placing a satellite system in orbit. While the current typical design reliability of 0.98 and demonstrated reliability of 0.96 are being used out of necessity, higher reliability would remove risk and lower insurance rates.

3.1.4.5.4 Cost

Current cost supports the use of space communications. However, launch service costs now are 50% of the cost of providing a satellite to the user. A decrease in cost will result in greater satellite usage and numbers.

3.1.4.5.5 User Friendliness

This category can be broken down into several components. These are types of service provided: logistics, provider responsiveness, and documentation requirements. Every user and satellite manufacture indicated that the launch provider is performing a service, and as a part of that service, the nearer the launcher places the payload to its final destination, the more attractive the service. If the launch places the payload into the transfer orbit rather than a park orbit, it reduces the burden on the satellite manufacturer and user by elimination of an additional organization (the upper stage provider) to deal with. Hence, the paperwork is significantly reduced and interfaces for the payloader are greatly reduced.

Logistics is another issue. Satellite manufacturers would like the launch provider to be located in an easily accessable and friendly environment. A U.S. launch site, for example, offers a number of ways to receive payloads, roads, barges, or aircraft. Logistics for the employees of the satellite users and manufacturers was also cited. Access to TV, good hotels, easy communications, selection of restaurants and entertainment, and good medical care were noted as being important. While U.S. launch sites offer these features, most foreign sites do not have ready access to some or all of these amenities.

The ability of the provider to give personalized attention to the user and manufacturer was noted by the interviewees as being important. Users like and want to be able to call in to a single point of contact and need to have confidence that their needs are being considered.

A major complaint was that launch providers think too much like government contractors, imposing extensive documentation requirements and failing to effectively challenge imposed requirements given by the government. Streamlining of documentation and providing classes of standard service with minimal unique requirements will help satisfy the complaint. Users noted that the U.S. launch industry is incapable of effectively dealing with range safety requirements. Sifting safety requirements imposed on both the launch vehicle and spacecraft is a major issue with commercial users. Stability in these requirements will improve the perception of the users.

3.1.4.5.6 Ground Handling

Existing ground facilities are proving to be adequate to service this market area. No new special provisions are envisioned to be needed. Typically the satellite manufacture supplies all unique aerospace ground equipment, including that required for handling. Satellites typically require facilities for hazardous processing such as loading of hydrazine. The launch provider typically transports the payload from the spacecraft processing facility to the launch vehicle.

3.1.5 Mobile Satellite Service

3.1.5.1 Market Description

The areas of mobile communications are the most volatile of all the communications segments. The mobile services are intended to provide wireless communication to any point on the globe. At the current time there are only limited mobile services using geostationary satellites made available by InMarSat. The InMarSat network relies on a backbone of three satellites to give global coverage. The first use of the network was to provide communications with commercial shipping at any time, at any point. This function is still being successfully accomplished with the InMarSat system. Private companies are now entering the market. With the advent of lower cost satellite technology and the increasing expectation to be able to communicate with anyone a number of new systems are being investigated and proposed. By one count some 11 different systems were being proposed. The new entrants are proposing a wide variation in approach. For example, American Mobile Satellite Company plans to use geostationary satellites to supplement cellular networks over the United States, while Iridium proposed the use of a satellite constellation of 66 polar LEO satellites to give global coverage. As a result, prediction of what systems will be deployed and service is difficult.

The strategy that all the companies are using to promote the mobile satellite market is to allow easy access to the satellite system. With the current system a typical ground unit is approximately 50 lb in weight and incurs 1/2 second transmission delays due to the distance between the satellite and Earth. Most mobile satellite ventures are attacking both of these problems and attempting to make the service user friendly or even seamless with current cellular terrestrial based systems. The future of the segment is dependent upon the successful introduction of satellites with sufficient capability and capacity to allow the use of lightweight, inexpensive, hand-held telephones similar to cellular telephones.

Development Status and Architecture Comparison
There is a variety of architectures that have been and are being developed to address mobile satellite communications. They include satellites in geostationary orbit (GEO), mid-inclined orbits at altitudes of thousands of nautical miles (MEO) and polar orbiting systems in low earth orbit (LEO). As well, two different classes of services have also been or are being developed. The first, called Little LEO by the industry, are small satellites put into service to perform simple text messaging and paging operations. Voice, fax, and data services constitute the second class. Here, a wider diversity of systems and constellation is in play. One architecture, called Big LEO, is one such solution. The big LEO systems used mid- to high-inclined orbits in circular altitudes in orbits below 600 nmi. This market area is also being serviced by the other orbit types of MEO and GEO.

Mobile communications by satellite was established in 1976 by the ComSat in developing the MARISAT system. Since that time a consortium of countries or signatories have developed today's InMarSat system. The InMarSat system has found high usage in applications from news-gathering to communicating with and controlling commercial maritime shipping. The current InMarSat system is based on the use of four geostationary satellite and ground equipment with the lightest of units, weighing approximately 50 lb, providing voice, fax, and data service. The advantage of this type of architecture is that it requires only one satellite to provide regional service, and only three to provide worldwide coverage and simple technology for communications between the satellite and ground. The limitations are the 1/2 second transmission delay caused by the distance between the ground and satellite, and limited capacity.

InMarSat has recognized these limitations and has been studying how to access the untapped potential of the mobile cellular telephone market. Its response has been a program called Project 21. This project's architecture conclusions have not been published at the time of this writing but will undoubtedly address these problems and provide access to the cellular user by dual-use phones (phones that allow access to both cellular terrestrial networks and a satellite network).

The newcomer to the mobile satellite area that has received most notice is the Iridium system. This system is based on a constellation of 66 satellites (not counting replacements or spares) in a 90 by176; inclined orbit in six different orbital planes. Iridium has contracted for the production of its satellites, and has entered into launch agreements for launches on Delta, Long March, and Proton. The initial operating capability of the systems is 1998.

All current systems in development envision small hand-held telephones for voice communications and limited data transmission. Iridium inc. has been working to develop and deploy the Iridium system, which is projected to cost subscribers approximately $6.00/ min. Competition has appeared for the Iridium market in systems from systems such as Globalstar, Aries, Odyssey, Ellipso, and other others. These systems are listed in figures 3.1.5.1-1 and -2.


Loral/Qualcomm GlobalstarConstellation Communications AriesIridium Inc.TRW OdesseyEllipsat EllispoAMSCCalling Communications
Number of Satellites4848661214 to 241924
Satellite Life (years)7.55515510 to 127.5
System Development Cost ($B)1.70.43.41.30.60.6N/A

Figure 3.1.5.1-1. Example of MSS Big Leo Systems

SystemGeographic CoverageModulaltionHandset CostService CostMarket EstimateOperational Date
OdysseyNorth AmericaCDMA1000N/AN/AMid 1996
IridiumGlobalTDMA/FDMA$2,000 to $3,000$3.00/min6 million1998
EllipsoU. S. and TerritoriesCDMA$300 (add-on) $1,000 (new unit)$0.60/min18 millionN/A
AriesGlobalTDMA/CDMA/FDMA1500N/A2.9 million1996
GlobalstarU. S. (first generation) Global (second gerneration)CDMA$700 (dual-mode) $600 (single mode)$0.30/min3.4 million1997 (U.S.) 1998 (Global)

Figure 3.1.5.1-2. Technology and Service Characteristics of Big Leo Systems

Little LEO systems offer only limited services. They are design to provide one-way emergency alerting, one- way locating for cars, trucks, or ships, paging, and limited two-way text messaging and data communication. These systems are placed into LEO, typically at 400 to 450 nmi. The cost to users ranges between $5 to $45 a month plus a nominal usage charge. The ground terminal typically cost between $50 to $400. Typical Little Systems and their attributes are listed in figure 3.1.5.1-3.
Orbital Communication Corp.Starsys, Inc.Volunteers in Technical Assistance (VITA), Inc.
Number of Satellites24242
ServicesOne Way Emergency Alerting, Location , Two-way MessagingEmergency Alerting, Location, Data Messaging, Global PagingData Transfer
Development Cost ($ Millions)100200$3.0 Satellites
Terminal Cost $50 to $400 $75 to $250 $4,000 to $6,000
User Cost $5 to $40 per mo. $150/yr N/A
Operation Date 1994-5 1995 1990 (experimental) 1996 (fully operational)

Figure 3.1.5.1-3. Little LEO System Characteristics

3.1.5.2 Study Approach

Study methodology for this section was to use the interview process similar to that employed for the Fix Satellite Study. The information obtained from individual interviews was compared to find a consensus potion. This information was compared to mission model information to time initial placement of individual satellite systems. The engineering lives were then used to calculate the replacement schedule for the systems. This information was then combined into a spreadsheet to determine launch rates. Typical mass for each of the satellite types was applied to the mission model to obtain the mass per year requirements for each system type. The results were then added to gather to find a composite number of satellites per year and mass per year. For more details see
Section 3.1.3.2.

Since the satellites used in LEO typically do not require an upper stage, mass adjustments were used to find the effects of lower cost launches. The mass increase adjustment was made according to the Boeing methodology developed for the ALS program.

3.1.5.3 Market Assessment and Projection

The MSS market address three different types of users. The first type are those that are in remote locations. Examples are Maritime shipping and oil exploration. Second is to supplement cellular use by dual-use phones, and the third is for worldwide or regional paging/messaging.

The interview process yielded a consistent result, that being that three MSS systems will survive. This is also evidenced by the status of contenting systems. A Little LEO system named Orbcom by OSC is currently scheduled for launching on Pegasus starting in 1994. InMarSat is the incumbent MSS provider, with four satellites in use at GEO. Iridium has secured enough financing to contract for the build of its satellites and has manifested its launches for initial deployment and constellation maintenance. The Globalstar system is now starting its launch vehicle procurement process. The two most likely systems will be one at medium earth orbit and two at low Earth orbit. The MEO satellite is assumed to weigh the typical case of 1,500 lb. The two in LEO will be one Little LEO system, weighing approximately 500 lb per satellite, and one Big LEO system, weighing approximately 1,500 lb each. These three systems were used as the high-probability case. Figure 3.1.5.3-1 shows the total number of satellites per year and Figure 3.1.5.3-2 indicates the total mass to orbit by year.

The mid probability estimate was perform to add on Big LEO system to the manifest. This estimate is predicated on the potential market size. Iridium has estimated that worldwide there are some 150 million cellular telephones. Iridium is also using a minimum market projection of 1.05 million subscriber with a potential base of three million. If Globalstar achieves the 3.4 million subscribers as listed in the table, the total number of subscribers for both systems represents only 3% to 6.2% of all cellular telephones. The medium-probability case is shown in Figures 3.1.5.3-1 and -2.

The low probability uses the above systems plus one more. This additional system is based on a concept similar to an ARPA study called Global Grid. Under this concept a constellation of LEO Polar satellites would be placed into orbit. One solution by Calling Communication would use 840 operational satellites with a number of on-orbit spares, bringing the total number to 924 satellites.

Establishment and maintenance of such a system would take around 200 satellites per year. Calling Communications believes that such a system would offer service at 30 cents per minute. The low-probability case is shown in Figure 3.1.5.3-1 and -2.



Figure 3.1.5.3-1. Total of MSS Satellites Demand by Year


Figure 3.1.5.3-2. MSS Satellite Mass Demand by Year

The one compelling argument on the effects of lowering the cost of LEO systems is the increased mass per satellite. A Boeing study indicates that the system weight will double as the cost is reduced to 1/10 the current cost. The effects of this mass increase for the years 2005 to 2010 are seen in
Figure 3.1.5.3-3. This factor is responsible for all the mass increase seen. To be conservative, no additional systems were placed into the model.
Launch Cost Current$1,000/lb.$600/lb.
High Probability (klb/yr.)295058
Medium Probability (Klb/yr.)416981
Low Probability (klb/yr.)392666784

Figure 3.1.5.3-3. Mass Demand Changes as a Result of Changing Launch Cost

3.1.5.4 Prospective Users

Prospective customers of the CSTS system for launching MSS satellites are primarily the current customers of launch systems and the current developers of the newer entries. These include such systems as being championed by InMarSat, Orbcom, VITA, Iridium, Globalstar. Appendix B.2 contains a listing of potential MSS satellites.

3.1.5.5 CSTS Needs and Attributes

3.1.5.5.1 Transportation System Characteristics

This category of communications satellites differs from its counterparts in both size and number. The vast majority of MSS satellites constellations are composed of 10 to 924 identical satellites. All the prospective systems need one-half to all of their satellites (minus spares) in orbit to earn revenue. This has caused launch strategies to be developed in which responsiveness and cost effectiveness are at a premium.

Launch strategies developed to date are to comanifest anywhere from two to seven satellites together. Reliability and responsiveness are deemed so important that satellite owners are selecting multiple launch vehicles.

The launch requirements for LEO MSS systems are among the least complex of all satellites. Mass requirements are between 500 to 2,000 lb into polar LEO orbit. However, due to the criticality of having a large number of satellites operating at all times, short callup times are required. Manufacturers have developed a hot ground satellite approach to satisfy this problem. Making a launch vehicle available on demand would greatly increase MSS system dependability and would help the launch vehicle capture all the market. Reliability of service is extremely important. A reliability of 0.98 would be appropriate.

3.1.5.5.2 Ground Handling

Existing ground facilities are proving to be adequate to service this market area. No new special provisions are envisioned to be needed. Typically the satellite manufacturer supplies all unique aerospace ground equipment, including that required for handling. Satellites typically require facilities for hazardous processing such as loading of hydrazine. The launch provider typically transports the payload from the spacecraft processing facility to the launch vehicle.

3.1.6 Positioning Satellite Service

3.1.6.1 Market Description

The global positioning system (GPS) was originally designed to allows its users to located any position near the Earth, vertically and horizontally, to within 16m accuracy. This is accomplished by using the Navstar (Navigation System using Timing and Ranging) satellite network, consisting of a 24-satellite constellation with eight satellites positioned in three different planes parked in sun-synchronous 12-hr, 20,200 km orbits. Continual progress is being made that refines that location accuracy to levels down in the single meters. This system is in the process of transitioning over from a sole U.S. government DOD user to include in large part the commercial industry. Users range from foot solders in Desert Storm and aircraft pilots on the military side to mapping and excavating with heavy equipment on the commercial side. This market evaluation was focused on the impacts to this system that reduced launched cost would have. These impacts might possibly increase the number of launches per year and stimulate additional market growth from the user community that would increase demand for a larger network.

Application Description

The global positioning space market consists of multiple satellites that provide precision timing and ranging data signals that are globally distributed. This system, unlike others, does not have to make the transition from a current application to a space application. It's considered an existing space market at the present. This 24-satellite constellation allows any user to take advantage of the signals it generates at any location lower than 20,200 km in altitude.

Although the signal is encrypted and was originally designed for predominantly government use during war times and for nuclear surveillance, the commercial industry was originally allowed to use the signal in a de-rated from. The onset of Desert Storm changed the involvement of the private sector due to their earlier availability of receiver units over the government suppliers, who had to comply with additional specifications and procedures. The government's purchase of large numbers of receivers from the private sector sparked a supplier frenzy and stimulated the commercial industries' availability and innovative uses of the GPS signal for various applications.

The signal is currently free to the user community and the government has stated that they have no plans of changing that for the next 10 years. This adds additional momentum to the rapid development of new innovative applications of this timing and velocity signal. Without the added user fee, suppliers can realize larger profits while at the same time keeping unit costs to the user very low. The typical receiver unit cost is less than $1000 and the number of suppliers has grown to more than 100.

The current market, in its unexpanded form, is not unfamiliar with this type of capability. LORAN is just one electronic navigation system that preceded the GPS network. Other space-based positioning systems such as Transit and Geostar have been used but are being phased out of the market.

Current market stimulus is being driven by cost and other benefits specific to navigation applications such as aircraft inflight positioning. Large availability of inexpensive receivers and the strong synergy of this system to other systems like vehicle tracking with local wireless communications and Geographic Information System (GIS) software aid in the development of this market. Market growth is primarily in the ground systems applications of the GPS signal. The growth rate varies, dependent on forecaster, in excess of 20% annually, with projected future GPS-related markets in the tens of billions of dollars for mainly ground system applications.

3.1.6.2 Study Approach

The methodology used for this section is consistent with the process described in Section 3.1.3.2 for the FSS market area.

3.1.6.3 Market Assessment and Projection

This market is expanding fast and is the middle of a transition from predominantly government applications to a more commercial centered user base. There has been concern expressed by domestic and foreign commercial industries alike over the U.S. government DOD controlled system and the future impacts of this to their particular industry. These concerns center around the political instability and policy evolutionary process related to a global network and their potentially adverse impact on the availability of this system. International discussions of this market area focus on alternate solutions to the owner/user conflict. Alternate options include a piggyback system on the Iridium communication network, being developed by Motorola, utilization of the Russian communications satellites system already in existence, or even deploying a second GPS network owned by the private sector. At present no alternate decisions have been made and usage will continue on the current GPS system.

To give a better assessment of this market and its possible future growth three different probabilities were identified and evaluated, the three being a high, medium, and low probability of occurrence.

The high probability market consists of the basic 24-satellite constellation and the maintenance of this already existing network. Each satellite was assumed to have a life of 10 years for the block GPS satellites. This does not effect the block 2R system designated to start being launched in the 1996-97 time frame. No additional GPS satellites are planned for this system.

The medium probability market has growth over the high market in that six additional satellites were included to the total number in the constellation. The standard current operational mode for this system is to have a minimum of four Navstars in sight at any one time. With this medium market an additional satellite is included with the original four to make five in sight at any one time. This provides voting between the group and biasing of good data after voting. Once the constellation is increased to 30 satellites the network is maintained at this level.

The low probability market is defined as the one with the lowest probability of occurrence. It consists of increasing the network by 12 satellites to a total of 36. The additional 12 are used to guarantee the uninterrupted use of the network by the domestic and foreign commercial industries. This would only be a consideration when the U.S. government in time of need would require security or priority on the system in war time or any other national/international event.

For the purposes of this market assessment the demand rates for the different probabilities are calculated based on the average life of the satellites being 10 years factored into the total number of satellites in each case. Figure 3.1.6.3-1 shows the different probabilities and the descriptions of each, with a listing of the total satellites in each case and the calculated demand or need rate. The actual estimated launch rate will differ somewhat from the averaged high probability market and will be discussed later in Section 3.1.6.6.1.



Figure 3.1.6.3-1. GPS Satellite Service Launch Rate

Market Infrastructure

Because this market is an existing market the infrastructure is already in place. The launch system was earlier defined as the Atlas E and F and the latter launch system has been defined as the Delta II system. Ground operations for the signal have been routed through the Space Command control center at Falcon AFS in Colorado. The utilization of the signal is controlled by the individual user. This system has the potential to grow in user size and possibly satellite number but the market infrastructure will not vary a great deal. In the extreme case a new system might be deployed to better accommodate the civil sector but the use of a different infrastructure is highly unlikely. The only real change might be the control center location and signal operations.

3.1.6.4 Prospective Users

Aside from the original U.S. government DOD user community, who funded and developed the system, the other potential users are limited only by one's imagination. Applications range from civil engineering to farming and crop stabilization to commercial and military aircraft navigation. With the market growing at a rate of approximately 20% per year and the total number of receivers number over 100,000 with the network only having been put in full operating condition in 1993 (planned) this market will continue to branch out as a typical broadcast market. It should be noted that this market is not confined to the United States alone but has and will continue to branch out to foreign markets as well.

3.1.6.5 CSTS Needs and Attributes

3.1.6.5.1 Transportation System Characteristics

For a CSTS system the existing transportation system requirements and characteristics would be adopted. Slight changes would be made to accommodate the increase in weight of each new block satellite if additional capabilities were incorporated into the network. The current transportation system should be assessed and incorporated into the basic design of a new CSTS if this market is a strong driver for the development of such a vehicle.

The response time of the CSTS system for GPS satellite launches needs to be within a scheduled week (equivalent to the communications satellites). Reliability needs to be greater than 0.95.

3.1.6.5.2 Ground Handling

With the growth of this market being predominantly in the user community the ground handling considerations for the CSTS with respect to this market would take place in the additional ground transportation systems and dedicated processing facilities. Ground transportation systems might be needed to handle small satellite increases in yearly launch rate should the constellation grow from 24 satellites to 30 or 36. Additional dedicated processing facilities would also be needed should the number of satellites increase.

3.1.6.5.3 User/Space Transportation Interfaces

For this market area the user community is distanced from the space transportation interfaces in that the system is only used once on orbit. This requires no special transportation need or accommodations in order for the user community to take advantage of the network.

3.1.6.5.4 Improvements Over Current

No really strong transportation improvements are needed for the utilization of GPS or this market area. Any improvements over the current system would only affect the actual deployment of the system, which would provide no real benefit for the user community.

3.1.6.6 Business Opportunities

3.1.6.6.1 Cost Sensitivities

To evaluate the effects of reduced $/lb transportation cost, ROM estimates of the lb/yr for each of the different probability cases at the different launch cost break points were estimated.
Figure 3.1.6.6-1 shows the historical data for the GPS Navstar satellite weights and the percentage of growth of each block change. A projected weight increase for the block III GPS satellites has been calculated based on the downward trend of weight increases from each previous block change.

Figure 3.1.6.6-1. GPS Satellite Weight Projections

A top-level performance sizing of the system, based on the required Δ velocities needed for the delivery of the satellite using block 2R weights coupled with the trend in weight growth, was used to arrive at the 16,000 lb LEO equivalent weight of the block III system. For this system, assumptions needed to be made that defined the system and the number of stages used. Along with stage count, stage function was needed. The launch system delivered the payload, being the GPS Navstar satellite and the apogee kick motor (AKM), to LEO 28.5 deg inclination 150 nmi circular orbit. From this point the AKM would do a plane change as well as its apogee kick burn to get the satellite into the destination orbit of 55 deg inclination 11,000 nmi circular.

Although this is a non-optimum trajectory for the delivery of this satellite the approach was taken to maintain consistency across the CSTS study. The more optimum approach would be to launch directly into a 55-deg inclination orbit with the launch vehicle and minimize the plane changes required from the entire system. These changes require large Δ V hits to the system, which degrades the overall vehicle performance.

Having taken the different probabilities into account and evaluated this data against the Boeing satellite weight/cost vs launch cost data the projected delivery weights have been calculated for each probability case. The different transportation cost break points for this market analysis are shown in Figure 3.1.6.6-2 as current cost, $1000/lb, $600/lb, and $400/lb. This figure summarizes the weight growth of the GPS satellite, based strictly on the Boeings data curve, as the launch cost/lb decreases. For a fixed constellation like the GPS system where there are no projected planes for additional satellites over and above the different probability cases, satellite weight increases translate into additional functionality of each satellite rather than an increased number of them. These additional functions could be in areas like the nuclear detection system as well as others.



Figure 3.1.6.6-2. Estimated Equivalent LEO Payload Market vs Launch Costs

The analysis shows that the largest growth of 45% in weight is between the current market price and the $1000/lb market. After the first break point the growth is a consistent 10% over each subsequent break. 10% growth on a small fixed constellation is not really significant growth and would need further detailed analysis to determine if this would ever be a strong enough driver to warrant development monies.

3.1.6.6.2 Programmatics

Figure 3.1.6.6-3 shows the historical launch rate of the GPS Navstar constellation beginning with the first production launch in 1978. Block one ran from 1978 to 1985 with several gaps in the number of satellites launched each year. Block 2 began in 1989 and was to finish in 1993 with a full constellation of 24 satellites. Historical data for block 2 runs through 1990 with projected launch rates for 1991-1993 coming from the CNDB 90. Projected launch rates for the block 2R satellites is based on the extended average life of the Navstar from 5 years to 7.5 years in going from the block 1 to the block 2 system. The block III system, which is the main area of concern for this effort, is based on an extended average life of the block 2R system to 10 years. Based on the data available, the actual satellite's life of the block 2R has not yet been refined to anything more than >6 years life. For the purposes of this effort 10-year life was assumed.

Figure 3.1.6.6-3. GPS Satellite Projected Launch Schedule

The block III was also averaged out to a consistent launch rate of three satellites per year over an 8-year period. Because the average life of the Navstar is assumed to be 10 years there are 2 years shown with no launches at all. As was mentioned earlier the average launch rate over 10 years was calculated at 2.4 satellites per year for the high-probability case.

This system is assumed to be an ongoing consistent market with satellite maintenance occurring every 10 years on the network.

3.1.7 Summary

The communications satellite industry has managed to change the world: this industry has managed to link every continent together and has allowed the proliferation of telecommunications, which has allowed for people in diverse locations and cultures to achieve greater understanding of each other. The applications which allowed the communications industry to grow and these cultural benefits to occur are expanding.

Both the number of satellites and the mass on orbit for the communications satellite market segment will continue an overall increase. Two factors will control the number of satellites launched in any particular year. These are replacement requirements and new demand. Replacement satellite launches vary greatly following a predictable pattern. A composite model of all four market areas is found in Figures 3.1.7-1 and -2. These figures show both the yearly variation by probability and cost of launch in satellite number and mass.

This market area was one of the first satellite industries developed and continues and is currently the most important and largest of the commercial space ventures.



Figure 3.1.7-1. Total Number of Communication Satellites as a Function of Launch Cost


Figure 3.1.7-2. Total Number of Communication Satellites as a Function of Launch Cost

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3.1 Communications Market

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