Date: Mon, 16 Nov 92 05:10:14 From: Space Digest maintainer Reply-To: Space-request@isu.isunet.edu Subject: Space Digest V15 #426 To: Space Digest Readers Precedence: bulk Space Digest Mon, 16 Nov 92 Volume 15 : Issue 426 Today's Topics: Commercial Space News #18 [Part 1] Welcome to the Space Digest!! Please send your messages to "space@isu.isunet.edu", and (un)subscription requests of the form "Subscribe Space " to one of these addresses: listserv@uga (BITNET), rice::boyle (SPAN/NSInet), utadnx::utspan::rice::boyle (THENET), or space-REQUEST@isu.isunet.edu (Internet). ---------------------------------------------------------------------- Date: 14 Nov 92 11:52:37 From: Wales.Larrison@ofa123.fidonet.org Subject: Commercial Space News #18 [Part 1] Newsgroups: sci.space COMMERCIAL SPACE NEWS 18 This is number eighteen in an irregular series on developments in commercial space activities. The commentaries included are my thoughts on these developments. This column seems to be largely influenced by changes occurring as ex-Soviet space systems are put into the market. I've tried to include a few of the current developments I've been seeing, with a little bit of commentary on each -- but I'm afraid I've only scratched the surface of some of the changes looming in the commercial space area. There's been a lot happening recently, so I'm afraid this column came out a little longer than usual. I hope the net will indulge me on this.... Contents - 1- INTERSPUTNIK MOVES TO MEET MARKET FORCES 2- RUSSIAN COMMERCIAL SPACE SPECTACULAR HEADING FOR SEATTLE 3- BOOZ-ALLEN JOINS COMMERCIAL SPACE DOCKING PROJECT 4- RUSSIAN MILITARY SPACE OBSERVATION DATA ON THE MARKET 5- GEORGIA CONSIDERING COMMERCIAL LAUNCH SITE 6- SMALL LAUNCHERS, SMALL SATELLITES 7- RUMORS AGAIN THAT GD'S COMMERCIAL LAUNCH BUSINESS IS FOR SALE 8- PRATT & WHITNEY TO SELL RUSSIAN SPACE ENGINES IN U.S. 9- ARIANESPACE SQUAWKS ON PROTON PRICES 10- INDIA PLANS TO ENTER COMMERCIAL SPACE FIELD FINAL NOTES - Commentary ARTICLES ---------------------------------------------------------------- 1- INTERSPUTNIK MOVES TO MEET MARKET FORCES Intersputnik is one of the remnants of the ex-Soviet Empire. Originally set up as a competitor to Intelsat, Intersputnik still 16 member states, and was set up to provide international telecommunications throughout the Soviet Bloc. As the Soviet Empire disintegrated, Intersputnik has survived as an operational organization, changing to provide international telecommunications between the new democracies of Eastern Europe and the new nations of the ex-Soviet Union. But, times are a-changing at Intersputnik. Intersputnik capabilities to provide satellite communications services will get a big boost in 1993 or 1994 when its old ex-Soviet GEO communications satellites are supplemented with a new generation of Russian "Express" geostationary communications satellites. These satellites are being sponsored through a Russian consortium called "Inform Kosmos", which includes the spacecraft manufacturer NPO-PM, Russian launcher organizations, and a newly-formed RUssian bank. Most of the financing of Inform Kosmos seems to be "in-kind" barter, with much of the financing upon commitments to take satellite capacity. (As an aside, NPO-PM is based in Karsnoyarska-26, one of the previously "secret" military towns of the Soviet Union, and reportedly cannot be reached by telephone from the West.) As the Express satellites gradually replace the Gorizont satellites in GEO, Intersputnik has commitments to "lease" capacity on them -- in particular the Express satellites at 14 deg W and 80 deg E will be heavily used by Intersputnik. Each of the Express satellites will provide 10 C-Band and 2 Ku-band transponders, of which Intersputnik will take 8 C-Band and both Ku-band. Intersputnik, and its existing market base, is the key driver for these new systems. Since last year Intersputnik has been a hard currency operation, with users of Intersputnik capacity payment by participants paying by percentage of capability used. (This is also how Intelsat and Eutelsat operate). This infusion of hard currency from Intersputnik to Inform Kosmos, payable as the satellite capability is used, is the key to making the Express satellite system a reality. However, some new CIS states are wanting to change this to allow payment in local currency, since they are very short of hard currency. Interestingly enough, Germany is now seen as the major player in Intersputnik. As East Germany was reunited with West Germany, the West German Deutsche Bundespost Telekom (DBT) became the German representative in Intersputnik. Now of all the members of Intersputnik, Germany is the only one with plentiful supplies of hard currency, and it is apparently taking a major role in Intersputnik -- particularly through their control of hard currency finances in the organization. This heavy participation in Intersputnik by the DBT has caused some waves in Western Europe among Eutelsat and Intelsat. While Intersputnik's annual revenues are only about 2% that of Intelsat's (according to Deutsche Bundespost Telekom), their rates are also reported to be substantially lower than that of Eutelsat or Intelsat in providing broadcast and telecommunications services. Eutelsat's primary market is in broadcasting for Western Europe, which accounts for two thirds of its revenues. If Intersputnik were to provide competing services, their market could very rapidly erode. Similarly, Intelsat's services could be challenged in Central and Eastern Europe by Intersputnik services. At the moment Intersputnik seems to be focusing upon the niche market of serving Eastern Europe, the CIS, and Russia. But the DBT is also considering using the new generation of Express satellites to satisfy the need for a follow-on domestic German communications system to replace the DFS-Kopernicus satellite system. Also in the works is the "Romantis" system, which is backed by 4 major German firms (Daimler-Benz, DASA, Bosch-ANT, and DBT) and Russian groups. Romantis would provide satellite services using Intersputnik, Intelsat or Eutelsat channels, and could provide another channel for Intersputnik to enter the European market for satellite services. [Commentary: Intersputnik is potentially an interesting player in the European telecommunications market. They have a substantial installed base, have good ties to state-of-the-art space systems through Inform Kosmos, and have a good market position in a niche market. That market, providing telecommunications services to the ex-Soviet Block, is expected to grow substantially as the new national economies shape up and begin substantial economic growth. If their ties with the DBT are used, they might also have a key opening through the German domestic market into the core European telecommunications market - either directly through the DBT, or through an integrated approach with the "Romantis" system. In either case, Intersputnik can be expected to continue to be a major player in the Eastern European/CIS telecommunications market and a potential competitor to Intelsat and Eutelsat in Europe.] 2-RUSSIAN COMMERCIAL SPACE SPECTACULAR HEADING FOR SEATTLE If all goes as planned, on 16 Nov, a Russian Soyuz rocket will launch the "Space Flight Europe-America 500" mission. Five days later, a reentry capsule will be targeted to splash down in international waters 200 miles west of Seattle, Washington. It will be retrieved by a Russian missile-tracking ship and towed back for exhibition in the Port of Seattle. It should arrive in Seattle on 26 Nov. Space in the reentry capsule is being sold to carry samples of Russian, European and American products. This goodwill mission is being organized partially to celebrate the 500th anniversary of Columbus's voyage to the Americas, and partially to demonstrate the commercial potential for Russian rocketry. The flight has been endorsed by Russian President Boris Yeltsin and the city of Seattle. The project was started by an ex-Soviet space firm, Photon, and an independent Russian group called the 'Foundation for Social Innovation'. In a published statement, foundation chief Gennady Alferenko said the flight "will link the ex-U.S.S.R. and the U.S.A. in a celebration of a new era in global political and economic relations. " The statement also claims the flight is planned to promote the conversion of military technology to civilian uses and Russia's budding entrepreneurial class. The foundation said it plans to set up a Russian-American Trade Co. to boost trade. Organizers of "Europe-America 500" said the project was being financed by private Russian entrepreneurs. The released press statement said the cost was equivalent to $250 million, although the exact amount in rubles was not stated. Furthermore, the organizers said they were being assisted by the former Soviet space and defense ministries, both of which are desperate for foreign investment in their nearly bankrupt state-owned factories. In a decree signed in August, Yeltsin authorized the Russian space agency to conduct the flight, the Foreign Ministry to make ``political arrangements'' and the Information Ministry to handle official publicity, organizers said. The Russian government and the Russian "League of Defense Industries" are bearing some of the cost by allowing use of the once-secret Plesetsk cosmodrome, a Soyuz launch rocket and capsule, space tracking facilities and the tracking ship. Payload in the Photon reentry capsule includes "gifts, publicity items and cultural, spiritual and environmental messages from prominent personalities, including President Yeltsin and the Dalai Lama, according to "Europe-America 500". Among the items will be "Digswell the Space Dog," a stuffed toy representing a character from the British cartoon "The Shoe People". The welcome in Seattle to the Russian tracking ship with the Photon capsule on board is being coordinated by Bob Walsh, former promoter of the Goodwill Games. He said in a statement in Seattle the capsule's arrival would be turned into "the world's biggest Thanksgiving celebration." After the celebration, the Photon capsule will be given to the Boeing Museum of Flight to be put on display. [Commentary: This is an interesting event. I originally wasn't going to include this as I couldn't figure out if it was really a 'commercial' space event or not, but it's strange enough it deserves mention. As a promotional event for Russian commercial space products, it's an interesting idea. But I don't think it's going to generate a large amount of positive press. To justify the "equivalent to $250 M" cost, this event really should be promoted across the board in the US and Europe -- TV coverage, corporate sponsorship, big names waiting breathlessly for the capsule to splash down on live TV, etc. However, I really haven't noticed a big PR campaign to support it or a even lot of attention being paid to it in the industry. Maybe this is going on and I'm just not clued into the right PR channels, or maybe there's a big PR campaign being planned for mid-November. But at the moment, I'm not seeing the requisite accompanying PR to make such a "commercial" venture a success.] 3- BOOZ-ALLEN JOINS COMMERCIAL SPACE DOCKING PROJECT In mid-October, Booz-Allen & Hamilton and the Space Automation & Robotics Center (SpARC) center announced they will move forward with the commercial development and demonstration of an autonomous satellite rendezvous and docking system. The NASA-sponsored Centers for the Commercial Development of Space (CCDSs) have been investing to try to commercialize the development of space infrastructure and technologies. SpARC is a CCDS originally funded by NASA and industrial partners to develop robotic and automated space systems. About $ 5M has been invested into the project to date, with half coming from NASA and half from Booz-Allen. This funding has developed a design based upon off-the shelf technologies that will be demonstrated on the first and second COMET (Commercial Orbital Materials Experiment Transporter) missions, also sponsored by the NASA CCDS system. The system consists of a passive grapple platform which will be launched on the first COMET vehicle, planned for 1993. When the return payload is separated, the orbital bus will remain on orbit as the target for the second COMET flight. The second COMET mission, planned for 1994 or 1995, will carry a mobile servicing demonstration unit and the more complex active docking system. It incorporates a GPS receiver for navigation, a video-base sensor for proximity operations, a compliant single-point docking mechanism, and a payload exchange mechanism to demonstrate on-orbit servicing. When the two sections dock, the mechanism will demonstrate fluid and payload transfer, with the active mechanism pumping a fluid- simulating gas into the passive mechanism and retrieving a mock payload package from it with a robotic device. While the projected costs for the docking and rendezvous units have not yet been revealed, David Conrad, the SpARC center director said the devices, which can be scaled to different spacecraft sizes, will cost "well under a million" dollars each. Ed Cornet, Booz- Allen's Space System Division Vice President added "This could be a real moneymaker." Apparently, the low projected prices are based upon extensive use of off-the-shelf-hardware. Moog Space Systems of Buffalo, New York has adapted leak-proof connectors for the system by adapting connectors being built for Space Station Freedom. Oceaneering Space Systems of Houston, Texas developed the robotic arm to exchange payloads based upon systems used in underwater oil platform servicing. Ashtech of Palo Alto, California supplied the GPS receiver, based upon existing product line. And Rockwell Space Systems Division is working on a laser-based 3-D ranging system for final docking, originally designed for the Shuttle. The overall system design is patented by SpARC. If this venture is successful, a portion of the profits will be retained by SpARC and plowed back into R&D. This would allow the center to become self-supported outside of NASA funding. SpARC director Conrad said the center's mission is to identify and address technical choke points in space infrastructure. Should the docking system allow independent funding of the center, "we can do that more effectively and without NASA's help, which is what they [NASA] intended all along" for the CCDS program. [Commentary: This looks like a good venture for the CCDS system. Recent criticisms of the NASA-sponsored CCDS system have focused on the expected continuing support of the CCDS system by NASA. Some centers have not been very active in searching out industrial partners nor actively pursuing commercially-viable products. Other centers have been instrumental in some very interesting and innovative commercial ventures, including the COMET program, the Consort series of microgravity experiment launches, some innovative remote sensing techniques, biological processing systems for space, and some materials experiment technologies. This project has the promise of being a very successful venture in some satellite markets. The passive interface needed to enable this docking and rendezvous system only weighs about 30 lbs. While this weight penalty has been criticized by GEO communications satellite operators where every pound of the satellite must contribute directly to added revenue, other LEO satellite designers and operators have been very interested. Interestingly, Booz-Allen seems to be taking a different approach to incorporating the docking/rendezvous system into the satellite. Booz-Allen is primarily an international consulting agency. Rather than pursuing a path to convince satellite manufacturers to include their device as added dead weight, BA seems to be approaching the financial and insurance markets. Adding the passive half of the mechanism to a satellite before launch would greatly aid in rescue in case of a malfunction. Similarly, a LEO constellation equipped with these interfaces could be refueled and have their payloads exchanged or upgraded by a few active servicing buses. Booz-Allen and the SpARC are trying apparently trying to promote a reduction in the insurance rate or perceived financial risks of satellites equipped with their passive mechanism. If successful, this approach could allow a market of several hundred potential mechanisms -- between Iridium and other LEO communications constellations, other LEO satellites, and potential government systems as Brilliant Eyes or Brilliant Pebbles. I would not expect the market for such autonomous servicing systems to take off until the late 1990s. Most of the potential constellation customers aren't planning launches until post-1995. Given a successful demonstration in 1995, initial launches of compatible docking mechanisms might start taking place within a year or two.] 4- RUSSIAN MILITARY SPACE OBSERVATION DATA ON THE MARKET [Ran across a couple of interesting notes, with interesting ramifications.] Central Trading Systems in Arlington, Texas has a new product. Digitized, very high resolution Russian "Earth Observations" data. This data showed up about a month ago when some demonstration data was circulated within the industry to see if there was some interest in buying it. Folks who've analyzed the data say it's in the 1.5-2 meter resolution range. At that resolution, you can pick out the Christmas tree in front of the White House, or pick out individual cars in the Pentagon parking lot on the demo tapes data. Some rumors circulating in the industry claim the data could have even a higher resolution quality, but the data has been poorly digitized from photos. This data is obvious from a former "strategic asset" of the Soviet Union. Central Trading systems, can't identify what satellite generated the photo data, but that the Russians call it a "DD5" system, for Digital Data 5. As a representative of the data seller Central Trading Systems is offering global coverage with an extensive data archive of digital images. If the scenes are in the archive, customers can have the images on data tapes within 2 weeks, delivered by Federal Express. If new scenes are required, they can be delivered with 45 days, weather permitting. Central Trading Systems thinks the data is delivered digitally in Russian, transferred to photos, and then re-digitized. His offers the possibility that resolution can improve as more advanced digitizing and image processing systems are applied. Cost for the data is $3180 (including shipping and handling) for a 13 x 13 Km, 8-bit scene, of 40 mps at 1600 bpi. Demand is reportedly high. As a side note, on 2 October, a top Russian space commander stated the Russian military space program will only survive by sharing its expertise and hardware. Col General Vladimir Ivanov was quoted in a Krasnaya Zvezda interview as recommending Russian military space systems be used for commercial and civilian purposes. In particular, he was reported to have stated "Reconnaissance satellites can be successfully used for long-distance probing of the Earth's surface and for ecological monitoring without impairing their main task." [Commentary: New competition in the Earth Resources market area. There are reportedly warehouses of high-resolution Earth observation data on both sides of the ex-Iron curtain. Different organizations have been selling ex-Soviet observation data in the 10-meter resolution class, but the data availability and market response has been poor, partially because the data was only available sporadically or only in photographic form. (For obvious reasons, the preference if for data in digital format.) But if true, a marketable archive of global 2 meter or better data could be a market gold mine. And the Krasnaya Zveda quote could indicate regular availability to high-resolution data from Russian military systems could become official policy and routine. SPOT and Landsat data is about an order of magnitude more coarse, with some gaps in the digital data coverage available. The Russian data prices are also very competitive. I expect if the initial expectations are proven for this Russian data, then it will capture a large share of the market within a few years. Again, there can be a substantial commercial market pact from an ex-Soviet system. Due to policy considerations, the US government has been reticent to release high-resolution Earth Observation data, and has encouraged the use of 100-meter resolution Landsat Data for commercial or non-critical government needs. It was only last month the US Department of Defense even officially revealed the existence of the office which controlled such space assets. Similarly, SPOT, which has a very large ownership share by the French government, has not striven to achieve the maximum resolution in its system. A higher resolution has been expected in the French military HELIOS observation system under development. Perhaps the sale of high-resolution Russian data will encourage the release of high resolution data by Western governments. But this will also decimate the existing SPOT or Landsat/EOSAT data markets, when they still have not reached a critical mass for full commercial viability. The best result would be the encouragement of the construction of commercial Western systems with equivalent capability, which is well within the capability of the industry. As it stands now, there are still significant unknowns in the future of commercial Earth observations data. This new source of data, if it is proven as reliable and accurate, could substantially change some of the market assumptions for Earth resources data.] 5- GEORGIA CONSIDERING COMMERCIAL LAUNCH SITE On 6 Oct, Georgia Tech Research Institute and Camden County, Georgia kicked off a preliminary study into the feasibility of locating a commercial launch site on Georgia's coast. [For those international readers, this is the US state of Georgia.] The study is primarily looking at the area around the old Kingsland Missile Test Launching site last used in the 1960's and is being financed through GTRI and the local chamber of commerce for $10,000. If this quick preliminary study shows a positive result, a second phase study taking 5 or 6 months will be started. Current estimates to reactivate the Kingsland site and the 4,000 acres of land surrounding it are $3-3.5 M. [Commentary: It seems like everyone is trying to get into the commercial launch site business in the US. So far I've seem commercial launch sites proposed for California, Hawaii, Virginia, Alaska, Texas, Florida, Mississippi, Alabama, and Georgia. I also note that Adm. Dick Truly, the ex-NASA administrator, has accepted a position as head of the GTRI since this study was announced. What's got me puzzled is I really haven't seen an accompanying surge in demand for commercial launches. Delta and Atlas are locked into their complex support systems at KSC and VAFB. Taurus and Orbex and Conestoga are candidates -- but the real demand for them is still small. Now, if we get Orbcomm and Iridium and all of the other smallsat LEO constellations you might have enough business to justify a new commercial site. But I think a new, all-commercial site can't be financially justified by the little "real" traffic on the books. Having been pessimistic in the short term, I believe a purely commercial site makes good financial and business sense in the long term. Current launch sites are primarily designed to operate for government customers, and commercial users take a back seat to government operations. There have been numerous complaints about how foreign customers of US launchers have been treated by security- conscious KSC, and how commercial launch operations are treated as second class citizens at KSC. COMET has even had problems with NASA's Wallops Island launch site operations. One of the problems with establishing a new launch site is the infrastructure needed for a new site. This includes the physical equipment of power, water, road/rail/ barge access, the specialized facilities of payload clean rooms, gantries, fuel storage, telemetry and data, and the non-physical infrastructure of permits, regulations and local operational agreements. This costs money. As space launch vehicles have downsized to meet the smallsat markets, the physical infrastructure requirements for supporting small launch vehicles have also shrunk. But the regulatory environment has greatly expanded, and the required costs for this have greatly increased. The Hawaiian launch site for example, has been trying to get an environmental impact statement written for about a year now, without success. Similarly, the Florida small suborbital launch site at Cape San Blas was held up for over a year getting environmental permits. To start up a commercial launch site will require support from the local areas, the state, and probably a "committed" major customer. Right now, there is really only one commercial launch site in the US -- Poker Flats in Alaska, operated by the University of Alaska, which is specializing in high inclination, small satellite launches. To be commercially viable, new sites must first meet a myriad of regulatory barriers and then be able to capture enough of a commercial launch market to justify the required investment. I have some serious doubts new commercial launch sites will be shown to be sound investments until more of the commercial market materializes. Perhaps this will occur over the next several years as LEO smallsat constellations are financed and approved. But until then, I think pessimism is probably the proper approach to such investments.] 6- SMALL LAUNCHERS, SMALL SATELLITES [Some notes on small sat constellations and small launchers...] Some months ago, Arianespace was reported to be looking at devising an Ariane derivative vehicle specifically designed to serve the smallsat launch market. However, Ariane's market forecast was this market was too small to justify the development of a special derivative vehicle. Meanwhile, several other European organizations are working to develop new smallsat launchers. Italy's Gilarini is reported to developing a "Zefiro", a new solid booster for the Scout vehicle. The Zefiro could be ready for qualification flights in late 1995. INTA in Spain is reportedly looking for international partners to develop the Capricornia launcher, a 3 stage small vehicle capable of putting 100 Kg into LEO. This effort is operating us about $ 30 M of initial funding which is expected to support development efforts through 1995. And back in France, CNES, the French government space agency, is examining two Ariane 5 Light Derivatives (ALD) which could launch 1,000-4,000 Kg into Polar, sunsynchronous orbits. (A 4 stage "ALD- S" could launch 4 tonnes into 800 km sun-synchronous polar, while the 3 stage "ALD-P" could likewise launch 1-tonne payloads.) Also in France, Aerospatiale and DGA, the office of the French national military space efforts, is looking at developing a small all-solid launch vehicle based upon motors from the French M4 submarine launched missile as the "E4L" (350 Kg into 500 km orbit) and the "E4P" (500 Kg into 500 km orbit). As news in smallsat networks, a new Russian-Ukrainian company has proposed to built and launch a network of small LEO satellites. The firm "Ariadne" proposed a constellation of 25 small LEO satellites, with the satellites to be built in Russia and launched by Tsyklon rockets manufactured in the Ukraine. Also in Russia, Lavotchinin association with the Bababin proposing a global LEO smallsat "Courier" comsat system. As reported in the trade press, the system (also called "Convert" for "envelope" in Russian( would consist of up to 60, 2000 Kg satellites in 870 Km orbits), capable of relaying up to 40,000 two-way voice channels, and up to 5,000 digital links for up to 5 million subscribers. The satellites are proposed to be launched on Zenit rockets in groups of 6 [probably an entire constellation plane at once], with replacements to be launched singly using a modified SS- 18 ICBM. As reported, this system could be fully operational by 1998, if funding and approvals are obtained. Not to be outdone, CNES, the French National Space Agency, is also studying a global LEO smallsat constellation for mobile position reporting and remote sensing monitoring. The "TAOS" system would be a constellation of five 150 kg satellites in 1200 km circular orbits. The satellite platform is reportedly being designed by Aerospatiale and Alcatel Espace, and the payload by Alcatel Espace and Dassault Electronique. And Belgium is proposing a Belgian-run program to develop minisatellites for science and technology research. Called MERCATOR (Miniaturized EuRopean Carrier for Applications of Telescience in ORbit), they would be designed to accommodate 50-70 Kg payloads for up to a year in LEO (200-300 Km). Verhaert Design and Development of Belgium estimates that approximately $ 65 M (US) would be required for two demonstration satellites as piggyback Ariane payloads. Belgium would put up $42 M of the total, with other European countries providing the other $23 M. This program is expected to be proposed at the mid-November ESA Minister's meeting in Granada, Spain by Belgium's Minister for Science Policy, Jean-Maurice Dehousses. [Commentary: This article was primarily just to tag some of the new international smallsat launcher and LEO constellation efforts I've seen recent mention of. In several past CSN columns, I've noted several others. What this seems to be showing is smallsats have generated quite a bit of international interest. I think you can break this international interest down into two areas: market interest, and lowered barriers. The barriers for getting into the smallsat launcher game have come down to a point where organizations in numerous countries have decided they could, technically, provide a launcher. An incomplete listing of countries (other than the usual suspects in the US, and Russia) interested in smallsat launchers includes Japan, India, South Korea, Australia, South Africa, Israel, France, Spain, Sweden, Italy, Canada, Brazil, Argentina, and the Ukraine. The current state-of-the-art has advanced to the point where small, all-solid vehicles are pretty simple to produce -- including well understood engineering principles and approaches with "cookbook" solutions to the engineering problems encountered and the availability of "off the shelf" avionics and systems component from the commercial market or from national military programs. Concurrently, satellite technology has advanced to the point where small satellites can offer attractive capabilities in small packages and when smallsat launchers begin to look attractive for providing significant benefits. And the market looks very rosy in providing a sufficient number of smallsat launchers such that an investment in a new smallsat launcher looks reasonable. Unfortunately, the market still has not tested these new smallsat launchers -- either in their cost/performance, in their primary market. Much of the predicted future market for smallsats is tied to the success of LEO smallsat constellations providing global telephone and messaging services. This market is not yet established, and the number and size of participants cannot be predicted. Even if the LEO communications/positioning constellation market is a success, the nature of "global" services is such that global competition many drive numerous, smaller, marginal firms out of the marketplace, reducing the market to only several, large competing global service providers. For example, one of the Russian systems being proposed (see above) seems to be a clone of Iridium, but without the ground systems and links to existing telecommunications structure that Iridium is proposing. With about 2 dozen smallsat launcher firms talking about competing for this market, it seems we can expect cutthroat competition, from which many may not survive. There may be other niche markets to which smallsat launch ventures can address themselves, or they may rely primarily upon "national" payloads, but I think we are seeing a potential glut of excess capability in the international smallsat launch market.] 7- RUMORS AGAIN THAT GD'S COMMERCIAL LAUNCH BUSINESS IS FOR SALE General Dynamics, one of the two largest providers of commercial launch services in the US, is rumored to be looking to sell off its "core businesses". After a reorganization and restructuring in 1991, General Dynamic's Chairman William Anders established the GD corporate strategy to sell off "non core businesses". These core businesses in military aircraft, submarines, armored vehicles, and space launch vehicles were to be maintained, while other businesses in areas such as missiles, aircraft parts production, and light aircraft were sold. Beginning in early 1992, 7 divisions of General Dynamics Corporation were placed up for sale. In results posted to the third quarter of 1992, General Dynamics has made one third more money selling off units than from the four core business areas. Through 30 Sep, GD earned $365 M in divestitures, while the core businesses earned $272 M. This has resulted in substantial increases in the GD's stock price, as the value of each share was swollen by the increased cash and profits from these sales. Of the core businesses, only the Space Launch Systems Division is running a net loss. In the second quarter, it posted a $7 M loss (on sales of $122 M), and in the third quarter posted a loss of $11 M (on sales of $163 M). While sales have close to doubled since 1991, the unit is still showing a loss. Now, General Dynamics is rumored to be looking to sell some of its core businesses. In particular, it is rumored Lockheed or Northrup is looking to buy their military aircraft division, in specific, to provide production facilities for the YF-22 "ATF" program. And rumors are flying that GD is also looking to sell off its space launch business, since it is the steady money-loser of the core businesses. [Commentary: Rumors of GD selling off their space launch business have been rife in the industry from the past year. While GD has invested substantial funds into their Atlas launcher, they have yet to see a return on that investment. And while they have been positioning themselves to win a big chunk of the USAF/NASA "NLS" program (including relocating 400+ persons to Huntsville, Alabama to be near the NASA NLS program office), the cancellation of the NLS has made that investment and positioning a moot point. And two recent failures have made users wary of committing to the Atlas launcher for future use until that problem can be completely resolved. In such an environment rumors are inevitable. I have seen no really credible data which indicates GD is looking to unload their Space Launch Business segment. But I have heard numerous rumors. GD is probably the #1 commercial launch firm in the US, based upon sales and market share (I'll haven't run the number recently to verify that) and probably #2 in the world. GD's launch business is potentially very valuable -- IF they can resolve nagging reliability problems with the Atlas, IF they can maintain a strong and aggressive international marketing program to bring in new business, IF they can staunch the flow of losses from their division, and IF the US commits to a new, larger launch vehicle and GD wins a share of that effort. But these are significant questions in the current environment. I have no doubt the idea of selling off the Commercial Launch Business has been considered within GD corporate staff, and I have no doubt other firms have looked at it as a potential acquisition. Stay tuned -- this question hasn't yet been resolved.] 8- PRATT & WHITNEY TO SELL RUSSIAN SPACE ENGINES IN U.S. On 26 October, Pratt & Whitney announced an agreement with the Russian enterprise NPO Energomash for the rights to market a variety of the Russian concern's products -- including the RD-170 engine, the tri-propellant RD-701 engine, and a variety of engine components and materials technologies. Of the products now offered on the US market, the RD-170 is expected to draw the most attention. The RD-170 is a 4 chamber, LOX/kerosene engine that, with over 1.6 M lbs of thrust, is claimed to the be most powerful liquid-fueled engine in the world. Boris Katorgin, general director of NPO Energomash, said the Russian enterprise has "lots" of the engines in current inventory and is ready to make a deal. NPO Energomash and P&W had worked together previously on the Cape York Australian spaceport project, and had some experience in working together. Katorgin stated in a press conference on the agreement that NPO Energomash desired a U.S. partner that knows how to do business with the U.S. government. The primary target for the new ventures was identified at the press conference as providing the boost engine for a powerful liquid strap-on boosters for a future U.S. heavy lift launch vehicle. While this plan was conceded to be possibly derailed by the congressional termination order for the current National Launch System (NLS), both parties are reported to believe the US will eventually develop some sort of heavy lift vehicle, for which they are positioning their engines as low-cost, off-the-shelf systems. Also offered, the tri-propellant RD-701 engine has sparked some interest. The engine is designed to operate with LOX, liquid hydrogen and kerosene -- or LOX and liquid hydrogen. Engine thrust is expected to be 900 Klbs in tri-propellant mode, and 357 Klbs in dual propellant mode, and is designed to shift from one mode to the other without interruption. In particular, application of this system to the advanced small air-launched or Single-Stage-to-Orbit vehicles were discussed. However, Katorgin conceded development funds for this effort are drying up, and NPO Energomash is looking for other sources of funds to complete the engine's development. Pratt & Whitney expressed interest in the Russian technology, and is offering the existing technology to US industry, but did not commit to funding the RD-701 development program itself. [Commentary: This event was of particular interest since P&W was one of the consortium team members that was developing the STME (Space Transportation Main Engine) for the NLS. The STME was being designed to be the mainstay of the US space launch effort for the next decade, and P&W, Rocketdyne, and Aerojet were working together to develop the engine. Now, P&W is offering up a low-cost competitor. It should also be noted, that Rocketdyne has already dusted off the US F-1 engine and upgraded the design to the F-1A, to offer a US-built large booster engine. If there will be a new booster program arising from ashes of NLS, it will be probably be powered by one of these two engines. The RD-701 engine is an interesting development. Apparently the engine was designed to power the "MAKS"small air-launched spaceplane. That program, while continuing on in a very low level in conjunction with some Western organizations, has also been drastically scaled back. This engine, in its current state, is well in advanced of the current US state of the art. While the US has conducted a variety of small tests as part of the STBE (Space Transportation Booster Engine) program from the late 1980's, that program was dramatically curtailed in favor of the STME. It is important to note, however, that the RD-701 is not yet ready for sale. Any firm or venture looking to use this engine will still have to provide some unspecified amount of funds to prove out the concept and ready it for production. As such, it is an interesting technology opportunity, particularly for SSTO options, but it is not yet ready to enter commercial operations.] 9- ARIANESPACE SQUAWKS ON PROTON PRICES Arianespace has taken aim at the Russian offering of Proton rockets for Western satellite launches. In a recent press conference, Chairman Charles Bigot of Arianespace, took aim at the Russian pricing policies. Bigot claimed the Russian bid for launch of up-coming Inmarsat satellite was believed to be "60% less" than Western bids, and warned customers to be prudent about looking at the total price of the launch. "We say be prudent, because finally, if you analyze the cost of the Proton or the cost of the Long March we are sure there are a lot of things to add to the so-called price," he said. "And finally we are not sure that certain important parameters, the quality and so on, are in these two launchers, at the right level." Bigot claimed that the "true price" of the launchers might be much higher than the prices currently quoted. He stated he had seen data that 600,000 workers were involved in launch vehicle operations in Russia, when only 20,000 to 30,000 probably would suffice. Bigot claimed the Russians "... don't know the cost so they make up the price." He further cautioned the international commercial space community that current negotiations over the "rules of the road" for Russian participation in space markets are very critical, and suggested that the offer of future Western/Russian space cooperation be used to force concessions for more realistic market-pricing polices on the Russian government. Bigot also labeled as "criminal" the reported action of Chinese launch controllers who ordered ground support personnel into action to "safe" a Long March booster which had just failed to launch. The personnel had to brave toxic fumes to deactivate the booster, and it was reported that several hundred workers had been treated for exposure to the highly toxic vapors from the failed launch. [Commentary: This article is primarily included to show international attention has been drawn to the impact of sales of Russian (and Chinese) boosters in the world launch market. These sentiments have been echoed by US launch firms. In particular, Ariane is feeling the heat from potential Russian competition, since they hold a 50-60% world market share for commercial launches, and such launches count for 75% or more of their launch business. They predict the Russian government could pick up at least 50% of the competitive world market, and potentially more than 75%. If so, and the other relative market shares remain the same, then Ariane could see their 50% market share drop to 15%. In other terms, since Ariane is launching approximately 10 launches per year, Russian competition could reduce the Ariane launch rate to 3-4 per year. In light of this potential impact, it is not surprising that Arianespace has started a campaign against the "predatory" pricing they perceive from Proton. Interestingly enough, almost concurrently with this campaign by Arianespace, the ESA council of ministers committed ESA to working with the Russians to examine future cooperative space ventures. ESA is also directly supporting Arianespace, by funding the development of the Ariane-5, and member states of ESA have strong financial and organizational ties to Arianespace (I believe CNES, the French national space agency, is a major stockholder in Arianespace.) I have not heard it suggested within Europe the funding recommended for ESA/Russian or European/Russian cooperative ventures be tied to Russian space market reforms or successful completion of "rules of the road" trade negotiations. Until that happens, I do not believe that the Europeans are taking market availability of Russian boosters as a serious issue.] 10- INDIA PLANS TO ENTER COMMERCIAL SPACE FIELD In several recent published report, the Government of India is setting up a commercial firm to promote the export of Indian space systems and components. The office would be be comprised of prominent businessmen and industrialists in addition to various ISRO officials, and targeted to capture at least 1 percent of the global space market. While specific information is sparse, it has been speculated in the trade press that this firm would operate as a government-chartered organization to act as a clearinghouse for space technology developed by the Indian Space Research Organization and other Indian firms supplying it, as well as enabling other countries to consult with ISRO and other Indian experts on application of space technologies to their economies. In late September Rangarajan Kumaramangalam, the Indian Minister of State for Science and Technology, told the BBC that India has been approached by several countries to export space technology, and to launch other nation's satellites on the Indian space launchers now in development. [Commentary: With little fanfare, India has been working to develop space technology and apply it in India. The ISRO (Indian Space Research Organization) has been very successful in adapting space technology for specific applications in communications, remote sensing, and satellite broadcasting with very significant results. These results have been very closely watched by other countries, with several other countries now beginning to emulate the successful Indian example. As part of this effort, India has been actively building up its national expertise and capability in satellite systems, the necessary ground infrastructure, and space launch vehicles. However, this process was recently disrupted when the US placed the ISRO under technology sanction due to a transfer of cryogenic engine technology from Glavkosmos in Russia to the ISRO. The US claimed this technology transfer violated the Missile Technology Control Regime (MTCR) due to the potential application of large cryogenic rocket engines for ICBMs, while ISRO and Glavkosmos claimed the technology would only be used for civilian users. Both India and ------------------------------ End of Space Digest Volume 15 : Issue 426 ------------------------------