Nanosats and Smallsats: SpaceX and Starlink

    Nearly all spacecraft launched in 2021 were smallsats and nanosats, 94% of those launched and 43% of the total upmass. Compare that to only 16% of the total upmass from 2012-2021 and you’ll see a massive spike and change in the industry. So why was nearly every spacecraft launched in 2021 a smallsat? In simple terms, because it’s both easy and there is a huge market for their capabilities.

    It used to be that operating spacecraft was the realm of governments only. And governments still play a role, without question. The United States government maintains over 180 smallsats and is by far the biggest government operator, with China a close second at a little over 80 and Russia at nearly 60. The majority of these are military-affiliated payloads. In 2021, government smallsat launches accounted for 64 spacecraft, not an insignificant amount of investment.

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    But a single commercial operator in 2021 launched 1,273 smallsats.

    Let’s talk about SpaceX.

    The Effect Of SpaceX Nanosats

    Of the commercial smallsat operators, five major companies own 86% of the assets. This still sounds like a decent diversity of operators, but from 2012-2021, commercial companies launched 3,588. 54% of those belong to SpaceX as a part of their Starlink communications constellation. That’s a powerful block of communications infrastructure. And SpaceX is not showing any signs of stopping. It has grown to become the number one launch option for both civilian and military spacecraft operators, valued at over $200 billion.

    SpaceX does have one smallsat communications competitor, the United Kingdom’s OneWeb. They offer essentially the same promise of service; broadband-like speeds anywhere you can see the sky. But their constellation is only a fraction of Starlink’s, coming in just below 400 total satellites.

    One additional factor that influenced the smallsat marketplace, at least in the United States, was a change in the Federal Communications Commision (FCC) regulations in 2020. The new rules made the process to apply for, and to approve, small satellites significantly easier. This reduced the barrier to entry for many companies. SpaceX has taken full advantage of this change, and the beginning of the Starlink constellation deployment aligned with the FCC revision.

    Influence In The Communications Market

    SpaceX accounts for the lion’s share of the smallsat traffic. But they aren’t the only player, and when it comes to this market space, influence is a matter of connecting with the customer. The telecom industry has been trying to connect with the globe for decades. Any inroads made towards satellite connection by companies like Inmarsat often proved to be unreliable and prohibitively expensive for the average consumer. Not so with Starlink. SpaceX recently disclosed that they had shipped 100,000 units to customers in 14 countries, an order of magnitude larger than the initial trial run of 10,000.

    And the system is still in beta testing.

    When fully operational, Starlink will be able to provide broadband-speed internet connectivity to over 90% of the populated regions on earth. Between cheap and reliable internet for the average person and providing connectivity to commercial applications, Starlink is poised to bring the world closer together in a way that used to be the stuff of science fiction

    Communications are critical to effective business operations. But it goes beyond that. The ability of people to talk to each other, to spread ideas, is critical to our advancement as a species. With the rapidly falling cost of space launch, entirely new markets are opening in the small communications satellite industry. Now, almost any company with a need can at least field a constellation of nanosats. For the first time in human history, projects like Starlink and Oneweb will allow anyone to reach anyone else. This level of communications revolution hasn’t happened since the advent of the telephone.

    Nearly all satellites launched are smallsats and nanosats. Of those, over 80% are communications platforms. Is our species at the edge of a revolution in innovation? Will Starlink drive the fast and cheap exchange of ideas on a global scale? Starlink will give us the answer.


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