05-17-95

LEO Commercial Market Projections

I. Introduction

The attached charts contain projections of the Low Earth Orbit (LEO) commercial payload and launch markets for

the period between 1995 and 2005. The information in the charts was developed by the Department of

Transportation's (DOT) Office of Commercial Space Transportation (OCST) on the basis of responses to an April

1995 Federal Register Notice (issued by OCST) requesting data on the LEO commercial market, as well as

publicly available information and OCST research. This latest assessment represents an update to a prior study of

the LEO market that OCST conducted in March 1994 to facilitate a variety of Administration efforts, including

Interagency Working Groups reviewing U.S. space transportation issues. Given the dynamic and somewhat

uncertain nature of this market segment, further efforts will be made, at least annually, to update the projections

and/or account for new activities as the market continues to develop.

The results presented in this study do not indicate DOT support or preference for any particular proposal or

system. Rather, the information provided reflects an OCST assessment of overall trends in the mobile

communications services and LEO commercial satellite markets, with the ultimate purpose of projecting future

space transportation needs to LEO. System characteristics necessarily utilized in making such projections (such

as number of payloads, launch schedule, etc.) are representative of proposals currently under consideration in

industry.

II. Proposed LEO Communications Systems

Table 1 provides a listing of the various publicly announced proposals for LEO communications systems currently

under development within the industry. The systems are listed as "Little," "Big," or "Mega" LEO constellations,

depending on the capabilities provided by the system. Little LEOs would provide mobile data messaging and

position determination services on a global level, while Big LEOs would add mobile voice and fax capabilities;

Mega LEOs would provide wireless video, voice, and broadband, high-speed data services to small satellite

dishes.1

 Such a list is critical to a study of the potential size of the LEO satellite and/or small vehicle launch

market, as LEO constellations will in all likelihood provide the highest level of demand for satellites and launch

services for this market segment. The orbit altitude and inclination for the various systems are provided in Table

2.2

III. Market Scenarios

Many of the systems listed in Table 1 were under consideration by industry at the time of OCST's 1994

assessment. Nonetheless, given the uncertain status of many of the efforts and the apparent impact of various

market and regulatory factors at that time, OCST determined that one to two Big LEO systems and one Little

LEO system might ultimately be deployed in the 1994-2005 time frame (these potential outcomes were described

in terms of two market scenarios).

Since that time, however, significant progress has been made by a number of system proposers in terms of

regulatory approval, technical development, contracting, and financing. Moreover, several new proposals for LEO

 

 

1

For purposes of this assessment, Medium Earth Orbit, or MEO, systems

providing global, mobile communications services have been listed as Big LEOs.

 

2

Although a number of non-U.S. LEO constellations have been discussed

conceptually or proposed by other nations, most are not listed due to their

comparatively early stage of development and/or authorization. 2
constellations have been formally announced within the last year, substantially increasing the number of potential

participants in the market for mobile, satellite-based communications services (particularly in the case of Little Leo

systems). Given these developments, OCST again undertook a review of potential commercial demand in this

market, utilizing certain assumptions and completed studies concerning:

1) the projected customer demand for personal communications services; 

2) the potential effect of various competing technologies (e.g., cellular phones, GEO-based mobile

communications services) on that market; 

3) potential limitations on the availability of capital for such projects; and 

4) the government authorization/licensing process, and the availability of frequency spectrum necessary for the

operation of LEO systems.

 

Particular attention was also paid in the assessment to the status of contracting for the various proposals, in terms

of both satellite development/production and launches.

On the basis of these considerations, OCST determined that at least one Little LEO and two Big LEO systems

would probably be deployed in the 1995-2005 time frame (the more optimistic scenario from the 1994

assessment), and that additional Big and Little LEO systems might also reach operational status. Although some

data obtained by OCST staff indicated that as many as four Big LEO proposals, and several Little LEO proposals,

might eventually take further steps toward market entry, the most likely "high-end" scenario appeared to be that

three Big LEO systems and two of the larger Little LEO constellations would be deployed and would sustain

operations in this time frame.

Accordingly, Tables 3 and 4 present OCST projections of small commercial satellite demand under two different

scenarios, with three market segments identified for each scenario (Big LEO communications systems, Little LEO

communications systems, and the more general category of remote sensing, international scientific, and

microgravity payloads). For clarity, the charts also contain separate projections of on-orbit failure

replacement/Operations & Maintenance (O&M) payloads for both classes of LEO systems.

Consistent with the above discussion, Scenario 1 projects that two Big LEO systems and one Little LEO system

will be deployed, while Scenario 2 (the high-end outcome) projects three deployed Big LEO systems and two

deployed Little LEO systems. As with the 1994 assessment, Mega LEO systems have not been included in either

scenario at this time due to the unusual challenges involved in their design, deployment, and financing, and to the

current lack of contracts for satellite production and launches for such systems. However, OCST will continue to

pay close attention to such proposals as the projections presented in this document are updated in coming months. 

It should also be noted (as stated earlier) that the projections and deployment schemes provided for Big and Little

LEO systems in the two scenarios are representative of the characteristics described in various proposals currently

under consideration by industry, and are not intended to signify OCST support for any individual system or

proposal. 

 

IV. Launch Demand

An assessment of the launch schemes for the various LEO constellations indicates that most Big LEO proposers

currently plan to deploy the bulk of their satellites on medium-to-large commercial launch vehicles (capable of

launching at least 10,000 to 20,000 pounds to LEO). However, Big LEO proposers apparently intend to conduct

at least some portion of their failure replacement launches on small launch vehicles, usually in clusters of two or

three satellites.

3
Little LEO proposers currently intend to conduct both deployment and replacement launches on small launch

vehicles due to the relatively small size of these payloads. Also, organizations planning remote sensing,

international scientific, or microgravity payloads will most likely use single-manifested small launch vehicles.

Based on these assumptions, the resulting Scenario 1 demand for commercial launches to LEO for the period

between 1995 and 2005 should be approximately:

• 5 to 10 medium-to-large launches per year during deployment phases (1996-1998, 2002-2005), depending

on the system and the particular launch scheme; and

• 8 to 12 small vehicle launches per year (but with only four launches occurring in 1995).

The resulting Scenario 2 demand for commercial LEO launches for the same period should be approximately:

• 5 to 10 medium-to-large launches per year during deployment phases, with the number of launches most

likely falling in the high end of this range during the years 1996-1998 and 2002-2003, and in or near the

low end of this range during the years 1999-2000 and 2004-2005; and 

• 9 to 14 small vehicle launches per year (but again with only four launches occurring in 1995).

More specific estimates of LEO launch demand for the two market scenarios are provided in Table 5 with respect

to year (or range of years) and vehicle class.

Based on available information, the competitions for these launches should in most cases be open to bids from all

international commercial launch service providers.

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