- Over the past five years, more than $7 billion has been ploughed into ‘space businesses’ through private equity investments
- In nearly all scenarios of futuristic space exploitation, things boils down to one constant need — ferrying a lot of things to and fro from space
- Because ISRO is a state-owned space agency, it’s commercial endeavours have lacked steam and are tentative at best
As moments of national pride go, ISRO’s world-record feat of sending 104 satellites into orbit in one launch is only comparable to its own previous feats. It is also a powerful underdog story: India’s space budget of $1.2 billion is a pittance compared to China’s $13 billion and NASA’s $18 billion (not counting all the private investments flowing in).
How then, did ISRO manage such a feat? More importantly, what does it mean for India’s place in the global space race?
To answer these questions, it is necessary that we strap on some boosters and launch ourselves into the business of space. Welcome to the third edition of #FactorFuture — our exploratory series on technology, markets and habits that will shape our future.
The business of space
Moore’s law and the internet shrunk our world, and in the process, also space. Satellites in the sky suddenly seemed much closer and way more powerful. More importantly, we could sift through the streams of data they showered down easily (and instantly). All of this meant that more and more businesses wanted their own eyes and ears in the sky.
Sometime in the last half a decade, we entered the entrepreneurial space age. As a result, over the past five years, more than $7 billion has been ploughed into ‘space businesses’ through private equity investments.
Satellites have gotten smaller, cheaper and more powerful. Swarms of nano-satellites have been put in orbits: a total of around 670 nano-satellites have been launched (including ISRO’s recent payloads) and even more are in the works — 500 more are scheduled to be launched in just 2017.
A vast majority of these nano satellites belong to private corporations and universities. The swarm of 88 nano-satellites that ISRO sent up, for example, belongs to PlanetLabs and creates a fleet of 149 satellites, which, working together, can image every square inch of the earth’s landmass, every day. This allows PlanetLabs to monitor everything from agricultural yields to natural disasters.
This data (that we can receive from nano satellites) is powerful and has fuelled a massive satellite services industry that is estimated to be worth more than $120 billion, a satellite manufacturing industry of $17 billion and a launch services industry worth $5 billion.
This is still, what I call, the old space-commerce. Private capital is betting big money beyond satellites on “in-space” businesses — those with products and services that create value in space — like habitats, refuelling and in-space manufacturing, as well as on “planetary” businesses — those adding value near a external moon or planetary surface — like resource prospecting, mining and carrying cargo to the moon and the Mars.
Some believe that there’s money to be made even in space-cleaning services — mopping up the space debris created by junk satellites or pieces of them — like Effective Space Solutions, an in-orbit service provider that wants to drag all the debris crowding the orbit around the earth into a deeper “graveyard-orbit” or AstroScale. The company raised $7.7 million in venture funding to launch little satellites that can “mop-up” space debris from the orbital highways.
However, the gold rush in space, much like on the earth, is likely to emerge from mining for resources, only this time on asteroids. Yes, you heard that right.
By 2030, a robotic mission from NASA will reach and study an asteroid made of iron and metal called Psyche 6, whose potential value of mineral wealth is sufficient to wipe out all global debt, and fuel a lifetime of wealth for every single person on earth. There are already calls that India should exploit the vast resources of helium on the moon to run helium-fuelled nuclear reactors to provide unlimited power to run things on earth.
It’s the blinding glare of these trillions that has private mining companies, like Deep Space Industries and Planetary Resources, building technology to set up the entirely new industry of asteroid mining in an attempt to tap into the riches hidden in some of the 10,000 near-earth asteroids.
Deep Space Industries wants to build cities in space in 30 years. Because ferrying raw materials from the earth is unfeasible, it’s planning to create a supply chain up there.
It would seem that one of the most common science fiction tropes on space commerce — space mining — is actually beginning to happen. It’s all good, just as long as we don’t christen any of these ships Nostromo.
The future’s all about ferrying things into space
Fantastic visions of floating, diamond-filled asteroids often make us forget about some of the real problems of space exploitation — the economics. And, in nearly all scenarios of futuristic space exploitation, it boils down to one constant need — ferrying a lot of things to and fro from space.
And this is the market that’s seeing the most aggressive action.
Over the last decade, humans have launched more rockets than ever before. In 2016 alone, the eight space-faring nations launched 85 times (failing twice) and just about fell shy of the 2014 record of 92 launches. On top was the US with 22 launches, followed closely by China with 21, while India came in fifth (behind Russia and EU) with seven successful launches (a personal high for ISRO).
As the demand for launches have increased, private firms have risen up in the US, the EU, China and Russia to grab the launch services market. And, with market forces, pricing pressures have arrived.
Space X, with a $60 million price-tag per launch, is the poster boy for price disruption. With satellite launch contracts worth $10 billion in hand, its launch buggy, Falcon 9 (with a payload capacity in excess of 8,000 kg), is likely to be extremely busy in the coming months.
Not surprisingly, traditional launch providers are facing the heat. United Launch Alliance, which has a monopoly in launch contracts in the US until Space X arrived, announced that it would fire upto 400 people by the end of 2017 in order to get more ruthless with costs.
In the EU, although Arianespace continues to be the busiest launch provider — thanks to the immensely popular Ariane 5 with a payload capacity of more than 10,000 kg — it has a high price tag that varies from $60-$150 million per launch. The upcoming Ariane 6 claims to be cheaper than Falcon 9, but it won’t come into market until at least 2020.
China, for a change, has been caught napping commercially. To be sure, China has one of the most powerful space programs in the world today. But it’s largely been built in a bubble. However, the winds of change are blowing: In a first, a Chinese private aerospace firm, Landspace Technology Corporation, recently won an international contract to launch satellites.
Amid all this, ISRO’s spectacularly cheap $15–25 million launch costs (depending on where you read) have kept it in the reckoning for select commercial satellite launches. But it’s capabilities in terms of payload weights (1425 kg to GTO) as well as frequency of launches pales in comparison to the market. Space X, for instance, is targeting 27 launches in 2017.
The launch market continues to get cheaper. Space X and Blue Origin are betting on reusable rockets to drive prices down and hope to bring it into the market in the next few years. ISRO, by comparison, is targeting a reusable launch vehicle by 2030.
At the same time, rockets are getting monstrous. China’s Long March 5 rocket, which tested successfully late last year, has a GTO payload capacity of 14,000 kg, making it almost as powerful as the biggest heavy lifter Delta-4 (from United Launch Alliance) and bigger than Ariane 5 (Arianespace) and Proton launcher (Russia). Even this, however, will be superseded when Space X launches Falcon Heavy this year with 22,200 kg of GTO payload capacity.
There’s more on the way. NASA’s Space Launch System, capable of carrying upto 130,000 kg to the low earth orbit (LEO), is scheduled for launch in 2018, while Jeff Bezos’s Blue Origin is looking to fly its NewGlenn rockets that would carry upto 70,000 kgs to LEO by 2020.
On the other end of the spectrum, companies are building really small launch vehicles, carrying anything from 10 kg for as low as $545K to 400 kg for just a little more than $10 million.
The market is getting crowded.
ISRO’s feat in context
ISRO’s world-record launch of 104 satellites into the orbit is even more impressive when you consider that it’s a huge step up in the number of satellites launched compared to previous years (33 in 2016, 20 in 2015 and 8 in 2014). It’s just getting started in 2017.
This year, ISRO has already sent up 101 foreign satellites (compared to 22, 17, 5 and six in each of the previous years), thanks to its ingenuity in finding more efficient ways to pack more payloads (read satellites) into restricted space and release them correctly.
Yet, ISRO’s commercial wins in the rapidly emerging space industry have been tentative at best. They are a result of the serendipitous demand-supply goldilocks zone for launches, thanks to the big boom in the market for satellites and the slower evolution of launch technology. It’s simple math — demand increased much faster than supply.
ISRO’s commercial arm Antrix makes money from launch services based on the weight it carries. Here’s the weight of payloads that ISRO has been carrying — broken into needs for our own country and the commercial satellites (almost all foreign).
This immediately reveals a few things:
- ISRO’s launch capacity is very limited — In 2016, it carried just over 9,000 kg into orbit over seven launches.
- Of this limited capacity, ISRO still uses a significant launch capacity to serve local demands / needs. These aren’t commercial launches as the Indian government does not “pay” Antrix for these launch services. For instance, only 809 kgs of commercial payload was carried in 2016. By contrast, Space X carried over 20,000 kgs in the same year (all commercial) over eight successful launches.
- While demand for small satellites means ISRO can put more commercial satellites in orbit, it doesn’t mean much for revenues. For instance, despite carrying 101 satellites as part of commercial payload in 2017, ISRO hasn’t carried even one-third of the total commercial payload capacity it did in 2015 (when it launched just 17 commercial satellites).
- As a result, the commercial payloads are a very small percentage of the limited capacity ISRO has.
The obvious solution to these problems is to carry more weight and do more launches. But ISRO faces some hard constraints here.
ISRO’s record-high (for itself) launch of seven times a year is nowhere close to enough. But increasing it drastically (even 2x) is not easy as ISRO needs to find at least one alternative launch location and aggressively outsource a lot of work.
The bigger constraint is the carrying capacity of ISRO’s launchers. ISRO’s most trusted (and only commercial) launch buggy, PSLV, can carry payloads of upto 1750 kg (to low earth orbits) and less than 1,500 kg to the geostationary orbit (GTO). While the GSLV MKII can launch more (2500 kgs), ISRO is yet to deploy it for commercial launches. But even a GSLV MKII is nowhere close to sufficient. ISRO itself has to depend on other launchers like Ariane 5 to put some of India’s heavier satellites in orbit (paying a hefty fee in these cases).
ISRO’s record, therefore, is a breakthrough in numbers, and not necessarily in technology. To be sure, ISRO continues to innovate and expand its capabilities. It’s upcoming launch of GSLV MKIII, with the capacity to carry 4,000 kgs to the GTO, is an important milestone. It will continue to remain a strategic cog for the country in expanding our space capabilities and reducing dependency on the external market (or countries).
But therein also lies its problem.
ISRO is a state-owned space agency, responsible for servicing the government’s needs rather than a space company relentlessly looking to build a business. As a result, and due to no fault of ISRO, it’s commercial endeavours have lacked steam.
And it is likely to remain that way until and unless the government decides to separate commercial interests and open it up to market forces.