STAR TREK
India showcased its new playbook on the global space economy with the commercial launch of 36 privately-owned satellites by ISRO. EPISODE #97
Dear Reader,
A very Happy Monday to you.
Last week the Indian Space Research Organisation (ISRO) raised the bar yet again when its commercial arm successfully placed 36 satellites of OneWeb in Low Earth Orbit (LEO). The satellites—which is part of a constellation of satellites owned by OneWeb proposes to reinvent communication— were launched using the LVM3 launch vehicle developed indigenously and has already undertaken four missions.
The launch from the Satish Dhawan Space Centre in Sriharikota, was negotiated by the commercial arm of ISRO, NewSpace India Limited (NSIL). So not only has ISRO reinforced its claims on mastering and enabling sophisticated technology at low cost to further Indian space ambitions, it has also demonstrated its ability, despite being a public sector entity, to service commercial business opportunities.
So this week I put the spotlight on ISRO and India’s playbook for the global commercial space programme projected to grow to $1 trillion.
The cover picture is last week’s satellite launch and is sourced from ISRO.
A big shoutout to Kartik, Murali, Gautam, Premasundaran, Aashish and Vandana for your informed responses, kind appreciation and amplification of last week’s column. Once again, grateful for the conversation initiated by readers. Gratitude also to all those who responded on Twitter and Linkedin. Reader participation and amplification is key to growing this newsletter community. And, many thanks to readers who hit the like button😊.
DEFYING GRAVITY
Last week the Indian Space Research Organisation (ISRO) raised its performance bar yet again when its commercial arm successfully placed 36 communication satellites of London-based OneWeb in Low Earth Orbit (LEO)—the new genre of satellites.
The satellites—part of a constellation of satellites owned by OneWeb—proposes to reinvent communication by enabling processing of high volume messaging and data with minimal delay using satellites.
They were launched using the LVM3 (Launch Vehicle Mark III), developed indigenously by ISRO to place geo-stationary satellites with a payload capacity of 4T; but can also be employed for launching 6T payloads for LEO.
The launch was a win-win for all stakeholders.
Win-Win
It was OneWeb's 14th launch. As of now the company has a constellation of 462 satellites in orbit. The satellites, which circle the earth evert one hour and 49 minutes, are stacked in 12 rings, with 49 satellites in each level.
Once its entire fleet of 648 LEO satellites are in place, OneWeb will be in position to roll out its services; at the moment the target date for a global roll out is 2023, though it is already up and running in some regions.
The use case of this service is big. Just like the fact that every time we use an ATM we are tapping into a satellite services, in future, remote areas of India too will potentially be able to use broadband beamed through satellite constellations.
Investors in OneWeb include the Bharti group (which owns Airtel), the United Kingdom government and eUTeLSAT, the world's third-largest satellite operator in terms of revenues.
Similarly, it was a feel good moment for ISRO. Its commercial arm, NewSpace India Limited (NSIL), successfully scripted another commercial deal, and the first employing the LMV3.
The first successful execution of a commercial deal by NSIL was the launch of a Brazilian satellite, PSLV-C51/Amazonia-1, in March last year.
Significantly, the latest launch reveals how the private sector is slowly graduating from being a mere vendor to be a commercial partner to ISRO. This is a big plus, besides being another mindset reset and creating a new ecosystem to encourage innovation and startups in space.
It is the beginning of the pivot to private-funded and private-conducted space activities in India.
At the same time, ISRO showcased its abilities to manage a sophisticated project of this scale in a short period to break into the rapidly growing but competitive market for LEOs.
LEOs are unlike the Geosynchronous Equatorial Orbit (GEO) satellites. GEOs are extremely heavy and operate at 36,000 km above the earth.
On the other hand LEOs weigh less than 100 kg and circle the earth at heights of less than 2,000 km; being closer to earth, the cost of the components in the subsystem is that much lower. Consequently, the commercial conversations around satellite launches has shifted from GEO to LEO communication, opening up a new business opportunity.
ISRO chairman Somnath S said as much immediately after the launch: “This will pave way for more launches in the future.”
At the same time the launch added to ISRO’s enviable track record of 100-plus satellite missions, 70-plus launch vehicle missions (including the ones to Mars and the Moon) and the ongoing plan (Gangayaan) to send Indian astronauts to space.
And this at a time when two key commercial rivals, Russia and China, have been classified as global pariahs for differing reasons and hence effectively excluded from most of the satellite launching business.
According to Ernst and Young the business potential of this segment for India is projected at $13 billion by 2025. Not surprising, given that LEO launches are expected to grow from 1,500 satellites a year at present to about 50,000 satellites by 2030—LEOs have a relatively short shelf life and hence have to be replaced.
New Playbook
The developments last week is a fruition of the new playbook for India’s space programme.
Over the last few years the government has worked with ISRO to reinvent the public sector entity by creating a separate arm, NSIL, to manage the commercial operations. This pivot has been calibrated so as to not unsettle the pool of incredible talent housed in ISRO.
At the same time, ISRO and its space assets were opened up for collaboration with the private sector. Last October the Indian Space Association (ISpA)—an industry body for the space industry—was formed to facilitate easier coordination between the government and the private sector.
You may recall that I had written about this last year. Sharing the link in case you wish to re-read it.
Big Data
Interestingly, while ISRO’s accomplishment in satellite launches is exemplary, if you follow the money then the potential is elsewhere.
Due to the dramatic fall in satellite launch costs—from $150,000 to $5,000 per kilo in the last 20 years—the profit margins have shrunk in this segment. The shift to LEOs has only accelerated this process.
Instead, now the spotlight is on the profit margin potential—upwards of 40%—in upstream activities like processing the mass of data beamed down to ground stations and in space-based services (OneWeb).
The bad news is that unlike in satellite launching business, India is yet to prove its mettle in this segment. The good news is that hundreds of startups are rushing in.
Who know, if all goes well, it may well be that the next Unicorn from India, once the dust settles on the ongoing global upheavals, could well be a private space startup.
Recommended Viewing
Sharing the latest post of Capital Calculus on StratNews Global.
If you recall, last week’s newsletter had dwelled on India’s phenomenal achievement of lifting 415 million people out of poverty in 16 years. I followed it up in a conversation with Amarjeet Sinha, the former rural development secretary.
Though the conversation is long (50 minutes) it is full of insights as Amarjeet takes us through the tough battle India waged in the last two decades since the turn of the Millennium to achieve this feat. The turning point was the policy decision to breakdown this fightback in three key dimensions: health, education and standard of living.
Do watch and share your comments and thoughts.
Till we meet again next week. Stay safe.
Dear Anil,
Very interesting article! Enjoyed reading it and learning new facts from it.
Very inspiring read indeed. Got a lot of clarity on the subject too. Thanks.