{"id":56724,"date":"2021-09-08T17:16:18","date_gmt":"2021-09-08T09:16:18","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/operators-balance-new-space-excitement-with-closing-the-customer-business-case\/"},"modified":"2021-09-08T17:16:18","modified_gmt":"2021-09-08T09:16:18","slug":"operators-balance-new-space-excitement-with-closing-the-customer-business-case","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/operators-balance-new-space-excitement-with-closing-the-customer-business-case\/","title":{"rendered":"Operators Balance New Space Excitement With Closing the Customer Business Case"},"content":{"rendered":"<p>Execution and meeting customer needs are critical to making the business case for new satellite Low-Earth Orbit (LEO) companies, major satellite operators said Tuesday at the opening of the SATELLITE 2021 conference. <\/p>\n<p>Executives from LEO upstarts SpaceX and OneWeb, as well as Iridium Communications and Arabsat, provided highlights of their current businesses and weighed in on the financial outlook for the space industry, which has seen dramatic valuations of new space companies. Their insights underscored both the excitement and industry confusion surrounding the sector, as operators seek a future where they can bring broadband connectivity affordably to enterprises and consumers.<\/p>\n<p>\t\t\t\t<img loading=\"lazy\" width=\"300\" height=\"225\" src=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2021\/03\/40k4KquTQwaCNWJyvIg4_VS_ShowDaily20202120Day20220DGTL_-300x225.jpg\" class=\"attachment-medium size-medium\" alt=\"\" style=\"width: 120px; height: auto;\" decoding=\"async\" srcset=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2021\/03\/40k4KquTQwaCNWJyvIg4_VS_ShowDaily20202120Day20220DGTL_-300x225.jpg 300w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2021\/03\/40k4KquTQwaCNWJyvIg4_VS_ShowDaily20202120Day20220DGTL_-800x599.jpg 800w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2021\/03\/40k4KquTQwaCNWJyvIg4_VS_ShowDaily20202120Day20220DGTL_-640x480.jpg 640w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2021\/03\/40k4KquTQwaCNWJyvIg4_VS_ShowDaily20202120Day20220DGTL_.jpg 1280w\" sizes=\"(max-width: 300px) 100vw, 300px\">\t\t\t<\/p>\n<h3 class=\"fs-5 mt-0\">Explore the Show Daily 2021 Day 2 Issue<\/h3>\n<p class=\"mb-0 fs-smaller text-balance\">Check out more from this issue and find your next story to read.<\/p>\n<p>\t\t\t<button class=\"btn btn-primary\" type=\"button\" data-bs-toggle=\"offcanvas\" data-bs-target=\"#offcanvasMENU\" aria-controls=\"offcanvasExample\" aria-label=\"button\" style=\"white-space: nowrap;\"><br \/>\n\t\t\t\tView More <i class=\"bi bi-arrow-right-circle\"><\/i><br \/>\n\t\t\t<\/button><\/p>\n<p>Kicking off the panel, OneWeb CEO Neil Masterson said his firm has spent the last 10 months focusing on execution. OneWeb\u2019s $2.7 billion capital raised more than covers completing its LEO constellation, which is now 44 percent built out. Masterson said by the end of November, it will begin servicing customers 50 degrees North to the North Pole and will provide global coverage by the end of next year.<\/p>\n<p>He emphasized that competition matters because it provides resiliency and choice to customers, which is why collaboration is so critical.   <\/p>\n<p>Bret Johnsen, CFO of SpaceX, highlighted SpaceX\u2019s success both on the launch and operator side, with 21 launches this year and 1,700 Starlink satellites now deployed in Low-Earth Orbit \u2013 enough to turn on global service except over the poles.<\/p>\n<p><script>var AIAD_fcd45f981d570e35cee941b23edc69c7_6a67f96e271ec;googletag.cmd.push(function(){var AIMAP_29b58f13885ebf8ea6b032f958eb0748 = googletag.sizeMapping().addSize([992, 100], [[970, 90], [970, 250]]).addSize([768, 100], [728, 90]).addSize([320, 100], [320, 50]).build();var AIMAP_737ce075cc05dd766c8f8ea08f3faa73 = googletag.sizeMapping().addSize([768, 100], [728, 90]).addSize([320, 100], [320, 50]).build();var AIMAP_21fe3bcfb86a8660aba4e721ee9338f3 = googletag.sizeMapping().addSize([1200, 100], [970, 250]).addSize([768, 100], [600, 300]).addSize([320, 100], [300, 250]).build();AIAD_fcd45f981d570e35cee941b23edc69c7_6a67f96e271ec = googletag.defineSlot('\/987\/satellitetoday.com\/via-satellite-digital-issue-ads', [ [600, 300], [300, 250], [970, 250] ], 'div-gpt-ad-1774631144891- 0-6a67f96e271ee').defineSizeMapping(AIMAP_21fe3bcfb86a8660aba4e721ee9338f3).setCollapseEmptyDiv(true).addService(googletag.pubads());   });<\/script><script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-1774631144891- 0-6a67f96e271ee'); });<\/script><\/p>\n<p>\u201cIt\u2019s clear that we are delivering a product that people want,\u201d said Johnsen, noting that SpaceX has more than a half million deposits and orders on the books and over 100,000 customers.   <\/p>\n<p>SpaceX\u2019s finance chief emphasized that while SpaceX started on the consumer side, it is also focused on enterprise users, and is now working with two telecom providers pursuing the backhaul side of the business.<\/p>\n<p>As the sole Geostationary Orbit (GEO) operator on the panel, Hadi Alhassani, Arabsat\u2019s vice president and chief strategy officer, applauded the positive attention the space sector is getting from new entrants, calling it good for the industry, but was bullish on the relevance of GEOs. He said his firm is profitable and cash flow positive with over 65 percent EBIDTA margin, but admitted there is an oversupply of GEO capacity in Asia, the Middle East, and the Americas. <\/p>\n<p>Iridium Communications, the first to operate in LEO, is now benefiting from its fully deployed Iridium NEXT constellation and record total revenue in 2020.<\/p>\n<p>\u201cInvestors appreciate that we\u2019ve been very focused strategically on a specific segment (mobile satellite services),\u201d said the panel\u2019s elder statesman, Matt Desch, Iridium CEO for the last 15 years, who noted that his company has grown faster than other satellite firms over the last 18 months. <\/p>\n<p>Looking back over his time at Iridium, he recalled being told at his first satellite show that his company \u201ccouldn\u2019t possibly succeed because we were in LEO; that we were crazy to have inter-satellite links.\u201d<\/p>\n<h3>The Space Investment Boon<\/h3>\n<p>The satellite sector is seeing record investor interest, especially from public \u201cblank check\u201d companies, or SPACs, that can quickly merge with a company, bypassing the typical IPO process. Several panelists, including Desch (whose own company was the first space SPAC in 2009), predicted that SPACs are not likely to continue long term.<\/p>\n<p>Desch called Iridium\u2019s Aireon system, which enables global air traffic surveillance, the \u201cmost SPACable\u201d of all the company\u2019s operations, being cashflow positive. However, he has no plans to take it public. \u201cIt\u2019s a very expensive thing to do. You lose a lot of value of your company. You pay a lot of fees,\u201d he said. The excitement for SPACs is \u201cmore a reflection of the exuberance of the market, than it is a strategy or investor approach we would take.\u201d<\/p>\n<p>The industry has come full circle with the current rise of LEOs, where investors now are going after startups, which are going public before they start offering services, while mature satellite operators are going private, Desch said. \u201cIt\u2019s a very weird industry right now \u2013 it\u2019s an interesting and exciting time to be part of it because you have to execute your way through that.\u201d<\/p>\n<p><script>var AIAD_fcd45f981d570e35cee941b23edc69c7_6a67f96e27901;googletag.cmd.push(function(){var AIMAP_29b58f13885ebf8ea6b032f958eb0748 = googletag.sizeMapping().addSize([992, 100], [[970, 90], [970, 250]]).addSize([768, 100], [728, 90]).addSize([320, 100], [320, 50]).build();var AIMAP_737ce075cc05dd766c8f8ea08f3faa73 = googletag.sizeMapping().addSize([768, 100], [728, 90]).addSize([320, 100], [320, 50]).build();var AIMAP_21fe3bcfb86a8660aba4e721ee9338f3 = googletag.sizeMapping().addSize([1200, 100], [970, 250]).addSize([768, 100], [600, 300]).addSize([320, 100], [300, 250]).build();AIAD_fcd45f981d570e35cee941b23edc69c7_6a67f96e27901 = googletag.defineSlot('\/987\/satellitetoday.com\/via-satellite-digital-issue-ads', [ [600, 300], [300, 250], [970, 250] ], 'div-gpt-ad-1774631144891- 0-6a67f96e27902').defineSizeMapping(AIMAP_21fe3bcfb86a8660aba4e721ee9338f3).setCollapseEmptyDiv(true).addService(googletag.pubads());   });<\/script><script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-1774631144891- 0-6a67f96e27902'); });<\/script><\/p>\n<p>Panel moderator Christopher Baugh, president of analyst firm, NSR, noted, \u201cThe big question we get all the time is that the industry doesn\u2019t have a supply problem; it has a demand problem.\u201d <\/p>\n<p>The investment community is struggling to agree on a revenue forecast for many of these new companies where valuations are sky high. <\/p>\n<p>\u201cInvestors jumped into this industry early on and have focused on hype and excitement \u2013 so it\u2019s really hard to compare all these models one-to-one because everyone is in a different state,\u201d Desch said. <\/p>\n<p>In the near term, valuations will be a challenge since \u201cwe\u2019re not using the same benchmarks, or the same timeframes,\u201d he added.<\/p>\n<p>OneWeb\u2019s Masterson agreed, adding that it will ultimately come down to meeting customer needs \u201cat a price point that makes sense to them.\u201d<\/p>\n<p>OneWeb has found that the market varies depending on the part of the world the customer operates in, or the industry being served. \u201cThe customers will decide who will be successful on the basis of the quality of service that we provide,\u201d Masterson said.<\/p>\n<p>Arabsat\u2019s chief strategist said there is a lot of confusion among customers, noting how aviation customers have come to him asking about GEO versus LEO services. This confusion, he explained, translates to not committing to any service because they don\u2019t want to bet wrong and end up with a defunct operator.<\/p>\n<h3>GEOs Place in the New World <\/h3>\n<p>GEOs definitely have a place in the satellite landscape now being dominated by LEO investment, said several panelists. <\/p>\n<p>\u201cGEO is here to stay,\u201d said Alhassani, who noted that his company looked at a couple of LEO investments a few years ago but that none offered a compelling business case.<\/p>\n<p><script>var AIAD_fcd45f981d570e35cee941b23edc69c7_6a67f96e27f70;googletag.cmd.push(function(){var AIMAP_29b58f13885ebf8ea6b032f958eb0748 = googletag.sizeMapping().addSize([992, 100], [[970, 90], [970, 250]]).addSize([768, 100], [728, 90]).addSize([320, 100], [320, 50]).build();var AIMAP_737ce075cc05dd766c8f8ea08f3faa73 = googletag.sizeMapping().addSize([768, 100], [728, 90]).addSize([320, 100], [320, 50]).build();var AIMAP_21fe3bcfb86a8660aba4e721ee9338f3 = googletag.sizeMapping().addSize([1200, 100], [970, 250]).addSize([768, 100], [600, 300]).addSize([320, 100], [300, 250]).build();AIAD_fcd45f981d570e35cee941b23edc69c7_6a67f96e27f70 = googletag.defineSlot('\/987\/satellitetoday.com\/via-satellite-digital-issue-ads', [ [600, 300], [300, 250], [970, 250] ], 'div-gpt-ad-1774631144891- 0-6a67f96e27f71').defineSizeMapping(AIMAP_21fe3bcfb86a8660aba4e721ee9338f3).setCollapseEmptyDiv(true).addService(googletag.pubads());   });<\/script><script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-1774631144891- 0-6a67f96e27f71'); });<\/script><\/p>\n<p>Masterson firmly believe that interoperability with GEO satellites must happen and is common sense. \u201cThe industry has deployed large amounts of money into [these networks]. People don\u2019t switch technology that rapidly.\u201d He cited an example that airlines might use multiple connectivity suppliers. <\/p>\n<h3>Lower Terminal Costs and Strong Cashflow are King<\/h3>\n<p>SpaceX\u2019s Johnsen said that the world has insatiable demand for high-speed, low-latency broadband. \u201cIt\u2019s then about getting the cost point to delivering the service to be compelling,\u201d he said. <\/p>\n<p>Johnsen agreed that it\u2019s all about cash flow. He said SpaceX has taken a different approach by being fully vertically integrated. \u201cWe\u2019re building the satellites ourselves; we\u2019re launching ourselves; we\u2019re building the network ourselves, and critically, we\u2019re building the terminal and dish ourselves.\u201d <\/p>\n<p>Key to hitting an attractive price target is getting the user terminal costs down. \u201cIf we get the terminal cost down that is the holy grail for the consumer business case,\u201d he said.<\/p>\n<p>Asked about the profitability question, Masterson argued that EBIDTA isn\u2019t the right metric for measuring a satcom business\u2019s value, cash flow is. \u201cYou have to have enough cash flow to continue innovating the next generation of technology,\u201d he said.  <\/p>\n<p>With its $3 billion constellation paid off, Iridium has become more valuable to investors. Desch questioned the sustainability of some of the expensive networks that will have to replenish themselves in five years. <\/p>\n<p>\u201cThat\u2019s the real challenge \u2013 it\u2019s not a challenge in the short run because there\u2019s lot of money to throw at them,\u201d he said, noting eventually investors will expect to be paid back and get a return on their investment. <\/p>\n<p>On a positive note, Desch said that all the innovation being poured into LEO networks will benefit the entire industry. \u201cIt\u2019s making stuff cheaper and making stuff better. My next satellites are going to cost a lot less to build than [my current ones].\u201d <strong>VS<\/strong><\/p>\n<p>,<\/p>\n<h2 class=\"widget-title\">In This Issue<\/h2>\n<p>\t\t\t\t\t<!-- post id 410:  \/code\/wp-content\/themes\/ai-beehive\/template-parts\/content\/post-snippet.php --><\/p>\n<figure class=\"overflow-hidden w-100 me-3\">\n<p>\t<img loading=\"lazy\" width=\"300\" height=\"225\" src=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/n2NjNmwLQdu6iDFc3FWw_VS_ShowDaily20202120Day20220DGTL_3-300x225.jpg\" class=\"img-responsive wp-post-image\" alt=\"\" style=\"\" decoding=\"async\" srcset=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/n2NjNmwLQdu6iDFc3FWw_VS_ShowDaily20202120Day20220DGTL_3-300x225.jpg 300w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/n2NjNmwLQdu6iDFc3FWw_VS_ShowDaily20202120Day20220DGTL_3-800x599.jpg 800w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/n2NjNmwLQdu6iDFc3FWw_VS_ShowDaily20202120Day20220DGTL_3-640x480.jpg 640w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/n2NjNmwLQdu6iDFc3FWw_VS_ShowDaily20202120Day20220DGTL_3.jpg 1280w\" sizes=\"(max-width: 300px) 100vw, 300px\">\t\t\t\t\t<\/figure>\n<h3 class=\"fs-4 w-100 line-clamp-3\">\n<p>\t\t\t\tClint Crosier Stands Up the Space-Cloud Nexus With AWS<br \/>\n\t\t<\/h3>\n<p><!-- .post-snippet --><\/p>\n<hr class=\"my-3 d-block d-md-none\">\n\t\t\t\t\t\t<!-- post id 411:  \/code\/wp-content\/themes\/ai-beehive\/template-parts\/content\/post-snippet.php --><\/p>\n<figure class=\"overflow-hidden w-100 me-3\">\n<p>\t<img width=\"300\" height=\"225\" src=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/buCoj55Seq78WXysGYRQ_VS_ShowDaily20202120Day20220DGTL_6-300x225.jpg\" class=\"img-responsive wp-post-image\" alt=\"\" style=\"\" decoding=\"async\" loading=\"lazy\" srcset=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/buCoj55Seq78WXysGYRQ_VS_ShowDaily20202120Day20220DGTL_6-300x225.jpg 300w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/buCoj55Seq78WXysGYRQ_VS_ShowDaily20202120Day20220DGTL_6-800x599.jpg 800w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/buCoj55Seq78WXysGYRQ_VS_ShowDaily20202120Day20220DGTL_6-640x480.jpg 640w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/buCoj55Seq78WXysGYRQ_VS_ShowDaily20202120Day20220DGTL_6.jpg 1280w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\">\t\t\t\t\t<\/figure>\n<h3 class=\"fs-4 w-100 line-clamp-3\">\n<p>\t\t\t\tCustomer Demand for Simplicity Drives Ground System Complexity<br \/>\n\t\t<\/h3>\n<p><!-- .post-snippet --><\/p>\n<hr class=\"my-3\">\n<p>\t\t\t\t\t<!-- post id 413:  \/code\/wp-content\/themes\/ai-beehive\/template-parts\/content\/post-snippet.php --><\/p>\n<figure class=\"overflow-hidden w-100 me-3\">\n<p>\t<img width=\"300\" height=\"225\" src=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/IzLU0zH3TyW8Z6qO979b_VS_ShowDaily20202120Day20220DGTL_5-300x225.jpg\" class=\"img-responsive wp-post-image\" alt=\"\" style=\"\" decoding=\"async\" loading=\"lazy\" srcset=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/IzLU0zH3TyW8Z6qO979b_VS_ShowDaily20202120Day20220DGTL_5-300x225.jpg 300w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/IzLU0zH3TyW8Z6qO979b_VS_ShowDaily20202120Day20220DGTL_5-800x599.jpg 800w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/IzLU0zH3TyW8Z6qO979b_VS_ShowDaily20202120Day20220DGTL_5-640x480.jpg 640w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/IzLU0zH3TyW8Z6qO979b_VS_ShowDaily20202120Day20220DGTL_5.jpg 1280w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\">\t\t\t\t\t<\/figure>\n<h3 class=\"fs-4 w-100 line-clamp-3\">\n<p>\t\t\t\tKymeta and Eutelsat: Industry News for Sept. 8<br \/>\n\t\t<\/h3>\n<p><!-- .post-snippet --><\/p>\n<hr class=\"my-3 d-block d-md-none\">\n\t\t\t\t\t\t<!-- post id 412:  \/code\/wp-content\/themes\/ai-beehive\/template-parts\/content\/post-snippet.php --><\/p>\n<figure class=\"overflow-hidden w-100 me-3\">\n<p>\t<img width=\"300\" height=\"225\" src=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/FSMX3TZpQYCtd6FHEZuL_VS_ShowDaily20202120Day20220DGTL_4-300x225.jpg\" class=\"img-responsive wp-post-image\" alt=\"\" style=\"\" decoding=\"async\" loading=\"lazy\" srcset=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/FSMX3TZpQYCtd6FHEZuL_VS_ShowDaily20202120Day20220DGTL_4-300x225.jpg 300w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/FSMX3TZpQYCtd6FHEZuL_VS_ShowDaily20202120Day20220DGTL_4-800x599.jpg 800w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/FSMX3TZpQYCtd6FHEZuL_VS_ShowDaily20202120Day20220DGTL_4-640x480.jpg 640w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/FSMX3TZpQYCtd6FHEZuL_VS_ShowDaily20202120Day20220DGTL_4.jpg 1280w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\">\t\t\t\t\t<\/figure>\n<h3 class=\"fs-4 w-100 line-clamp-3\">\n<p>\t\t\t\tLEO, Capacity Trends, and Ground Tech: Industry Leaders Debate the Issues of the Day<br \/>\n\t\t<\/h3>\n<p><!-- .post-snippet --><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Execution and meeting customer needs are critical to making the business case for new satellite Low-Earth Orbit (LEO) companies, major satellite operators said Tuesday at the opening of the SATELLITE 2021 conference. Executives from LEO upstarts SpaceX and OneWeb, as well as Iridium Communications and Arabsat, provided highlights of their current businesses and weighed in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":56725,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-56724","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/56724"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=56724"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/56724\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/56725"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=56724"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=56724"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=56724"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}