Russia is trying to adapt to its reduced presence in space. While Russia still spends about $1.6 billion a year on its space program, even that is a financial strain. Most (62 percent) of that goes towards building and maintaining its military satellites, which comprise the majority of their 160 satellites in orbit. Most of the rest went to maintaining 27 GLONASS satellites, the Russian version of GPS. Another $100 million is for maintaining the military satellite launch center at Plesetsk with the remainder going to other ground-based space facilities.
One aspect of the decline became obvious back in early 2018 when 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 now expects their share of the commercial market to sink to as low as four percent.
After 2013 Russia faced growing competition from cheaper and 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 fracking, another unexpected new American technology that drove down the world price of Russians' main export; oil and natural gas. Oil and gas exports are a major source of foreign currency for Russia. Fracking also made the United States the major producer of oil and gas and a new competitor for Russia in export markets. Currently, a dispute with Saudi Arabia over OPEC efforts to keep the oil price led both nations to increase production and flood a market already depressed by an economic recession created by the covid19 virus pandemic. All this makes it even less likely that Russia will muster the financial resources to regain its place in space.
Russian space industry officials suggested putting more emphasis on satellite design and manufacturing, which is a much larger (by about three times) market than launch services. This has long been a major goal for Russia because their satellites still last only half as long as Western ones, mainly because of a shortage of skilled engineers and reliable manufacturing capabilities. The loss of access to Western technology, because of the 2014 Ukraine-related sanctions, limits the Russian ability to improve its abilities in this area as well. So while Russia has lost over $2 billion a year in launch business, they will probably lose ground on the satellite side of the business as well.
One Russian response to all this is concentrating more on ground-based attacks on enemy satellites. This is not something you can export, but it is closely related to work Russia has been doing on new EW (Electronic Warfare) equipment. There is an export market for that. Russia has long been competitive with this technology and the Americans and Chinese are playing catch-up.
Russia has also conducted some impressive anti-satellite technology using satellites designed to get close to other satellites and either examine and photograph them closely or, potentially, damage or disable them without blowing them up and creating more space junk. That stuff threatens everyone’s satellites but the technology can also be used to produce maintenance satellites. There is a growing market for this and Russian “satellite inspection and sabotage” tech can easily be used for less destructive and more exportable and profitable tech.
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. In 2020 there were over 2,200 satellites up there and only about seven percent of them are Russian and 15 percent Chinese. Most of the rest are Western, with the largest number being American. When it comes to military satellites the U.S. has 189, China 105 and Russia a hundred.
Unlike the rest of the world, most Russian satellites are military and about half of these are communications satellites for military use. Another 16 are earth-observation satellites, including high-resolution photo satellites. Many of these earth-observation birds are for monitoring weather and land use. The military needs this data as well and in the West, most of it is obtained from commercial satellites. Russia has few of those so the military must maintain its own. Other nations also use a lot of commercial communications satellites, operated by Western firms, for military communications.
The U.S. and China now dominate the satellite launch business and China is eager to gain more of the satellite launch business by offering the least expensive launch services along with cheaper Chinese made satellites. This is especially attractive to nations that have few if any, satellites of their own. SpaceX tech threatens these Chinese plans although China admits that they are working on developing reusable rockets as well.
The number of satellites launched had been going down because individual satellites lasted longer and could do more. Even with that, the number of satellites up there has been increasing rapidly in the last few years 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 most cases, dozens of mini-sats are put into orbit by one launcher. New satellite communications systems depend on thousands of small, low orbit communication satellites providing high-speed Internet service or even the ability to use ordinary cellphones to send text messages to other cellphones worldwide.
These large satellite networks are mostly a U.S. development and that is one reason why about 46 percent of the satellites in orbit are American. That is also one of the reasons that 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. 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 about 30 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, after several false claims, finally put a satellite in orbit in April 2020. 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 2020 had over 300 satellites in orbit. This is about 15 percent of the total and nearly a third of that the United States has. Now China is trying to launch 30 satellites a year and increase its share of 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. China sees SpaceX tech as a temporary obstacle to its plans to eventually dominate the satellite launch business and orbital space.
One advantage, and problem, has is that it relies on older Russia rocket launcher designs that China improved on and made more reliable. SpaceX uses radical new design concepts that China will have to emulate or improve on to gain a lead. Meanwhile, China continues to improve what they already have. 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 will try to duplicate (or simply steal) SpaceX technology but that takes time and there is always the risk of protracted litigation as well as difficulty in mastering a new, for China, satellite launcher technology.