by Blaine Curcio
The end of April saw the beginning of a new Space Café series, the Space Café Greater Bay Area, hosted by me, Blaine Curcio. Having spent around 10 years in Greater China, and with most of that time spent in Hong Kong and Shenzhen, I have seen firsthand the rapid evolution of China’s space sector, and also the innovation and resources in the Greater Bay Area. Through my work with my own company Orbital Gateway Consulting (OGC), and my ongoing affiliate work with Euroconsult, I have been covering the Chinese space sector specifically for several years, and more recently, have witnessed the rise of a space industry in the Greater Bay Area. That being the case, it is my pleasure to host the Space Café Greater Bay Area, and in particular its first edition, with none other than my friend and longtime industry colleague (and fellow longtime Hong Kong resident), Mr. Gregg Daffner. Here is a recap of our conversation:
First, what is the Greater Bay Area? Greater Bay Area refers to the 9 cities in Guangdong Province surrounding the Pearl River Delta, as well as the SARs of Hong Kong and Macau. Among the 9 cities are several megacities among themselves (Shenzhen and Guangzhou), and the area has a total population of more than 70 million people. Historically one of China’s most dynamic regions, with many manufacturers and private enterprises, the GBA has punched under its weight in the space sector, due in part to its extremely far distance from Beijing, China’s traditional space industry heart. During our Space Café GBA, we will strive to have guests from different parts of the GBA, or discuss topics on different elements of space in the broader GBA.
For our first episode, we welcomed Mr. Gregg Daffner, CEO of GapSat and President of APSCC. Gregg brought to the Space Café perspectives from his broad experience in the satellite, broadcast, and advertising/filmmaking industries, and his perspectives on a changing space sector in Asia-Pacific.
Satcom as a democratizer
Satellites are a powerful thing. Someone with a GEO communications satellite can communicate directly with anywhere on ~1/3 of the earth’s surface. Satellite operators with their own teleports can, in theory, operate their own fully enclosed networks. Today, this does not sound like anything particularly revolutionary, but in the earliest days of satcom, this was a huge deal. When INTELSAT was created as an intergovernmental organization in 1964, there were large telco monopolies in many countries, and international communications were run through an oligopoly of international telco providers. INTELSAT provided what was in some ways an alternative to the established order, but in many ways was itself a monopoly.
It took a couple of decades, but eventually, private enterprise was able to combine with the power of satellite, and a company in the United States called PanAmSat was born. In the years since, we have seen dozens of satellite operators emerge, with many countries having their own satellites. Gregg’s early experiences as an employee at PanAmSat gave him a fascinating perspective on the early days of the commercial satcom industry, and put him on a fascinating career path in the satcom industry. Gregg also provided an interesting quip on the sale of PanAmSat, one of the most noteworthy M&A actions in satcom industry history,
“That story went (PanAmSat) was purchased by Hughes and then ultimately purchased by Intelsat, the very entity that it had been formed to compete with, in the irony of ironies”.
New Technologies and New Opportunities
As the CEO of GapSat, Gregg has spent years in the satellite capacity market, looking at the price of capacity, and often, more importantly, the regulatory considerations surrounding launching a satellite (orbital filing) and providing services (spectrum/landing rights). During our Space Café, Gregg provided insights on the different ways that satellites are becoming better at delivering bandwidth efficiently to end-users, including more satellite capacity, small GEO satellites, flexible payloads, condosats, and other technologies. In Gregg’s own words, the recent technological innovations are “like a miracle, the engineering is fantastic”.
Impact of Covid on the Space Sector
In general, despite a pandemic, there is a lot of optimism for the space sector. We have seen new money come into the industry, are seeing a lot of new companies, and are seeing a lot of technological innovation.
Gregg brought up an interesting article from the New York Times—“Priority After Lockdown: Not the Office”. In short, the article pointed out that a lot of millennials are tired of working like dogs at jobs that do not inspire them. They don’t want to go back to the office and continue to give up the prime years of their lives for a job that they feel lacks meaning. Our discussion led to the conclusion that the space sector should benefit from having jobs that are more intrinsically fulfilling than, say, financial engineering. I think this is a good point, and something that the space sector should keep an eye on and potentially take advantage of—there are a lot of financial engineers out there. Many are happy to continue financially engineering things, but a lot of them think rocket science is much cooler than their jobs. The same cannot really be said in reverse.
Governments and an obsession with LEO
An increasingly important element of the satcom industry are large governmental Universal Service Obligation (USO) programs. These programs have recently become increasingly LEO-focused, in particular in the United States, where RDOF funds have a stipulation for latency that significantly favors LEO.
This has the potential to create a sort of vicious cycle/LEO craze, where the government funds LEO constellations that may not actually make economic sense, creating a sort of LEO arms race with a lot of speculative money. Thus far, this seems pretty much accurate, in particular given the recent announcements from China about the creation of a new national-level SOE to operate its LEO broadband constellation.
As you can see our first edition of the Space Café GBA covered a lot of ground, and we haven’t even mentioned the Mean Joe Green reference that appeared in the discussion. We at Space Café would like to extend our thanks to Gregg for participating in the discussion, and we look forward to our next chance to speak
To listen to the insights of this Space Café, you can watch the full program here:
Blaine Curciohas spent the past 10 years at the intersection of China and the space sector. Blaine has spent most of the past decade in China, including Hong Kong, Shenzhen, and Beijing, working as a consultant and analyst covering the space/satcom sector for companies including Euroconsult and Orbital Gateway Consulting. When not talking about China space, Blaine can be found reading about economics/finance, exploring cities, and taking photos. He contributes also the weekly column Dongfang Hour China Aerospace News Roundup to SpaceWatch.Global.