UPDATE July 17: Sky and Space Global said its three Diamond satellites have successfully demonstrated their RF intersatellite links at up to 2 Mega Symbols per second, in what the company said is a first for nanosatellites. Commercial service from these first three satellites will start “within a few weeks” following more in-orbit testing.
PARIS — Startup narrowband satellite constellation operator Sky and Space Global Ltd. was publicly traded before its first launch, and concluded its preliminary design review for its full constellation three weeks after its first satellites were in orbit and less than 18 months before launch.
Is this backwards? No, it’s New Space, Sky and Space Global officials say, and they’re asking the British regulator to adjust its speed accordingly.
The company announced July 6 that the three pilot spacecraft it launched June 23 were functioning as planned and that commercial operations would begin in September. A preliminary design review for the full constellation of around 200 satellites — said to be more powerful than the first three — has been completed, the company said.
With each milestone, Sky and Space Global is nearing a decision point on whether to remain UK-registered and incur the large licensing and insurance charges imposed by the British regulatory regime, or decamp to another nation.
Current British law treats nanosatellite constellations no differently than large $200 million satellites in geostationary orbit. Each satellite is subject to a licensing fee of 6,500 British pounds ($8,400) and must carry third-party-liabilitiy insurance coverage of 60 million euros ($68 million) per satellite for the full life of the spacecraft.
Can a cubesat constellation afford to be in Britain?
“That’s nice if you have one satellite. That’s not so nice if you have 220 satellites,” said Meidad Pariente, Sky and Space Global’s chief technical officer.
“The overall cap of third-party liability is the same. It doesn’t matter what the size is of the satellite. Will SpaceX, with 4,000 satellites, pay 240 million euros for third-parity liability? I don’t think so. Will OneWeb pay?”
The OneWeb broadband constellation of around 700 satellites is registered in Britain. The first 10 OneWeb satellites are scheduled for launch in mid-2018. OneWeb officials have asked British regulators to review their policies:
OneWeb’s constellation is expected to cost roughly $3.5 billion, according to company estimates. Sky and Space Global spent just $3 million to build and launch its three satellites — launched June 23 aboard India’s PSLV rocket — and estimates its 200-satellite constellation will cost around $150 million.
Joanne Wheeler, a partner in the London office of the law firm Bird & Bird and co-chair of the U.K. Satellite Finance Network, said regulators are aware of the issue. She noted, however, that many nations have third-party-liability requirements for satellites.
“We need to look at different TPL [third-party liability] business models, particularly for the constellations,” Wheeler said at the recent U.K. Space Conference, held in Manchester. Wheeler said British regulators have some leeway in adjusting the insurance requirement on a case-by-case basis.
Addressing the World Space Risk Forum in London June 15, Pariente said Sky and Space Global remains hopeful that the British regulatory regime will be modified to account for the special characteristics of constellations, particularly relatively low-cost programs like his.
If that doesn’t happen, he said, the company would weigh switching its UK registration to some other nation.
“We will try to get the regulators to change,” Pariente said. “I don’t believe it’s too late. But if push comes to shove, that’s what we’ll do [go elsewhere].”
Pariente also said the UK is, along with the United States, the best regulatory agency for satellites, and the Britain’s Ofcom regulatory agency “really helped us with the big boys all around the world” with respect to frequency coordination with the International Telecommunication Union.
Insurers asked to take satellite cross section into account
It’s not just regulators that need to adapt. Pariente suggested that insurance underwriters adjust their rates to account for the fact that small satellites do not pose the same risk as larger ones.
“Being the owner of a nano satellite constellation, I think you can relate to the reason I am trying to push that way,” he said. “Our entire 220-satellite constellation, from a cross section point of view, is like three OneWeb satellites. And do I get some credit from underwriters because I have autonomous avoidance maneuvering” on the satellites?
Completing a PDR after satellites have been launched is one of the run-and-gun aspects that Sky and Space Global managers say is typical of New Space businesses, where license application, design, production, launch and operations happen in a matter of months, not years.
Based in Australia and traded on the Australian Stock Exchange, Sky and Space Global and its prime contractor, GomSpace of Denmark, is designing a constellation of around 200 cubesats for a global S-band voice, data and instant messaging service. The company secured rights to use UHF-band frequencies for telemetry and tracking from the British Defence Ministry.
The company has estimated that the constellation will cost $150 million including satellite design, manufacturing, launch and insurance.
The initial constellation will operate in an equatorial orbit serving customers between 15 degrees north and south of the equator.
The company, which has received U.K. Defense Ministry approval to use the ministry-registered UHF spectrum, has already sold capacity to several customers with a total value of $500,000 per year for three years. Customers include Sat Space Africa Ltd., whose contract is valued at $500,000 to start; BeepTool LLC and Globalsat Group LLC
Sky and Space Global has invited its more than 5,000 investors to think big about the company’s future revenue. The company is traded on the Australian Stock Exchange and as of July 6 had a market capitalization of 130 million Australian dollars.
In a recent investor presentation, the company said it could generate between 600 million and 1 billion Australian dollars in revenue in three to five years from the 220-satellite constellation, selling 25,000-30,000 MHz per year plus 2 billion minutes of voice time from its constellation “at expected market rates.”