Military Space Becomes Increasingly Important As Capabilities Mature

Space assets are becoming ever more important to the the military worldwide, and markets are reflecting this drive

Printed headline: Sky Control

Militaries around the globe recognize that, in the future, the most critical regional battles will be fought in space. The nation that can most effectively leverage military space assets or counter those of another nation, while also managing the budgets for these systems, will ultimately be victorious. It is also safe to say victory will require doing all of these things well. As more and more nations become aware of the advantages offered by military space assets, the desire to counter these advantages will be too overwhelming to ignore. It is for this reason that the military space industry will continue to be a vigorous and lucrative market over the next decade, as more countries seek these systems. No country depends on space systems more than the U.S., which accounts for nearly 90% of global military space spending. However, U.S. defense budget growth no longer seems unlimited, and there are rumblings of major cuts in the post-Fiscal 2010 budget cycles. Nevertheless, the U.S. will continue to place high priority on space systems. In Fiscal 2010, the Pentagon expects to spend more than $11 billion to strengthen space-based capabilities, with $5.1 billion targeted for procurement of selected major space programs. On the research and development side, the major services have budgeted more than $6.1 billion. Military contracts scheduled for the next 10 years, but not yet awarded, total more than $2 billion. In addition, programs underway in the U.S. will provide a comparatively comfortable fiscal pillow for manufacturers such as Boeing, Lockheed Martin and Northrop Grumman. Boeing and Lockheed Martin were in the running to build the U.S. Air Force’s Transformational Satellites (TSAT). These communications satellites were intended to dramatically increase the bandwidth available for military users and would have included laser intersatellite links. However, even after scaling back the program’s technological risks, the Pentagon concluded it was more cost-effective to cancel TSAT and instead procure two additional Advanced EHF (AEHF) satellites from Lockheed Martin. The Pentagon had spent about $1.5 billion on TSAT and planned to award a contract for the space segment in 2009 but despite its cancellation, Boeing and Lockheed Martin will be the largest producers of military space systems in the next decade. Lockheed Martin will be the top military satellite manufacturer over the next 10 years, with anticipated output of 29 spacecraft valued at a total of as much as $11.7 billion. In addition to the AEHF constellation, Lockheed Martin is developing and building the next-generation GPS III navigation satellites, the Navy’s Mobile User Objective System and the space-based infrared high-orbit missile warning system (Sbirs-High). During the same period, Boeing is expected to produce 25 spacecraft for military purposes, including GPS Block IIFs, the Wideband Global Satcom system and as many as four Tactical Data Relay satellites. The value of this production is expected to be more than $5 billion. Spending heavily on new space systems does not always equate to successful deployment. The U.S. military’s space system acquisitions have experienced problems during the past few decades that have driven up costs by billions of dollars, stretched schedules by years and increased performance risks. Several programs have been restructured in the face of delays and cost growth, and some have been canceled. At times, cost growth has approached or exceeded 100% due to technical issues and other problems. Along with the increases, many programs are experiencing significant schedule delays. In some cases the Pentagon has had to reconsider ways to achieve its goals such as pursuing systems with less capability. Despite its well-known troubles with military space system acquisition, the U.S. market will remain in sharp contrast to those in other parts of the world for the next decade, but the gap will close. Europe has been the principal non-U.S. milspace market, and is likely to remain so even as programs in Russia recover and those in China, India and Israel develop. Europe’s military space spending has been characterized by investments in hardware developed and validated by civilian space agencies or the commercial sector—the opposite of the experience in the U.S.—and this is not likely to change. But it is driving two interesting trends. One is the use of private financing initiatives to fund secure communications and advanced imaging capabilities—an area where Europe has emerged as the global leader. The other is increased reliance on dual-use systems. This is enabling Europe to embark on programs such as space situational awareness, satellite data relay and navigation in which the military will be a heavy user. European spending also has been characterized by an inability to embark on cooperative programs. This is slowly changing. The most significant collaborative effort is the six-nation Musis next-generation optical/radar imaging program. Although individual optical and radar satellites will continue to be funded and operated by individual nations—sometimes in cooperation—the system will feature a common ground segment defined through the European Defense Agency. France is teaming with Italy for new secure and dual-use communications satellites, and has agreed in principle to develop its next-generation satcom system in partnership with the U.K. The Lisbon Treaty, which is taking effect this month, is expected to reinforce this trend by allowing the half-dozen or so European Union nations that are seriously engaged in defense to collaborate within a framework apart from the other members, as they do in the euro zone and the Schengen security grouping (comprising several European countries that have abolished border controls between each other). A third area that has characterized European milspace spending is a perennial paucity of resources. While no one expects this to change dramatically, the situation is improving. The biggest spender, France, approved a five-year defense spending plan last year that pledges to double its space spending, to more than €1 billion ($1.5 billion) per year. On the agenda are operational signals intelligence and early warning satellite systems, and a ballistic missile defense capability. Furthermore, milspace was dominated by three countries—France, the U.K. and Italy—but others are entering the picture. Germany and Spain now have or are working on communications and imaging networks and some nations, such as Belgium and Greece, are contributing financial resources. Altogether, these trends are widely expected to double European military space spending, to €2 billion a year, over the next decade.