Inflection point within the year for megaconstellations?

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MOUNTAIN VIEW, California – An inflection point is coming in the next six to twelve months for the multibillion dollar satellite megaconstellations, when it will become apparent which ones will succeed and which ones “will take a pause or exit,” Chris Baugh, Northern Sky Research president, said Oct. 9 at the Satellite Innovation 2019 conference.

New communications constellations being built by Amazon, LeoSat, OneWeb, SES, SpaceX and Telesat are in early phases of development. Firms are conducting research and development or starting to launch satellites but they have not yet reached the so-called Valley of Death, where products and services often languish or die.

“We’re in this early phase and we haven’t hit that chasm yet,” Baugh said. “We haven’t seen constellations drop out of the market yet. They’re still clicking along for better or worse.”

There are enormous variations in the size of the proposed constellations and the value of individual satellites. Amazon and SpaceX plan to launch thousands of satellites. In contrast, LeoSat and Telesat have announced plans for 84 and 300 satellites, respectively, but their individual satellites will be more expensive than the ones in the enormous constellations, Baugh said.

With thousands of satellites in the queue, people betting on the success of the megaconstellations “have to come to some kind of belief system that the market will rise exponentially via price, performance, availability, all of those things,” Baugh said. “Because if it doesn’t, we will have an over-saturation problem.”

While some delays in launch schedules are to be expected, Baugh told conference participants to watch for upcoming milestones. “We have to consider that if some of these constellations don’t sign system agreements or manufacturing agreements or if they don’t hit certain funding milestones, it starts to call into question why,” Baugh said.

SpaceX will continue with Starlink, Baugh said. Amazon, though well funded, “is an X factor because they don’t have frequency rights,” he added.

The constellations still need to raise a lot of money and “that is getting challenging,” Baugh said. “Not to rain on the parade but it is a situation that bears watching.”

If the constellations do not make announcements of additional funding from export credit agencies, strategic partners, equity investors or venture capital, “this is something that you need to watch,” Baugh said.

If all the constellations were to succeed, which no one expects, the cost would be a whopping $37 billion including the satellites, launch and associated infrastructure, Baugh said.