Space: Russia Surrenders To SpaceX


May 11, 2018: In mid-April 2018 Russia confirmed the obvious and admitted they had lost their huge market share of commercial satellite launches. As recently as 2013 Russia had half that market. Five years later their market share had fallen to about ten percent and Russian showed no signs of regaining their dominance and expected their share of the commercial market to sink to as low as four percent. After 2013 Russia faced growing competition from cheaper, more reliable Chinese satellite launch services. But what really accelerated the Russian decline was the surprising emergence of new American launch technology, mainly the SpaceX reusable launchers (that can regularly return and land intact). This is particularly annoying because it was another unexpected new American technology (fracking) that drove down the world price of Russians main export; oil and natural gas. Fracking also made the United States the major producer of oil and gas and a new competitor for Russia in export markets.

Meanwhile, Russian space industry officials said they would put more emphasis on satellite design and manufacturing, which is a much larger (by about three times) market than launch services. But even there Russia is having problems competing, mainly because of a shortage of skilled engineers and reliable manufacturing capabilities. So while Russia has lost about $2 billion a year in launch business they will probably lose ground on the satellite side of the business as well.

While military satellites get more media attention, the real business of space, and where the Chinese have been putting most of their efforts, is in commercial satellites. The Chinese have noted that since the 1980s space satellites have gone from big business to huge business. By 2012 there were about 1,000 active satellites in orbit, and nearly half of them were American. China wanted to change that by offering the less expensive launch service and satellites to nations that have few if any, satellites of their own.

The number of satellites in use has been going down because individual satellites last longer and can do more. Even with that, the number of satellites will now start to rise rapidly because of the popularity of mini-satellites (under 100 kg/220 pounds). Some of these mini-sats are much smaller (under ten kg/22 pounds) and still useful. In some cases, dozens of mini-sats are put into orbit by one launcher.

About 75 percent of all satellites are non-military. Most of them are commercial, the rest government non-military birds. Since 2001 satellite industry revenues more than doubled, from $89 billion a year to over $200 billion now. The cost of the satellites is less than ten percent of annual satellite revenues. About four percent of the money comes from launching all those satellites and 36 percent of those launches are military. Until SpaceX became a major factor the U.S. had about a third of the launch business, mainly because of the requirement that U.S. classified satellites be launched by American rockets. About half the satellite launches (and two-thirds of the satellites) were for communications, which generates the most income (mostly for TV, followed by data). The U.S. remains the major manufacturer of commercial satellites, with over half of the market. China sees opportunity in all this and has come a long way in a short time to take advantage of it. Russia and the United States have both been using retired ICBMs as cheap satellite launchers and that started with older liquid fuel models. China does not have many older liquid fuel ICBMs and has concentrated on developing more reliable and cheaper solid fuel rockets. This is paying off. Moreover, China will sell launch service to just about anyone who can pay, no questions asked.

Space satellites are a relatively new thing. In 1957 the Russian Sputnik was the first satellite ever put in orbit. The U.S. followed in 1958. Since then, ten other nations have done the same. France launched its first satellite in 1965, Japan and China in 1970, Britain in 1971, and India in 1980. Israel launched its first satellite in 1988. Ukraine did so in 1995. Iran claims to have put a satellite in orbit, but there is no conclusive proof. North Korea put a dead (non-responsive) satellite up in December 2012 and South Korea followed with a successful launch of a very active satellite a month later.

Since 2010 China has launched about 20 satellites a year and by the end of the decade expect to have 200 satellites in orbit. This is about a fifth of the total and nearly half as many as the United States. At that point, China expects to be launching 30 satellites a year and accounting for over a quarter of the worldwide launch capability. All this momentum has been the result of three decades of effort and an enormous spurt of activity since 2010. In the two decades after 1990, China carried out 30 commercial satellite launches, putting 36 satellites in orbit. Now China puts that many satellites up in 18 months.

In late 2015 China successfully tested the latest version of its Long March satellite launcher; Long March 6 (LM 6). This version is optimized for putting multiple small satellites in orbit on the same mission and on short notice. The test launch put twenty small scientific satellites into orbit. LM 6 is a 103 ton liquid fueled rocket that can put a ton of payload into a 700 kilometers high orbit. LM 6 can operate from a standard satellite launch facility or from a TEL (transporter erector launcher) vehicle (which is basically a slightly larger trailer similar to those used for hauling tanks). LM 6 was also designed to be made ready for launch quickly (six days or so) giving it a military capability. That means if China has to get a surveillance or communications satellite in orbit quickly, LM 6 is the solution. China is also developing small surveillance and communications satellites for such emergencies. China, like Russia, will try to duplicate (or simply steal) SpaceX technology but that takes time and there is always the risk of protracted litigation.


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