The Orbiter: Reinventing the Industry

Getting Younger

REINVENTING THE INDUSTRY

Every Year

The SSPI Hall of Fame Class of 2019

The Best Way to Predict the Future is to Invent It

Making Leaders Interview: SES President & CEO Steve Collar . . . plus more!

The Orbiter Reinventing the Industry

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CONTENTS Reinventing the Industry

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The SSPI Hall of Fame Class of 2019

11 13

Invisible Man, Invisible Woman

Making Leaders Interview: Steve Collar, President & CEO, SES

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The Best Way to Predict the Future is to Invent It

Promoting Women in Space

Interview with Jason Rainbow, Group Editor-in-Chief, Finance Information Group

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The Oracle of Colombo

Upcoming Events SSPI-MA STUDENT COMPETITION

2019 Student Prize Competition, April 13, McLean, VA, USA. Click here for more information.

NETWORKING IN WASHINGTON

SATELLITE 2019, May 6-9, Washington, DC, USA. Click here for more information.

CELEBRATING INDUSTRY LEADERS

The 2019 SSPI Hall of Fame Celebration, May 7, Washington, DC, USA. Click here for more information.

NETWORKING IN WASHINGTON

The 2019 SSPI Chairman’s Reception, May 7, Washington, DC, USA. Click here for more information.

Learn more about upcoming events at www.SSPI.org 2

The Orbiter Reinventing the Industry

Reinventing the Industry

By Robert Bell, Executive Director This business was once one for patient capital seeking a good long-term return.

Patience no longer seems to be much of a virtue. Never before in the history of business in space has so much money been gambled on so many sectors and business models at one time. According to the latest numbers I have seen, the sector has attracted $17.8 billion in new venture investment since 2000 – not including government and export credit financing – and more than $7 billion in 2017-18 alone.

For those of us who are not investors seeking return or entrepreneurs seeking investment, what does it mean? The disruptions are already becoming sharp: from the decline of satellitebased pay TV subscriptions in major markets to price erosion for satellite capacity and the blooming fields of data extracted from earth observation. Established companies in fleet operations, satellite services and technology are evolving fast, because what was in investors’ minds a few years ago is remaking their world.

To the Cloud

To take one example, SES Networks announced in October a partnership with IBM to provide direct satellite-based connectivity to IBM’s cloud services. The idea is to ensure that markets with limited terrestrial connectivity can deploy their applications and solutions on the IBM Cloud. This announcement came from a company that has already staked its future on data communications led by the MEO constellation it acquired with the purchase of O3B. In this issue, we talk with CEO Steve Collar about leading his company at a time of extraordinary change.

SES is hardly alone. Amazon has gone down a similar path in its partnership with Lockheed Martin to build ground stations accessing its industry-leading cloud platform. Globecomm, prior to its acquisition by Speedcast, became a Direct Connect partner of Amazon to bring customers the unique cost and performance

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Reinventing the Industry

advantages of cloud processing. If data is the oil of the digital age, the commercial space industry is ready to start drilling, from “new space” companies working toward commercialization to experienced companies navigating the confusing currents of the market.

An Integrated Future

As Satellite Finance editor Jason Rainbow notes in this issue, there is a massive convergence of the satellite and terrestrial telecom sectors underway. Broadcast distribution is steadily losing ground as the reliable cash cow of satellite, and we are feeling our way to a new, integrated relationship with terrestrial telecom and terrestrial data service, which in turn need the unique capabilities that satellite can deliver, whether from GEO, LEO or MEO. Jason is just one of the smart people we talked to for this issue, as we strive to step away from the noise of daily announcements and find a perspective on the reinvention of our industry. We also take a moment to honor some extraordinary people in our industry who have done the vital work of reinvention on a global scale. You can meet them – the newest inductees to the Space & Satellite Hall of Fame – on May 7 at the Hall of Fame Celebration in Washington. Learn more.

The reinvention of the industry is taking place too fast. It is also taking place too slowly. New business models still have to prove their resilience. Established companies have to prove their ability to adapt. In that situation, patience is still a virtue. I look forward to seeing you at the Hall of Fame Celebration at the Newseum.

Matt Desch

2019 Hall of Fame Inductee

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Henry Goldberg

2019 Hall of Fame Inductee

The Orbiter Reinventing the Industry

Greg Wyler

2019 Hall of Fame Inductee

The Best Way to Predict the Future is to Invent It

By Louis Zacharilla, Director of Development and Innovation “The best way to predict the future is to invent it.” –Alan Kay I was asked to write a blog about “the mind of an investor.”

What always interests me about capitalism is how quickly deployment takes place when an opportunity shows its head. It seems to move at the same speed of the human mind. Investment capital tends to find ways to efficiently flow to new ideas, sectors and ideas which feed a hungry entrepreneur who is taking a “risk.”

But I have never actually met an entrepreneur, and I include myself here, who believes that a “risk” is being taken. In fact, there is something about the entire process of identifying an investment and being the investment in question that is like being the patron of a poet, prophet or painter. These occupations, for the most part, are not known as pathways to financial reward. Poets are not celebrated for picking up checks at expensive restaurants in San Francisco. (In fact, there is a famous anecdote about Picasso, a man famous for NOT paying restaurant bills. One day he got stuck with a big check. He took it, did a quick sketch on the back of the bill and handed it to the waiter. The stunned waiter looked at him and Picasso, on his way out to the street said, “Oh, and keep the change.”

They are creative but each will say that they became what they became “because there was no other choice.” Ditto with entrepreneurs. They MUST do what they do.

Investors have a different mindset. As SSPI’s first Astropreneurship Award recipient, RRE Venture’s Will Porteous, explained to me during our Better Satellite World podcast, the intention of an investor is not to reward risk so much as to “de-risk” a potential market for a lot of entrepreneurship.

RRE Ventures is unique because it seeks Investors are like the patrons, while “category defining ventures.” This is important astropreneurs are the artists. and it informs the actions taken to find the The Orbiter Reinventing the Industry

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The Best Way to Predict the Future is to Invent It

game-changers.

The first step, according to Porteous, is to “deputize” a group internally to research a sector, often for as long as nine months. Like journalists they get a sense of what is happening, begin to discuss the trend and make strategic decisions. If they believe a level of “de-risking” can occur, they eventually make bets on the sector and the entrepreneurs (in our case “astropreneurs”) in that space.

Will Porteous Will and his colleagues started down the path in space and satellite in 2013-14, which led to their first industry investment: Spire. It was followed by others, including Ursa Space. These are companies that will hopefully play a role in continuing the rise of the industry in different parts of the world.

This mindset fits inside the Big Picture of SSPI because it has begun to create more economic action that is tied to space and satellites.

Tying things together is important for people wearing shoes with laces and it is important for our industry as it attempt to take a long, long walk forward.

The first annual Astropreneurship Day last November in NYC

Will Porteous accepting one of the first three Astropreneurship Awards

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The Orbiter Reinventing the Industry

The SSPI Hall of Fame Class of 2019 The Space & Satellite Hall of Fame is home to leaders who created, sustained and expanded the industry over the past 60 years, including Dr. Arthur C. Clarke, Dr. Harold Rosen, Rene Anselmo, Takuya Yoshida, David Thompson, Mary Cotton, Romain Bausch, Pradman Kaul, Sidney Topol, Gwynne Shotwell, John Celli, Giuliano Berretta, Mark Dankberg, James Monroe III, Peter Jackson and Jean-Yves Le Gall. Joining them in 2019 will be Matt Desch, CEO of Iridium; Henry Goldberg, Partner at Goldberg, Godles, Wiener & Wright; and Greg Wyler, Founder and Executive Chairman of OneWeb.

Matt Desch

CEO, Iridium Communications, Inc. Matt Desch became CEO of Iridium Communications in 2006 after a twenty-five year career in the telecommunications industry that included serving as president of Nortel Networks’ wireless business and chief executive of Telcordia Technologies. Since taking the helm, he has led Iridium from the depths of postbankruptcy uncertainty and looming irrelevancy into a major contributor to the space and satellite industry.

Matt has also served as an advocate for safety and responsible traffic management throughout the space, satellite and aviation industries for over a decade.

Three years after Matt joined Iridium, one of its spacecraft was hit by a defunct Russian satellite, Kosmos 2251. He turned a disaster into an opportunity to focus on responsibility and safety in navigation by pioneering a partnership with the US Air Force on orbit/debris coordination and highlighting Iridium’s preparations to de-orbit their original spacecraft safely without posing threats to other orbital systems. Matt’s championing of Iridium’s preparations and the U.S. government recognition that space had become a congested environment, lead to eventual improvements in orbital safety and de-commissioning precautions throughout the industry. In the same year, he also successfully led Iridium through the complicated process of going public, listing the company on the NASDAQ. Throughout his time as CEO of Iridium, Matt has led the company through challenging transition after transition. Raising the necessary public financing, he guided the Iridium team through the replacement of their entire fleet of first-generation LEO spacecraft through a campaign known as Iridium® NEXT. Completion of this $3 billion dollar, 8-year The Orbiter Reinventing the Industry

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The SSPI Hall of Fame Class of 2019

campaign maintained the company’s unique position as the only communications network that covers the entire planet. The replacement campaign also included safely de-orbiting dozens of de-commissioned satellites based on the safety practices he had championed to the global community. The Iridium CertusSM service made possible by the new constellation provides high throughput L-band data through highly mobile, small form factor antennas, needed for unique applications in maritime, aviation, government and satellite-based IoT applications. Matt also established a successful model for commercially hosted payloads, with a crowning achievement being AireonSM, a new company and service that will be providing real-time 24x7 tracking of aircraft anywhere on Earth. As if these accomplishments were not enough, in mid-2018 Iridium, achieved a key strategic objective Matt identified several years ago, that ended a long-held monopoly in the maritime industry, by becoming a recognized provider of Global Maritime Distress and Safety System (GMDSS) services by the International Maritime Organisation. Today, Iridium has become a rare breed of company featuring both significant free cash flow and high growth.

Henry Goldberg

Partner, Goldberg, Godles, Wiener & Wright Henry Goldberg is a leading U.S. regulatory lawyer who has been a key figure in shaping the modern commercial space industry through development of U.S. and international legal and regulatory frameworks.

Over a more-than-fifty-year career that began at Covington & Burling in Washington D.C. in 1966, Henry has opened legal doors to numerous innovations in satellite and broadcasting throughout the world, carving out regulatory territory for new types of companies and their technologies to grow and flourish.

From 1968 to 1970, while at Covington, he participated in the FCC’s first domestic satellite proceeding and established the essential principle that users are eligible to own and operate earth stations that communicate with carrierowned satellite systems. Henry also filed the first application for a user-owned satellite earth station on behalf of the affiliate associations of major TV broadcast networks. He moved to the White House Office of Telecommunications Policy shortly afterward in 1971, where he eventually succeeded Antonin Scalia as OTP’s General Counsel. While at the White House, Henry played a significant role in the implementation of the “open skies” satellite policy that spawned new satellite-delivered television networks, including HBO, C-SPAN and CNN. Henry left the White House in 1975 to return to private practice and eventually founded Goldberg & Spector in 1983, which is now Goldberg, Godles, Wiener & Wright. Since

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The Orbiter Reinventing the Industry

The SSPI Hall of Fame Class of 2019

founding his own firm, he has worked with a number of major satellite and broadcasting companies on landmark regulatory cases. For Hughes Aircraft Company, Henry eliminated common carrier status for satellite service providers by creating a new, more flexible regulatory framework that laid the foundation for satellite “hot birds� carrying the most desirable video programming. He also worked with FCC staff on behalf of Equatorial Communications to create a regulatory environment for the development of the first network of small receive-only earth stations with blanket licensing, which allowed the VSAT industry to take root and flourish. Henry represented PanAmSat in developing a private competitive alternative to Intelsat. The U.S. and later international regulatory initiatives that he developed with colleagues made a new industry of commercial satellite service providers possible. He also played a key role in the enactment of the ORBIT Act of 1999, which normalized Comsat and directed the privatization of Intelsat and Inmarsat.

Henry helped C-SPAN acquire permission for non-profit networks to initiate nationwide service and provided legal and regulatory advice to the Public Broadcasting Service and National Public Radio in converting their networks to satellite distribution. He was the lead attorney for MSV/TerreStar in gaining permission for companies to use satellite frequencies for land-based wireless networks. Henry also secured satellite capacity on a variety of systems around the world for Turner Broadcasting, supporting the start of CNN International. His firm is currently working on carving out a regulatory niche for NGSO satellite constellations, including for Telesat, Iridium and Spaceflight.

Greg Wyler

Founder and Executive Chairman, OneWeb Greg Wyler is a technology entrepreneur, an engineer, and a pioneer who conceived and founded two companies, one that successfully commercialized MEO orbit and another aiming to do the same with LEO orbit. He made his first fortune in the technology boom around Boston and then founded Terracom to bring Internet to Rwanda. After four years of frustration in trying to deploy fiber-to-the-home networks, Greg left Terracom and founded O3B Networks, in partnership with Liberty Global, in 2007 with the goal of unlocking MEO orbit to deliver Internet to remote areas without the need for laying fiber. SES, Google, and HSBC became investors in O3B Networks in 2009, which eventually raised over $1.2bn, to launch its first four satellites, built by Thales Alenia Space, in June 2013 with 12 more launched by 2014.

By 2016, O3B had a firm backlog of $350 million with more than $100 million in currentyear revenue, and SES exercised its option to purchase the company, whose markets had grown to include maritime, mobility, energy and government based on the success of its

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The SSPI Hall of Fame Class of 2019

MEO fleet architecture.

After the success of his first company, Greg moved on to an even more ambitious venture: creating a network of hundreds of LEO satellites to deliver low-latency, high-speed Internet to remote areas. He founded OneWeb in 2012 with investment support from Softbank, Bharti, Hughes, Intelsat, Virgin Group, Qualcomm, Airbus, Grupo Salinas, Maxar, and Coca-Cola with the vision of connecting all the unconnected schools of the world and providing Internet to fuel economic growth, improve education and social development, advance gender equality and make healthcare more accessible across the globe.

To make its vision a reality, OneWeb needed to develop mass-production techniques and a global supply chain capable of assembling 15 satellites per week to launch a 1980-satellite constellation.

OneWeb has raised more than $3.4bn to date and the company’s first launch was a success that has been a major milestone for the industry as a proof-of-concept for the viability of LEO constellations.

Before Greg Wyler launched his companies, the satellite industry operated solely in GEO orbit, delivering far less capacity at higher prices than those available today. The success of O3B led competitors to invest in MEO constellations and improve their own offerings, and OneWeb’s initial victories are having the same impact today.

Companies such as Telesat, LeoSat, SpaceX and Boeing are all conceiving and funding their own large-scale LEO communications constellations while watching OneWeb to see how it proves its business case going forward.

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The Orbiter Reinventing the Industry

The inductees will be honored at the 2019 Hall of Fame Celebration on May 7 at the Newseum, the Washington DC museum dedicated to the importance of the first amendment and a free press.

The Hall of Fame Celebration is a private, members-only event featuring a Grand Reception and the exclusive Chairman’s Reception for C-Level executives of SSPI sponsors.

Invisible Man, Invisible Woman

At the Hall of Fame Celebration on May 7, you will meet a new SSPI. Sure, we got our start in a bar in Denver, Colorado 36 years ago. But there is a new spring in the step of the industry’s biggest and broadest membership network.

Why? Because what used to be the boring old satellite industry has developed new ambitions for transforming life on Earth for the better and reaching far into space. As the professional network of commercial space, SSPI is positioned to help.

We connect a global membership of innovators in companies that: • Have a market capitalization north of $400 billion • Have attracted $17.8 billion in new venture investment since 2000 and more than $7 billion in 2017-18 alone • Employ more than 470,000 people around the world • Offer ambitious visions for the commercial future of Earth and space, which Morgan Stanley expects to create a $1.1 trillion industry by 2038 The Orbiter Reinventing the Industry

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Invisible Man, Invisible Woman

In addition to the established names of the sector, SSPI has attracted innovators including Blue Origin, SpaceX, Planet, Kymeta, Orbital Micro Systems, Bridgesat and Ursa Space. For our corporate and individual members, we continue to drive solutions to a single great challenge: the relative invisibility of our sector, compared with the terrestrial technologies we are in competition with.

The Limits of Visibility

That invisibility places sharp limits on our ability to gain new customers, to receive sensible regulatory treatment and to attract new talent that we badly need. For all the headlines that feature Elon, Jeff or Richard, even the world’s most devoted space geeks know almost nothing about the $400 billion commercial space industry. Just imagine how little future customers, regulators and average university students know – and how that disadvantages us in competition with the best-known technology brands in the world.

Our industry is diverse: from launch to fleet operations, ground services to systems, spacecraft components and manufacturing to space data analytics serving dozens of industries. We buy and sell to each other, and we compete aggressively with each other.

But it is time to lift our eyes above our own sector. It is time to target much greater ambitions. It is time to realize that we can only achieve those ambitions through creative partnership with other, much bigger sectors of the economy. And that will only happen when we stop being the Invisible Man or Woman of the global economy and truly let the world know what we can do.

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The Orbiter Reinventing the Industry

Making Leaders Interview:

Steve Collar, President & CEO, SES

Steve Collar was appointed CEO of SES in April 2018. He had been the CEO of SES Networks since May 2017. Prior to SES Networks, Mr. Collar was CEO of O3b Networks and guided the company through the successful build and launch of its constellation of state-of-the-art satellites. In 2015, O3b Networks became the fastest growing satellite operator in history, and in 2016, O3b was fully acquired by SES and now forms an integral part of SES Networks.

In a conversation with SSPI’s Robert Bell, Steve talks about his early years, the leadership lessons he learned, how he hires and what he has learned about leading a team bringing major innovations to market.

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Promoting Women in Space The SSPI Scholarship Program assists deserving students with meeting the high costs of undergraduate and post-graduate study in disciplines related to space and satellite. This chapter-led program provides scholarships ranging from $1,000 to $3,500 to high school seniors, undergraduate and graduate students from locations around the world.

For 2019, SSPI will be collaborating with the Bay Area Women in Space, and Space in the Bay, with the support of KSAT, to issue a Women in Space Scholarship for women in the California Bay area. Click here to learn more and apply.

To qualify for this new scholarship, applicants must meet all the following criteria: 1. Applicant must be a resident of and/or attending a school in San Francisco, San Mateo, Santa Clara, Alameda, Contra Costa, Solano, Napa, Sonoma, Santa Cruz, or Marin Counties who is currently enrolled in an accredited university or working in the space industry and studying or working in a STEM-related field 2. Applicant must be born before January 1, 2001 and after December 31, 1989 3. Female applicants only 4. Scholarship must be used within 1 calendar year from date of award At a fundraiser this past February, Bay Area Women in Space and Space in the Bay raised funds for the scholarship with a silent auction, featuring many items including two tickets to the 2019 SSPI Future Leaders Dinner!

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Interview with Jason Rainbow, Group Editor-in-Chief, Finance Information Group 1. You have reported on a huge number of deals in the past 12 months. What are the common themes you are seeing, from spacecraft to ground segment to data?

At the heart of all the major trends in satellite is this steady march towards more data, more of the time, in more places. It’s being fueled by not only space becoming more accessible to satellite businesses, but investors are becoming more accessible to these companies.

We’ve now seen the newspace market mature to a point where, in 2018, not only did investors pump US$3.25bn into space technology — up nearly 29% on the year according to Seraphim Capital’s data – but more of these newspace funding rounds raised over US$75m than ever before.

And these larger funding rounds are coming from a wider variety of newspace ventures across the value chain, which points to a rapidly evolving market.

Alongside this, we’re also seeing increasingly sophisticated dealmaking in newspace.

One example is the vertical integration trend we’re seeing from Earth observation operators buying up firms that provide analytics. Whether getting closer to end users is worth the risk of spreading yourself too thin as you look to realise a market remains to be seen. These companies are very young, some believe it to be wiser to pick your battles at that stage, rather than be all things to all people. A lot of investors feel this kind of integration will happen eventually, but when it makes sense to diversify is a key question.

2. What are opportunities in the market are most intriguing to you right now? Why? As well as editor of SatelliteFinance I’m also editor for its sister publication Connectivity Business, and it’s been fascinating seeing those two universes merge over the years.

In SatelliteFinance, a lot of satellite companies are moving towards connectivity and away from the pay-TV services that have traditionally supported their businesses.

Companies we cover in Connectivity Business meanwhile have traditionally focused on terrestrial communications, but satellite companies are increasingly becoming part of their conversations amid this drive towards data and always-on connectivity. Satellite connectivity has for so long been thought of as a niche product, but it is becoming

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Interview with Jason Rainbow, Group Editor-in-Chief, Finance Information Group mainstream, and figuring out its place in a next generation connectivity ecosystem is massively intriguing for me.

Take SES. They started in TV some 30 years ago, and then reinvented themselves 10 years ago to target the data market through ‘fibre from the sky’ player O3b Networks.

Now SES is looking to retool once again as it transforms itself towards where edge computing could be heading.

I think their partnership with IBM last October is interesting for many reasons.

One, it could be an indication of how satellite will be woven into the fabric of the next generation connectivity ecosystem as 5G comes into focus, but also we’re increasingly seeing companies from outside the space sphere — such as IBM, Amazon and so on — increasingly look at how satellite can support their Big Data ambitions.

I know a lot of criticism newspace attracts at the moment is centered around how incestuous it is in terms of how all the dealmaking is taking place within the market.

They’re just buying and selling to each other. I can see that changing in the near term as these technology heavyweights — and let’s not forget internet giant such as Facebook and Google — increasingly move into the sector.

Japan’s Softbank of course has been headlining this trend recently, truly putting money where its mouth is with billions of dollars of investments in companies such as OneWeb. ST Engineering acquiring Newtec is another great example of how satcoms and 5G are converging. China is already talking about how 6G will be a 5G-plus-satellite solution. The industry has long been thinking about how to maintain its relevancy as pay TV revenues fall and subscribers switch to OTT. Yet the opportunity for more than relevance is right in front of them.

3. This year and next are big years for the proving of business plans in communication, earth observation and in-orbit services? What milestones are you looking forward to as tipping points for further investment?

It’s time for the launch side of newspace to step up and rise to the challenge. There are a lot of key milestones around their development that will serve as obvious signals for investors. Debut launches from Virgin, Vector and Firefly are among the high profile ones. But it is also time for Rocket Lab to prove launch cadence. When SpaceX was starting out, it faced similar skepticism about whether it could achieve cadence and actually run an ongoing business. It ended up proving itself, forcing the established players to increase the efficiency of their businesses to compete effectively in the new landscape. Launch is the big facilitator for this industry. It is the main bottleneck to these business truly taking off.

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The Orbiter Reinventing the Industry

Interview with Jason Rainbow, Group Editor-in-Chief, Finance Information Group If there is a high-profile failure, investors will be keen to see how the rest of newspace is hit. The market is very intertwined. It won’t be lost on the industry that there are murmurs of a global economic downturn towards the end of this year that could dry up the VC funding they could end up desperately relying on. That said, I know there are a few distressed asset investors out there who would also be keen to step in if there is such a failure.

OneWeb is the flagship newspace company, and has launch agreements with Virgin.

It is interesting that they did another equity round recently, rather than go for the debt financing they had been seeking for so long. In the end, it was a good opportunity for SoftBank to prove how committed it is to that vision. OneWeb has the potential to massively disrupt the state of play, although they still have lots of questions to answer.

Of course, the big event for the established players is what’s going to happen with C-Band. A ruling on that has the potential to make or break the valuation of satellite companies.

Jason Rainbow is Group Editor-in-Chief of Finance Information Group, which provides perspective and information on M&A, financing, and corporate strategy through educational conferences, transaction databases, books, industry research, and unique financial publications including Transaction Advisors, SatelliteFinance, and Connectivity Business (formerly TelecomFinance).

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The Oracle of Colombo

SSPI UK was privileged this Tuesday to host Peter Marshall, one of SSPI UK’s past Directors and a member of the Space & Satellite Hall of Fame, who has collaborated with fellow Hall of Famer Dr. Joseph Pelton to issue the second edition of The Oracle of Colombo that provides a thoughtful, delightful and often wry romp through Arthur C. Clarke’s extraordinary range of predictions from communications, navigation and weather satellites to Artificial Intelligence and ‘driverless’ cars.

Peter held a book signing and discussed both the book and the early days of satellites and SSPI at an event at Milbank’s London Office.

Copyright 2019 by the Space & Satellite Professionals International

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