Associate Administrator for

Commercial Space Transportation (AST)

May 1998

1998 LEO COMMERCIAL

MARKET PROJECTIONS
ABOUT THE ASSOCIATE ADMINISTRATOR FOR

COMMERCIAL SPACE TRANSPORTATION (AST)

The Federal Aviation Administration’s

Associate Administrator for Commercial Space

Transportation (AST) licenses and regulates

U.S. commercial space launch activity as

authorized by Executive Order 12465 and

Commercial Expendable Launch Vehicle

Activities, Title 49 of the United States Code,

Subtitle IX, Chapter 701 (formerly the

Commercial Space Launch Act of 1984). AST’s

mission is to regulate the U.S. commercial launch

industry and license commercial launch

operations and sites to protect public health and

safety, the safety of property, and the national

security and foreign policy interests of the

United States during commercial launch

operations. In addition, the statute and the 1996

National Space Policy direct the Federal

Aviation Administration to encourage, facilitate,

and promote the U.S. commercial space

transportation industry.

Cover Photo Credits (clockwise, from top left)

ORBCOMM Global LP (1997). Stack of eight

ORBCOMM satellites in final production. The

satellites were successfully launched on December 23,

1997 from Vandenberg Air Force Base.

Teledesic LLC (1997). Computer-rendered drawing

of a Teledesic satellite in low Earth orbit.

The Boeing Company (1998). Second Globalstar

launch on a Delta II 7420. The successful launch

took place on April 24, 1998 from Cape Canaveral

Air Station.

Orbital Sciences Corporation (1997). Eight

ORBCOMM satellites mated to a Pegasus XL,

which successfully launched from Vandenberg Air

Force Base, CA on December 23, 1997.

Globalstar LP (1998). Video image showing four

Globalstar satellites being deployed in low Earth

orbit. The first such launch took place February 14,

1998 from Cape Canaveral Air Station.

Iridium LLC (1997). Iridium satellites being mated

to a Delta upper stage at Vandenberg Air Force Base,

CA, in early April 1997. The satellites were

successfully launched May 5, 1997.
FEDERAL AVIATION ADMINISTRATION PAGE i

Associate Administrator for Commercial Space Transportation (AST)

EXECUTIVE SUMMARY

The Federal Aviation Administration’s

Associate Administrator for Commercial Space

Transportation (AST) has prepared a projection

of the low Earth orbit (LEO) commercial satellite

launch market for the period 1998 to 2010. The

1998 LEO Commercial Market Projections is the

fifth annual assessment of launch demand for all

commercial space systems in orbits other than

geosynchronous orbit (GEO), and addresses

launches to LEO, medium Earth orbit (MEO),

and elliptical orbits (ELI). Launch demand was

assessed for Big, Little, and Broadband LEO

telecommunications systems, remote sensing

satellites, and foreign scientific payloads.

The most significant change between the

1998 LEO Commercial Market Projections and

last year’s forecast is the inclusion of two

Broadband LEO systems in the “baseline”

scenario, compared with only one broadband

system in last year’s “high growth” scenario.

Over the past year, there has been significant

progress toward the development of Broadband

LEO systems, as well as applications to the

Federal Communications Commission (FCC) for

at least 10 additional Broadband LEO systems.

The past year was also noteworthy for the

first deployment launches of Big LEO systems—

those for Iridium and Globalstar. A large number

of applications were also submitted to the FCC

for Big LEO follow-on and expansion systems.

In addition, Little LEO operators reached a

spectrum sharing agreement and the remaining

Little LEO applicants received FCC licenses.

For the 1998 LEO Commercial Market

Projections, AST has developed two scenarios

assessing LEO satellite and launch services

demand through 2010—a “baseline” scenario

and a “robust market” scenario. The “baseline”

scenario assesses launch demand for those

systems whose development and deployment

currently appears likely during the forecast

period, as assessed by AST. The “robust

market” scenario assumes that market demand

for LEO satellite services is sufficient to support

expanded follow-on systems, as well as the

entrance of new service providers. Both

scenarios include commercial remote sensing

and foreign scientific payloads.

Based on the information provided in this

report, AST projects the following scenarios:

• Baseline Scenario: deployment and replenishment of four Big LEO, three Little LEO,

and two Broadband LEO systems.

• Robust Market Scenario: deployment and

replenishment of five Big LEO, four Little

LEO, and three Broadband LEO systems.

The baseline scenario projects that 1,202

payloads will be deployed between 1998-2010.

Looking at only the 10-year period, 1998-2007,

the baseline scenario projects 1,044 payloads will

be deployed, compared with 980 in last year’s

high growth scenario over a similar 10-year

period. The robust market scenario projects that

1,540 payloads will be deployed over the forecast

period 1998-2010, with 1,265 from 1998-2007.

The demand for commercial launches to LEO

for the baseline scenario is projected to average

19 launches annually of medium-to-heavy launch

vehicles, plus 12 launches annually of small

launch vehicles. The number of launches per

year is expected to fluctuate widely from the

average, peaking with the deployment of

Broadband LEO systems in 2002 and 2003, and

again with the deployment of Big LEO follow-on

systems in 2005 and 2006. Launch demand for

the robust market scenario is projected to average

24 launches of medium-to-heavy launch vehicles

and 14 launches of small vehicles annually.
FEDERAL AVIATION ADMINISTRATION PAGE 1

Associate Administrator for Commercial Space Transportation (AST)

INTRODUCTION

Commercial launch demand is driven by the

telecommunications services market, which

provides telephony, television broadcasting, and

data communications worldwide using satellites

in geosynchronous orbit (GEO) and, more

recently, low Earth orbit (LEO), medium Earth

orbit (MEO), and elliptical orbits (ELI).

In order to assess the demand for commercial

launch services resulting from the deployment of

LEO satellite systems, the Federal Aviation

Administration’s Associate Administrator for

Commercial Space Transportation (AST)

compiles the LEO Commercial Market

Projections on an annual basis. This report was

developed based on AST research and

discussions with industry, including satellite

service providers, satellite manufacturers, launch

service providers, and independent analysts. 

LEO Commercial Market Sectors

To assess demand for commercial launches

to LEO, it is first necessary to understand the

range of proposed LEO satellite systems. Multisatellite systems––dedicated to serving the

telecommunications markets––will produce the

highest level of demand for LEO launch services

during the forecast period. Multi-satellite

systems are being developed in three categories:

• “Big LEO” systems providing voice and data

communications and operating in the 1-2

GHz frequency range. Target markets

include mobile business users and fixed-site

users in rural areas not served by

conventional communications systems.

• “Little LEO” systems providing narrowband

data communications such as e-mail, twoway paging, and messaging using frequencies

below 1 GHz. Target markets include

automated meter reading and fleet tracking.

• “Broadband LEO” systems providing highbandwidth data communications, including

Internet, videoconferencing, and high-speed

data services using Ku-band (12-17 GHz),

Ka-band (17-30 GHz), V-band (36-45 GHz),

and Q-band (46-56 GHz) frequencies.

Each of the three LEO telecommunications

market segments has a different effect on

demand for commercial launch services because

they are orders of magnitude apart in size (i.e.

total mass of the constellation). This is demonstrated in Figure 1, which shows mass to orbit

versus frequency (both uplink and downlink) for

systems currently licensed by the FCC.

Since publication of the 1997 LEO

Projections, applications for a large number of

new Big and Broadband LEO satellite systems

have been filed with the FCC by both current and

new LEO satellite proponents. If developed,

these proposed systems would significantly

increase demand for commercial launch services.

While communications satellites are

expected to be the primary driver of demand for

commercial launch services to LEO, a number of

commercial remote sensing systems are also

Iridium

Globalstar I

Teledesic

ECCO

Ellipso

FAISat

LEO One

Orbcomm

E-Sat

100

1000

10000

100000

1000000

100 1000 10000 100000

Frequency (MHz)

Mass to Orbit (lb)

Little LEOs

Big LEOs

Broadband 

LEOs

Figure 1 Proposed LEO Telecom Systems

(Mass to Orbit vs. Frequency)
1998 LEO COMMERCIAL MARKET PROJECTIONS

PAGE 2 FEDERAL AVIATION ADMINISTRATION

Associate Administrator for Commercial Space Transportation (AST)

expected to be deployed over the next decade.

These remote sensing systems, encompassing a

range of passive and active space-based

techniques for observing the Earth, will

contribute to demand for commercial launches,

particularly for small launch vehicles.

In addition, foreign governments and

research organizations generate a low but steady

level of demand for commercial launches of

payloads to LEO to conduct scientific research,

including communications, microgravity experiments, and life sciences investigations.

Market Scenarios

For each publicly announced system, AST

assessed progress in system design maturity,

licensing, financing, contracting, target market

development, and deployment plans, inter alia.

Based on this information—and underlying

assumptions about the LEO satellite services

markets themselves—AST developed two

market scenarios assessing LEO satellite and

launch demand through 2010: a “baseline”

scenario and a “robust market” scenario.

The “baseline” scenario assesses launch

demand for those systems likely to be developed

and deployed within the forecast period. The

baseline scenario represents AST’s assessment of

how many systems will actually be launched, not

how many will attract enough business to prosper

after deployment. The baseline scenario assumes

that once deployed, failed satellites will be

replaced as needed, and that entire constellations

will be replaced at the end of their useful life by

systems of the same size and number, unless

otherwise specified by the system proponent.

The “robust market” scenario assesses launch

demand in the event that market demand for low

Earth orbit satellite services is sufficiently great

to support expanded follow-on systems, as well

as the entrance of new service providers.

The baseline scenario reflects current

development plans by the LEO satellite

providers, and therefore represents the “baseline”

expected to unfold over the forecast period. The

robust market scenario reflects more

optimistic—but reasonable—assumptions about

greater than expected demand for LEO satellite

services, representing a more “robust market”

than the baseline.

The terminology “baseline” and “robust

market” differ from those used in previous LEO

Commercial Market Projections, which referred

to “modest growth” and “high growth” scenarios.

The term “growth” was deemed no longer

applicable now that deployment of these systems

has begun. While dramatic growth may continue

over the next few years, there will also be years

in which the number of launches will be less than

in the previous year because of the cyclical

nature of LEO satellite system deployment. The

terms “modest” and “high” were also changed

because both scenarios represent significantly

larger numbers of LEO launches as there were no

LEO constellation launches prior to 1997.

Payload and Launch Projections

For each scenario, satellite projections were

converted to launch projections based on an

understanding of individual system deployment

plans, satellite mass, and orbital configuration.

Demand for commercial launches to LEO was

assessed for two launch vehicle sizes—small

launch vehicles (<5,000 lb to LEO, at 100 nm

altitude and 28.5o

 inclination), and medium-toheavy launch vehicles (>5,000 lb, 100 nm, 28.5o

).

The study results do not indicate FAA

support or preference for any particular proposal

or system. Rather, the information provided

reflects an AST assessment of overall trends in

the LEO commercial satellite markets, with the

ultimate purpose of projecting future space

transportation demand.
1998 LEO COMMERCIAL MARKET PROJECTIONS

FEDERAL AVIATION ADMINISTRATION PAGE 3

Associate Administrator for Commercial Space Transportation (AST)

PROPOSED LEO SYSTEMS

As discussed above, there are five categories

of users of commercial launch services. Four of

these are proposed commercial LEO systems,

each planned to meet demand in separate market

segments. Of these four commercial categories,

three—Big LEO, Little LEO, and Broadband

LEO—are for telecommunications applications

and the fourth is for remote sensing. Foreign

scientific payloads represent the fifth category of

commercial launch services user.

For each market segment, AST examined

proposed systems to assess their progress toward

development and launch. AST evaluated:

• System design maturity

• Licensing status and spectrum availability

• Business plan viability and/or maturity

• Spacecraft, ground services equipment, and

launch services contracting status

• Financing status and partnerships secured

• Service provider agreement status

In addition, each market segment was

examined to assess the number of systems it

could sustain. AST assessed potential demand in

each LEO market based on:

• Projected demand for target services (e.g.

mobile telephony, data communications)

• Impact of competing technologies (e.g.

cellular phones, GEO broadband systems)

• Government authorization and/or licensing

processes, including spectrum availability

• Potential limitations on the availability of

capital for space-based systems

Following examination of the data for each

market segment, AST developed the baseline and

robust market scenarios assessing LEO satellite

and launch services demand through 2010.

“Big LEO” Telecommunications Systems

Planned Big LEO systems focus on providing

mobile telephone services to two primary market

segments—business users and fixed-site users.

Two of the Big LEO systems—Iridium and

Globalstar—have begun deployment of their

constellations as of this writing, and one other is

expected to begin deployment in late 1998. In

addition, there have been proposals for at least

15 other Big LEO systems, including follow-on

systems for Iridium and Globalstar. Proposed

Big LEO constellations are detailed in Figure 2.

Proposed Systems In 1990, the FCC received

applications from six companies for Big LEO

systems, also known as Mobile Satellite Services

(MSS) systems. Following a spectrum sharing

plan developed in 1994, licenses were granted to

Iridium, Globalstar, and Odyssey in January

1995. Later that year, AMSC withdrew its

application. Licenses for both ECCO and Ellipso

were granted in June 1997. Costs to develop and

deploy Big LEO systems are estimated to be

between $1.3 and $5 billion.

In September 1997, the FCC finished

accepting applications for use of the 2 GHz band.

As part of this filing, the current Big LEO

licensees submitted applications for follow-on

and expanded systems including Iridium

Macrocell (now known as Salina), Globalstar

GS-2, ECCO II, and Ellipso 2G. During this

round of filings, Inmarsat spin-off ICO Global

Communications filed a letter of intent with the

FCC to operate in the United States. Following

the application, TRW withdrew Odyssey in favor

of a partnership with ICO. At the same time,

Boeing proposed a 16-satellite MEO system to

provide aeronautical support services to the

commercial airline industry.
1998 LEO COMMERCIAL MARKET PROJECTIONS

PAGE 4 FEDERAL AVIATION ADMINISTRATION

Associate Administrator for Commercial Space Transportation (AST)

System Operator Manufacturer # Satellites

(Plus On-Orbit

Spares)

Satellite

Mass (lb)

Orbit First

Launch

Status

Under Development

Iridium Iridium LLC Motorola 66 + 6 1,500 LEO 1997 FCC licensed, January

1995; launching

Globalstar Globalstar LP Alenia Spazio 48 + 8 985 LEO 1998 FCC licensed, January

1995; launching

ICO ICO Global

Communications

Hughes Space

and Comm.

10 + 2 6,050 MEO 1998 FCC letter of intent filed,

September 1997; launch &

satellite contracts signed

ECCO Constellation

Communications,

Inc. (CCI)

Orbital Sciences

Corporation

46 + 81 1,550 LEO 2000 FCC licensed, July 1997; 

Orbital selected satellite,

launch contractor, May 1998

Ellipso Mobile Comm.

Holdings Inc.

(MCHI)

Boeing 16 + 1 2,200 LEO & ELI 2000 FCC licensed, July 1997; 

Boeing selected satellite

contractor, May 1998

Proposed

Boeing 2 GHz Boeing TBD 16 6,400 MEO TBD FCC license applied for,

September 1997; 2.0 GHz

ECCO II Constellation

Communications,

Inc. (CCI)

TBD 46 + TBD 1,290 LEO TBD FCC license applied for,

September 1997; 2.0 GHz

Ellipso 2G Mobile Comm.

Holdings Inc.

(MCHI)

TBD 26 + TBD 2,900 LEO & ELI TBD FCC license applied for,

September 1997; 2.0 GHz

Globalstar GS-2 Globalstar LP TBD 64 + TBD 1,830 LEO2 TBD FCC license applied for,

September 1997; 2.0 GHz

Gonets-R Smolsat 

(Russia)

NPO PM 48 2,100 LEO TBD Status unknown

Iridium II/Laredo Iridium LLC TBD 66 + 6 1,500 LEO TBD Iridium follow-on; to use

original Iridium FCC license

Iridium Next Generation (INX)/Salina

(aka Macrocell)

Iridium LLC TBD 96 + TBD 3,775 LEO TBD FCC license applied for,

September 1997; 2.0 GHz

Koskon Koskon Consortium

(Russia)

AKO Polyot 45 1,900 LEO TBD Status unknown; Koskon

payload tested in 1991

Marathon/Mayak Informkosmos

(Russia)

NPO PM 10 5,533 ELI3 TBD Status unknown

Rostelesat Kompomash

(Russia)

TBD 115 1,850 LEO & MEO TBD Concept definition complete;

awaiting funding

Signal KOSS Consortium

(Russia)

NPO Energia 48 680 LEO TBD Status unknown

Tyulpan NPO Lavotchkin

(Russia)

TBD 6 TBD MEO TBD Status unknown

Canceled Systems

AMSC American Mobile

Satellite Co.

TBD 12 5,500 MEO Canceled FCC license application

withdrawn, January 1997

Odyssey TRW TRW 12 + 0 4,880 MEO Canceled FCC licensed; system

canceled by TRW in 1997

(1) ECCO to initially consist of 12 satellites in equatorial orbit; 42 satellites in inclined orbit to follow.

(2) Globalstar GS-2 also requested authority to operate four GEO satellites in conjunction with the LEO.

(3) Marathon is also proposed to include three Arcos GEO satellites.

Figure 2 Big LEO Satellite Systems
1998 LEO COMMERCIAL MARKET PROJECTIONS

FEDERAL AVIATION ADMINISTRATION PAGE 5

Associate Administrator for Commercial Space Transportation (AST)

In the international arena, only Russia has

proposed developing Big LEO systems (besides

London-based ICO). The development of one or

more of the proposed Russian systems will likely

not affect U.S. commercial launch demand, as

they will probably not use U.S. launch services.

Market Overview Planned Big LEO systems

focus on providing mobile telephony and paging

to two primary markets—international business

travelers and rural fixed-site users. Big LEO

systems can enable international travelers to

connect to public switched telephone networks

(PSTNs) from anywhere in the world via

satellite. In addition, several Big LEOs propose

the use of dual-mode handsets that permit users

to use lower-cost cellular networks if available.

Big LEOs can also provide telephone services to

rural users in developing countries through fixed

sites, or so-called “village phone booths.”

Installation of fixed-site satellite phones is

expected to be more cost effective than building

traditional terrestrial or cellular infrastructures.

Long-term demand for mobile telephony is

likely to be extremely robust. Worldwide, there

are more than 100 million subscribers to analog

and digital mobile telephone services, with

growth rates consistently in double digits.

According to the International Telecommunications Union (ITU), demand for conventional

wireline telephone services in developing

countries is growing at an annual rate of 11

percent, suggesting a growing market for service

to fixed-site users in remote locations.

Estimates of the number of subscribers Big

LEO operators will attract ranges from several

million to as high as 42 million subscribers

worldwide. Typical business plans for the Big

LEO providers project a more modest three

million subscribers per provider by 2002.

Competition Global mobile satellite telephony

will face competition from the expansion of

terrestrial and cellular networks as well as GEO

satellite service providers offering regional

telephony services. In general, satellite systems

cannot compete directly with terrestrial wireless

and wireline infrastructure in areas of high

population density, either in terms of price or in

terms of service quality. However, satellite

service providers may be more effective in

competing for international business travelers

accustomed to paying high per-minute rates for

telephone services. In addition, satellite systems

can acquire fixed-site customers where terrestrial

infrastructure does not exist, or is not practical

due to low population density or terrain.

Competition will also come from GEO

satellites providing regional mobile telephony,

which have competitive advantages and

disadvantages compared to LEO systems. While

proposed GEO systems provide regional rather

than global services, they will likely offer mobile

and fixed-site telephony for lower cost than LEO

systems. However, it is likely that both types of

systems will be deployed, with each developing

market niches based on price and service offered.

Market Demand Scenarios It is AST’s

assessment that under the baseline scenario, four

Big LEO systems will be deployed and

replenished through 2010. Two systems are

already being deployed (Iridium and Globalstar)

and construction of a third, ICO, is well under

way with launches to begin in late 1998. AST

projects deployment of a fourth Big LEO system

in late 2000. AST projects that each Big LEO

operator will deploy follow-on systems with

similar characteristics at the end of each initial

system’s lifetime.

It is AST’s assessment that under the robust

market scenario, five Big LEO systems will be

deployed and replenished. At the end of its onorbit lifetime, each system would be replaced by

higher capacity follow-on, or expansion, systems

to meet growing market demand.
1998 LEO COMMERCIAL MARKET PROJECTIONS

PAGE 6 FEDERAL AVIATION ADMINISTRATION

Associate Administrator for Commercial Space Transportation (AST)

“Little LEO” Telecommunications Systems

Planned Little LEO systems will provide

narrowband data services such as e-mail, twoway paging, messaging, remote data monitoring,

and asset tracking to fixed and mobile users

using frequencies below 1 GHz. Over the last

year, ORBCOMM began full-scale deployment

and three additional systems received licenses—

LEO One USA, FAISat, and E-Sat. Proposed

Little LEO systems are shown in Figure 3.

Proposed Systems Little LEOs have been

proposed by a wide variety of commercial and

quasi-commercial organizations using store-andforward capabilities (storing received messages

until in view of a ground center) or functioning

as relay systems. Users will employ hand-held or

vehicle-mounted transmitter/receivers, using

low-power omni-directional antennas. Proposed

Little LEO systems are expected to cost between

$50 and $300 million.

In 1990, Orbital Sciences Corporation,

Starsys, and Volunteers in Technical Assistance

(VITA) requested FCC licenses for Little LEO

systems. Licenses were issued to all three in

1995 following spectrum allocation by the ITU

and agreement on spectrum sharing. A second

round of filings in 1995 attracted five new

applicants—E-Sat, CTA, LEO One USA, Final

Analysis, and GE Americom. CTA’s GEMNet,

GE Americom, and Starsys are no longer being

pursued. In late 1997, a spectrum sharing

agreement was reached among the remaining

applicants—ORBCOMM, E-Sat, FAISat, LEO

One, and VITA. In February 1998, the FCC

licensed LEO One. In March 1998, FAISat and

E-Sat were licensed and ORBCOMM and VITA

received authority for modest system expansions.

In addition, a number of proposed

“constellations” of mini- and micro-satellites and

communications payloads exist to serve

narrowband data markets, shown in Figure 4.

These systems are expected to be deployed as

secondary payloads or as piggybacks on other

satellites. As such, they do not represent drivers

of demand for commercial launch services.

Market Overview Business plans for Little

LEO providers indicate that a major expected

market is automated meter reading, where data

are collected from fixed assets on the ground.

Another important market is expected to be

mobile asset tracking (such as monitoring

trucking fleets) using both positioning and

messaging. Several Little LEO providers plan to

offer paging, text messaging, and e-mail using

low-cost ground receivers. According to an ITU

study, the satellite addressable messaging market

could be as large as 43 million subscribers, of

which 18 million are in North America.

Competition Little LEO service providers will

face competition from both terrestrial and

satellite service providers. Because of the

relatively low system and ground terminal costs,

as well as their global nature, Little LEO systems

are expected to be competitive with conventional

wireless technology.

Many proposed Big LEO systems also plan

to offer position location, tracking, messaging,

and e-mail as part of their core services, and may

be competitive with Little LEOs on price in

selected markets. However, the success of Little

LEOs will depend on tailoring equipment to

specific market niches, which Big LEO providers

may not find economically viable.

Market Demand Scenarios It is AST’s

assessment that under the baseline scenario, three

Little LEO systems will be deployed and

replenished over the forecast period. One

system, ORBCOMM, has already begun

deployment and a second, FAISat, has

experimental satellites in orbit. Under the robust

market scenario, AST projects deployment of

four Little LEO systems.
1998 LEO COMMERCIAL MARKET PROJECTIONS

FEDERAL AVIATION ADMINISTRATION PAGE 7

Associate Administrator for Commercial Space Transportation (AST)

System Operator Manufacturer # Satellites

(Plus On-Orbit

Spares)

Satellite

Mass (lb)

Orbit First

Launch

Status

Under Development

ORBCOMM ORBCOMM

Global LP

Orbital Sciences

Corporation

481 95 LEO 19972 FCC licensed, October

1994; launching

FAISat Final Analysis

Communications

Final Analysis,

Inc.

38 332 LEO 20003 FCC licensed, March 1998

E-Sat E-Sat, Inc. TBD 6 250 LEO 2000 FCC licensed, March 1998

LEO One USA LEO One USA TBD 40 + 8 275 LEO 20014 FCC licensed, February

1998

Gonets-D Smolsat

(Russia)

NPO PM 36 510 LEO TBD Based on military system;

3 experimental sats on-orbit

KITComm KITComm

(Australia)

AeroAstro LLC 21 220 LEO TBD Licensed by Australia

Not Yet Under Development

Courier/Convert ELAS Courier

Complex (Russia)

Moscow Institute

Thermotechnics

8 to 12 1,107 LEO TBD Status unknown

LEO One

Panamericana

LEO One Panam.

(Mexico)

TBD 12 330 LEO TBD Licensed for operations by

the Mexican government

LEOPACK Space Agency of

Ukraine

TBD 28 TBD LEO TBD Unfunded

Canceled Systems

Starsys GE/Starsys Alcatel 24 + TBD 165 LEO canceled FCC licensed, 1995;

system canceled 1997

GE Americom GE Americom TBD 24 33 LEO canceled Merged with Starsys in 1996

GEMNet CTA Space

Systems

CTA Space

Systems

38 + TBD 100 LEO canceled CTA purchased by OSC;

GEMNet canceled

(1) In March 1998, ORBCOMM received authority to expand the basic 28-satellite constellation to 48.

(2) ORBCOMM launched two experimental satellites in 1995; full constellation deployment began in 1997.

(3) FAISat is currently operating two experimental satellites under an experimental license.

(4) LEO One USA plans to launch two test satellites in 2000.

Figure 3 Little LEO Satellite Systems

System Operator Manufacturer # Satellites

(Plus On-Orbit

Spares)

Satellite

Mass (lb)

Orbit First

Launch

Status

VITASat Volunteers in

Technical

Assistance

Final Analysis,

Inc.

2 198 LEO 1999 FCC licensed, 1995; may

piggyback communications

package on other satellites

SAFIR OHB Teledata

(Germany)

OHB Systems 6 132 LEO 1998 In development; launch as

secondary Ariane payload

IRIS SAIT Systems

(Belgium)

OHB Systems 2 144 LEO 1998 In development

Temisat Telespazio (Italy) Kayser Threde 7 88 LEO 1998 In development

Elekon NPO PM/

Elbe Space

(Russia/German)

NPO PM 7 TBD LEO TBD Status unknown; comm

package piggybacks on

Tsikada navigation sats

Figure 4 “Micro” LEO Satellite and Payload Proposals
1998 LEO COMMERCIAL MARKET PROJECTIONS

PAGE 8 FEDERAL AVIATION ADMINISTRATION

Associate Administrator for Commercial Space Transportation (AST)

“Broadband LEO” Systems

Planned Broadband LEO systems will

provide high bandwidth data transmission for

such applications as video-teleconferencing,

Internet access, and high-speed corporate data

communications. Since release of the 1997 LEO

Projections, progress has been made toward the

development of several Broadband LEO systems,

and a large number of new and follow-on

systems have been proposed. Broadband LEO

systems are summarized in Figure 5.

Proposed Systems A range of companies has

submitted license applications to the FCC to

build and operate broadband satellite data

networks. In 1997, the FCC issued licenses to

several applicants for the use of Ka-band

frequencies for broadband data applications.

While the majority of these licenses are for GEO

satellites, one LEO system, Teledesic, was

licensed in 1997. Several additional Ka-band

applicants are currently under consideration,

including Motorola’s Celestri and Hughes’

Spaceway NGSO (non-geosynchronous orbit).

Alcatel Espace has filed license applications for

Skybridge, a Ku-band constellation, and

Skybridge II, a Ka-band follow-on system.

Broadband LEO systems are estimated to cost

between $5 and $15 billion.

In September 1997, the FCC finished

accepting applications for the use of frequency

bands between 30 and 60 GHz, commonly

referred to as V-band (36-45 GHz) and Q-band

(46-56 GHz). The FCC received 13 applications,

including seven proposals for constellations

using LEO and MEO orbits. Several applicants

proposed hybrid constellations that pair LEO or

MEO satellites with GEO satellites.

Market Overview Proposed broadband data

communication satellite systems plan to provide

instant, worldwide high-speed data transmission.

Target markets for broadband satellite systems

include multinational corporate data transmission

and Internet service providers. Global demand

for future broadband communication services is

expected to be robust; market estimates are in the

range of $100 billion by 2006, with satellites

able to address much of that market demand.

Competition Broadband LEO systems will face

competition from planned terrestrial networks

and GEO satellite systems capable of offering

similar high-bandwidth data communications.

The degree to which satellites can capture this

market primarily depends on whether terrestrial

systems will be able to cost-effectively serve the

market. Satellites will be most competitive

where there is no existing terrestrial

infrastructure due to the high cost of installing

wirelines, either fiber optic or copper. Satellites

are less likely to be able to compete directly with

terrestrial infrastructure that provides broadband

services to consumer and business users;

terrestrial systems are likely to be less expensive

on a per-minute basis, and terrestrial wireline

systems do not have to contend with spectrum

limitations or rain attenuation.

Satellite systems have the potential

competitive advantage of providing “bandwidth

on demand,” allowing users to pay only for what

they use, not for open-ended access to the

network, enabling users to better manage costs.

Satellites are also likely to be used to provide

data trunking for terrestrial networks, both as

back-up and surge capacity, similar to satellite

usage for trans-oceanic phone cables today.

LEO and MEO systems providing broadband

services will also compete with planned GEO

broadband systems. AST anticipates that neither

type of system will have sufficient competitive

advantages to outperform the other; the service

quality of LEO systems will attract some users

while the likely lower prices of GEO services

will attract others. As a result, both types of

systems are likely to be deployed.
1998 LEO COMMERCIAL MARKET PROJECTIONS

FEDERAL AVIATION ADMINISTRATION PAGE 9

Associate Administrator for Commercial Space Transportation (AST)

Market Demand Scenarios It is AST’s

assessment that under the baseline scenario, two

Broadband LEO systems will be deployed and

maintained through 2010. Two of the three

systems currently under development have made

significant progress toward realization over the

past year and their deployment appears likely.

However, it is also likely that the actual timing

and configuration of Broadband LEOs could

change over the next few years, impacting launch

demand. This report reflects configuration and

deployment plans as they are known today.

Under the robust market scenario, AST

projects that three Broadband LEO systems will

be deployed and maintained through 2010.

System Operator Manufacturer # Satellites

(Plus On-Orbit

Spares)

Satellite

Mass (lb)

Orbit First

Launch

Status

Under Development

Teledesic Teledesic LLC Boeing 288 + 12 3,300 LEO 20011 FCC licensed, March 1997;

Ka-band

Celestri LEO Motorola Matra Marconi 63 + 7 7,000 LEO2 2002 FCC license applied for,

June 1997; Ka-band

Skybridge Alcatel Espace TBD 64 + 4 1,770 LEO 2002 FCC license applied for,

February 1997; Ku-band

Proposed Systems

@Contact @Contact LLC TBD 16 + 4 7,500 MEO TBD FCC license applied for,

December 1997; Ka-band

GSN (Global EHF

Satellite Network)

TRW TRW 15 13,150 MEO3 2005 FCC license applied for,

September 1997; V-band

Globalstar GS-40 Globalstar LP TBD 80 + TBD 2,700 LEO TBD FCC license applied for,

September 1997; V-band

LM-MEO Lockheed Martin Lockheed Martin 32 4,800 MEO TBD FCC license applied for,

December 1997; Ka-band

and V-band

M-Star Motorola TBD 72 + 12 4,400 LEO TBD FCC license applied for,

September 1996; V/Q-band

Orblink Orbital Sciences

Corporation

Orbital Sciences

Corporation

7 + TBD 4,450 MEO TBD FCC license applied for,

September 1997; V-band

Pentriad Denali Telecom TBD 9 + 3 4,400 ELI TBD FCC license applied for,

September 1997; V-band

Skybridge II Alcatel Espace TBD 96 5,850 LEO TBD FCC license applied for,

December 1997; Ka-band

Spaceway NGSO Hughes Comm. Hughes Space

and Comm.

20 6,300 MEO4 TBD FCC license applied for,

December 1997; Ka-band

Starlynx Hughes Comm. Hughes Space

and Comm.

20 7,700 MEO5 TBD FCC license applied for,

September 1997; V-band

Teledesic V-Band

Supplement (VBS)

Teledesic LLC TBD 72 + 36 TBD LEO TBD FCC license applied for,

September 1997; V-band

WEST Matra Marconi Matra Marconi 9 8,800 MEO6 TBD Status unknown; Ka-band

(1) Teledesic launched the T-1 experimental satellite in February 1998.

(2) Celestri application includes integration with Motorola’s Millenium GEO broadband system.

(3) TRW intends to operate four GEO satellites in conjunction with the 15 GSN MEO satellites.

(4) Spaceway NGSO to be operated with 16 Hughes Spaceway GEO satellites.

(5) Starlynx application also requests authority to operate four GEO satellites in conjunction with MEO system.

(6) Matra Marconi intends to operate one or two GEO satellites in conjunction with the nine WEST MEO satellites.

Figure 5 Broadband LEO Satellite Systems
1998 LEO COMMERCIAL MARKET PROJECTIONS

PAGE 10 FEDERAL AVIATION ADMINISTRATION

Associate Administrator for Commercial Space Transportation (AST)

Remote Sensing Systems

In addition to telecommunications-oriented

applications, a number of companies are

developing commercial remote sensing systems

for LEO which will use commercial launch

services. Proposed commercial remote sensing

satellite programs are summarized in Figure 6.

Over the past year, two companies—

ORBIMAGE and EarthWatch—have launched

commercial remote sensing spacecraft. In

August 1997, ORBIMAGE launched OrbView-2

which provides one-kilometer resolution ocean

color data under contract to NASA. In

December 1997, EarthWatch launched the first

high-resolution commercial remote sensing

spacecraft, EarlyBird-1, which failed to operate

shortly after launch.

Despite the EarlyBird-1 failure, it appears

that a number of commercial remote sensing

systems will be deployed over the forecast

period. Like the LEO telecommunications

systems, the deployment of additional satellites

beyond the initial deployments will depend on

the development of a viable market for

commercial imagery which does not exist today.

Because commercial remote sensing satellites

are few in number and are not part of large

constellations, they do not represent a significant

demand for commercial launch services.

However, if a viable market for commercial

remote sensing imagery appears, there will be a

low but steady demand for launches of small

launch vehicles for remote sensing satellites.

Commercial launch services may also be used to

launch military remote sensing spacecraft for

countries without launch capabilities.

Foreign Scientific Payloads

In addition to communications and remote

sensing systems, demand for commercial launch

services comes from foreign governments and

research organizations. Typically, foreign

research organizations launch small spacecraft to

conduct scientific research in LEO, including

microgravity, life sciences, and communications

experiments using commercially available small

launch vehicles. Demand for such launches is

expected to steadily increase over the forecast

period and has been incorporated into the

projections in this report. Projections of demand

for launches of U.S. government-sponsored

scientific payloads are not included in this report.

System Operator Manufacturer First

Launch

Mass

(lb)

Satellites Highest

Resolution

Status

OrbView ORBIMAGE Orbital Sciences

Corporation

1995 607 4

OrbView-1

OrbView-2

OrbView-3

OrbView-4

10 km

1 km

1 m

1 m

First 2 sats launched under

NASA cooperative program

Launched 1995; weather info

Launched 1997; ocean imagery

Launch 1999; high resolution

Launch 2002; high resolution

IKONOS Space Imaging

EOSAT

Lockheed Martin 1998 1,800 2

IKONOS-1

IKONOS-2

1 m

1 m

Satellite construction underway

Launch summer 1998

Launch late 1998/early 1999

EarlyBird EarthWatch Orbital Sciences

Corporation

(formerly CTA)

1997 686 3

EarlyBird-1 3 m

EarlyBird program canceled in

favor of QuickBird due to failure

of EarlyBird-1 in Dec. 1997

QuickBird EarthWatch Ball Aerospace 1998 2,000 2

QuickBird-1 1 m

Satellite development underway

Launch planned 1999

Resource-21 Resource-21 Boeing 2001 TBD 4 10 m Satellite development underway

Figure 6 Commercial Remote Sensing Satellites
1998 LEO COMMERCIAL MARKET PROJECTIONS

FEDERAL AVIATION ADMINISTRATION PAGE 11

Associate Administrator for Commercial Space Transportation (AST)

PAYLOAD AND LAUNCH PROJECTIONS

Following the assessment of proposed LEO

commercial satellite systems, AST developed the

baseline and robust market scenarios projecting

LEO satellite and launch demand through 2010.

The baseline scenario includes those systems

whose deployment currently appears likely. The

robust market scenario assumes that high

demand for LEO satellite services will allow the

deployment of follow-on and expanded systems.

Launch demand is assessed for two launch

vehicle sizes—small launch vehicles (<5,000 lb,

100 nm, 28.5o) and medium-to-heavy launch

vehicles (>5,000 lb). If launch vehicle selection

had already been made by the system operator, it

was incorporated directly into the assessment. If

vehicle selection was not known, assumptions

were made based on the number of spacecraft,

mass, orbit, and number of satellites per plane.

Launch vehicle selection for deployment of

the initial Big LEOs is well understood, typically

involving vehicles with performance of 6,000-

11,000 lb to high inclination orbits, such as Delta

II and Proton. For deployment of Broadband

LEOs, a mix of medium-to-heavy vehicles with

average performance of 16,000-19,000 lb to high

inclination orbit was assumed. This higher

average performance reflects current plans of

Broadband LEO providers to use heavy vehicles

which are not currently available. Ariane-5

performance to high inclination orbit is around

26,000 lb; for the EELV-Heavy variants, it is

closer to 50,000 lb. Deployment of Little LEOs

is expected to use only small launch vehicles.

Baseline Scenario

The baseline scenario reflects the deployment

of four Big LEO, three Little LEO, and two

Broadband LEO systems. It includes operations

and maintenance, and anticipates deployment of

follow-on systems with similar characteristics at

each constellation’s end of life. In addition, it

includes a low but steady demand for

commercial launches to deploy remote sensing

and foreign scientific payloads.

The baseline scenario projects that 1,202

payloads will be deployed between 1998 and

2010, as shown in Figures 7 and 8. Looking at

the next 10 years, the baseline scenario projects

1,044 payloads will be deployed, compared with

512 over 10 years in last year’s modest growth

scenario. The large increase is due to the

inclusion of two Broadband LEO systems in the

baseline scenario, compared with no Broadband

LEOs in last year’s modest growth scenario.

Launch demand for the baseline scenario is

projected to be 7 to 43 medium-to-heavy launches

per year (average 19) and 6 to 16 small launches

per year (average 12) from 1998-2010. Demand

for medium-to-heavy launch vehicles peaks with

the deployment of Broadband LEO systems in

2002 and 2003 and again with the deployment of

Big LEO follow-on systems in 2005 and 2006.

Launch demand is shown in Figures 7 and 9.

Robust Market Scenario

The robust market scenario reflects

deployment and maintenance of five Big LEO,

four Little LEO, and three Broadband LEO

systems, and anticipates deployment of a mix of

follow-on and expansion systems to meet robust

market demand for LEO services. In addition,

the scenario includes a low but steady demand

for commercial launches to deploy remote

sensing and foreign scientific payloads.

The robust market scenario projects that

1,540 payloads will be deployed over the forecast

period 1998-2010, as seen in Figures 10 and 11.
1998 LEO COMMERCIAL MARKET PROJECTIONS

PAGE 12 FEDERAL AVIATION ADMINISTRATION

Associate Administrator for Commercial Space Transportation (AST)

0

50

100

150

200

250

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Remote Sensing/Science

Broadband LEO

Little LEO

Big LEO

Figure 8 Baseline Scenario Payload Projection

0

10

20

30

40

50

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Medium-to-Heavy (> 5K lbs)

Small (<5 K lbs)

Figure 9 Baseline Scenario Launch Demand Projection

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 TOTAL

Payloads

Big LEO 85 21 17 18 13 9 9 70 78 13 9 9 10 361

Little LEO 18 8 10 32 38 14 4 26 38 34 8 14 16 260

Broadband LEO 0 0 0 64 168 138 17 17 17 17 22 22 22 504

Remote Sensing/Foreign Science 4 3 3 4 6 4 7 7 6 7 8 10 8 77

Total Payloads 107 32 30 118 225 165 37 120 139 71 47 55 56 1,202

Launch Demand

Medium-to-Heavy (>5,000 lb LEO) 10 7 7 15 43 34 13 25 27 15 17 18 17 248

Small (<5,000 lb LEO) 9 6 7 13 16 11 12 11 13 15 13 15 14 155

Total Launches 19 13 14 28 59 45 25 36 40 30 30 33 31 403

Figure 7 Baseline Scenario Payload and Launch Projections
1998 LEO COMMERCIAL MARKET PROJECTIONS

FEDERAL AVIATION ADMINISTRATION PAGE 13

Associate Administrator for Commercial Space Transportation (AST)

0

50

100

150

200

250

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Remote Sensing/Science

Broadband LEO

Little LEO

Big LEO

Figure 11 Robust Market Scenario Payload Projection

0

10

20

30

40

50

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Medium-to-Heavy (> 5K lbs)

Small (<5 K lbs)

Figure 12 Robust Market Scenario Launch Demand Projection

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 TOTAL

Payloads

Big LEO 85 21 17 30 13 39 41 90 89 16 28 24 50 543

Little LEO 18 8 28 32 38 14 4 26 50 40 8 14 16 296

Broadband LEO 0 0 0 64 186 172 33 20 20 20 25 25 59 624

Remote Sensing/Foreign Science 4 3 3 4 6 4 7 7 6 7 8 10 8 77

Total Payloads 107 32 48 130 243 229 85 143 165 83 69 73 133 1,540

Launch Demand

Medium-to-Heavy (>5,000 lb LEO) 10 7 7 18 45 43 22 36 38 15 21 20 28 310

Small (<5,000 lb LEO) 9 6 11 13 16 11 12 15 19 21 17 19 19 188

Total Launches 19 13 18 31 61 54 34 51 57 36 38 39 47 498

Figure 10 Robust Market Scenario Payload and Launch Projections
1998 LEO COMMERCIAL MARKET PROJECTIONS

PAGE 14 FEDERAL AVIATION ADMINISTRATION

Associate Administrator for Commercial Space Transportation (AST)

Looking at only the 10-year period, 1998-2007,

the robust market scenario projects 1,265

payloads will be deployed, compared with 980

satellites projected for a 10-year period in last

year’s high growth scenario. As with the

baseline scenario, the large increase is due

primarily to the inclusion of more Broadband

LEO systems. The robust market scenario

reflects deployment of three broadband systems,

compared with only one in last year’s high

growth scenario.

Based on these payload projections, launch

demand for the robust market scenario is

projected to be 7 to 45 medium-to-heavy launches

per year (average 24) and 6 to 21 small launches

per year (average 14) over the forecast period.

As with the baseline scenario, demand for

medium-to-heavy launch vehicles peaks with the

deployment of Broadband LEO systems in 2002

and 2003 and again with the deployment of Big

LEO follow-on systems in 2005 and 2006.

However, peak demand is slightly higher and a

higher sustained level of demand exists

throughout the latter part of the forecast period.

Launch demand is shown in Figures 10 and 12.

For both scenarios, the projected satellite and

launch demand reflects system configuration and

deployment timing as provided to AST by the

system operators. For systems included in each

scenario, actual system data as known at the time

of writing was used without providing any

subjective filtering of the data. It is highly likely

that actual deployment configuration and timing

for many of these systems will change as their

development progresses.

Historical LEO Market Assessments

Since publication of the first LEO

Commercial Market Projections in 1994, there

has been tremendous growth in the number of

proposed systems, as well as substantial progress

toward deployment of many of these systems. At

the same time, AST’s forecast of systems likely

to be deployed has also increased. Figure 13

summarizes AST’s commercial LEO market

projections for the past five years revealing

significant growth in the number of systems

expected to be deployed in all three LEO

telecommunications market segments.

1994 1995 1996 1997 1998

Systems Projected *

Big LEO 1-2 2-3 3-4 4-5 4-5

Little LEO 1-1 1-2 2-3 2-3 3-4

Broadband LEO 0 0 0 0-1 2-3

* The lower limit reflects the Baseline scenario and the upper reflects

the Robust Market scenario (previously Modest and High Growth).

Figure 13 Past LEO Systems Projections