Interest in building and launching commercial-satellite constellations continues to be high because of recent technological advances and cost reductions, combined with better access to capital. While some industry analysts feared that private investment in the space sector would plummet from the record highs achieved in 2021, the decrease in 2022 was less severe than expected and capital inflows were the second-highest on record. Excitement about commercial-satellite constellations spans multiple sectors, with companies exploring wide-ranging use cases, ranging from national security to climate monitoring to improve life on Earth.
In 2021, we conducted an analysis to determine if constellation operators were able to translate their ambitious plans for satellite count and launch into reality. The results showed that operators had not yet placed an asset in orbit in more than half of the announced constellations. We conducted an updated analysis in early 2023 to determine whether interest in satellite constellations remains strong and whether operators are now more successful in achieving their goals. Three findings stand out (exhibit):
- Interest in the sector continues to grow. The number of announced satellite constellations is now well over 300, up from about 250 in mid-2019.
- Reality continues to lag behind expectations. For announced constellations, about 45 percent have not yet had a single satellite launch and about 10 percent have stagnant growth, defined as no launches for more than a year.
- Positive momentum is growing. Although many operators have experienced little growth, nearly 30 percent of constellations did launch satellites over the past year, compared with only about 15 percent in mid-2021.
The continued enthusiasm for commercial-satellite constellations is encouraging, but it often results in plans that exceed what operators can reasonably accomplish, given development timelines, customer demand, and available capital. Some companies are emerging as leaders, however, despite the fact that capital is not as readily available as it was a couple of years ago. These businesses create well-articulated, data-backed plans that describe how they can increase customer demand for the satellite offerings, and their solid preparation may help them obtain the capital required to achieve their constellation goals. After a funding round, their continued progress in launching satellites encourages further investment, since it provides proof of their commitment and capabilities.
For the remainder of 2023, we anticipate that current constellations, including megaconstellations in nongeosynchronous orbit that enable communications, will continue to make progress and that some new ones will emerge. Simultaneously, the number of constellations that are canceled, either through a formal announcement or simply by not making progress, will also increase. Industry entrepreneurs who follow these developments may gain insight into the factors that set successful constellations apart from the rest.
Despite a steady, sizeable uptick in announced commercial constellations over the past few years, many constellation operators have yet to meet original ambitions.
Interest in commercial space ventures has grown explosively in recent years, with investment increasing more than tenfold over the past decade compared with the prior one.1 Although space tourism and launches tend to generate the most prominent headlines, an equally interesting trend relates to the planned growth of commercial satellite constellations from operators around the globe.2
Commercial satellite operators worldwide are planning to launch nearly 250 new constellations, and most of these—about 150—have been announced in the past two years. Analysis shows that many operators begin with ambitious objectives for launch timelines and constellation count, only to find that available funding and market demand interfere with their long-term ambitions. That has been true despite the influx of capital the commercial space sector has seen in recent years.
More than half of announced constellations have yet to place an asset in orbit (Exhibit 1). Under 5 percent have achieved their goals for satellite count, and only 12 percent have added to their existing constellations in the past year.
When constellations stagnate, they typically do so after having achieved less than 20 percent, and in many cases, less than 10 percent, of their proposed size by satellite count (Exhibit 2).
In addition to falling short of their desired constellation magnitude, many commercial satellite operators are unable to meet their original timelines. Of those constellations that have yet to launch a single satellite, 24 percent were announced in 2019 or earlier.
To be sure, some past constellations have achieved success, and ambitious projects are still under way, including several mega non-geosynchronous orbit communications constellations. But the sector’s history of less successful forays is also important to consider.