Servicing Iridium's Satellite Constellation: Business Case (Part 1)

Servicing Iridium's Satellite Constellation: Business Case (Part 1)

Sepatuads.com   Desember 15, 2010   Comment  

1970's Marshall Space Tug Concept

I have been working with Jon Goff over at Selenian Boondocks on this analysis for about a year.  A couple months ago he started getting real busy.

I wanted to get our ideas posted while the effort was still fairly fresh in my head.  Thanks Jon!  Maybe when you are not so busy we could work on this some more.


Would Iridium pay for an orbital tug to service its current LEO constellation? But why would Iridium even want servicing when they are launching a new constellation?

Why would Iridium Pay?
Iridium provides satellite communication through a network of sixty-six active LEO satellites (with a few spares). Iridium’s satellites are based on a common bus design, the LM-700. Their fleet is spread across six orbital planes.

For you non-engineers like me, think of orbital planes as the paths these sixty-six satellites take around the earth. These six paths are spread out enough to cover the majority of the earth’s surface with several satellites in each plane. This allows Iridium phone calls to be “handed off” from one satellite to another as the satellites revolve around the earth. Here are Iridium’s financial and customer stats for 2009:

• 370K customers
• $320M in Revenues
• $135M in profits (EBITDA)

Iridium has secured funding to launch a new satellite constellation, Iridium NEXT. They intend to begin launching these satellites on SpaceX launch vehicles starting in 2015. Total cost: $2.9B.

Iridium’s current fleet had a designed operating life of 5-8 years. I will use a seven-year design life for my calculations. With initial launches in 1997, Iridium’s current fleet is aprox. 13 years old; by 2015 their fleet will be 18 years old, 2.5 times their designed life.

Iridium’s replacement constellation, Iridium NEXT, is not scheduled to start launching until 2015, however choosing a contractor to build this constellation was delayed from Spring 2009 to Summer 2010. Although Iridium has not formally announced a launch date slip, I believe such a delay is likely. Such a delay would push the start of constellation replacement from 2015 to 2016 or perhaps even 2017/2018. If NEXT were delayed to 2018, Iridium’s current fleet would be 21 years old (3x design life) at the time of replacement.

Iridium's current fleet is getting old! The two most likely systems to fail on the current constellation will probably be hydrazine for station keeping and/or batteries. Hydrazine is the fuel in many attitude control thrusters keeping the satellite pointed in the right direction and incidentally, this is also the fuel used to avoid space debris. Batteries supplement the solar panels.

And what happens to Iridium’s service if satellites do fail? Since Iridium still has a few reserve satellites already in orbit, Iridium would move these reserve satellites to take the place of the failing ones. Users may experience temporary service disruption during the maneuvers. If more satellites fail than Iridium has in reserves, users would experience more spotty coverage, more dropped calls, etc. due to the more permanent gaps.

At least half of Iridium’s revenue stream comes from commercial calling cards purchased and used by the minute. Unlike most terrestrial cellular phone providers, Iridium does not charge commercial customers a monthly rate for pre-defined number of minutes. This means if Iridium starts have satellites fail from lack of hydrazine, they will begin to have gaps in their coverage area. Such gaps will have an immediate impact on Iridium’s revenue.

Without coverage, customers can’t use minutes on their calling cards. If they can’t use up current minutes, they don’t need purchase new calling cards. All this means lost revenue and reputation for Iridium.

Jon and I disagree on whether battery life extension is possible for the LM-700.

But could a tug service be offered to provide a few kilograms of additional hydrazine to each of Iridium’s current fleet? Could a tug service provide deorbiting services for malfunctioning satellites? Could a tug service provide prox-ops inspection services? For the rest of this post, I will refer to such offerings as “servicing”.

Benefits of Servicing:

• Avoid revenue loss due to loss of service
• Avoid reputation loss due to loss of service
• Preserve customer base so $2.9B invested in Iridium NEXT is not sunk cost
• Provide new life for a fleet of satellites that may be able to continue to serve alongside NEXT (for this to be true, a market must be identified for this added capacity)
• Create a sellable product – the current fleet could be sold to a third party once NEXT is in operation
• Avoid damage to operational satellites in either fleet (current/NEXT) by deorbiting malfunctioning satellites
• Once NEXT is in orbit, actuaries within Iridium may advise the company to deorbit the current fleet (3x design life, remember) before they run out of hydrazine and make a mess of LEO, because servicing can deorbit a satellite for Iridium, servicing allows the current fleet to stay aloft longer – increasing revenue (and keeping actuaries happy)!

Risk of Servicing:

• Act of servicing may cause damage to current fleet reducing revenue, reputation, and putting NEXT at risk
• Cost of servicing may exceed benefits when risk is considered
• Reputation damage from trying servicing and having it be ineffective in some way (even with no damage to current fleet) – space is so visible in the media. Any perceived "failure" by the media could play poorly on Wall Street. Iridium is publicly traded (IRDM).
• Small window of opportunity. If NEXT launches on time (beginning in 2015), servicing may need be performed prior to that (service window grows if NEXT is delayed to 2018).
• Risk of the unknown/unproven: Service would be new. It is hard being the commercial guinea pigs for something – just ask all of you who were forced to use Windows VISTA.

To service such a market commercially, you would need to prove your technical solution could:

• Rendezvous and Dock with the LM-700 satellite bus
• Refill hydrazine tanks that were never meant to be refilled in orbit (bring your scissors)
• Develop a method to deliver 5-20kg of hydrazine to each of sixty-six Iridium satellites. That is 330-1320kg of hydrazine!
• Service sixty-six satellites over 6 planes (remember delta-V to change planes quickly is expensive)
• And many other complexities

Why would Iridium be a great first customer?

• Iridium is desperate (or I forecast will become desperate very soon as satellites start breaking). Would they invest $100M to preserve a $2.9B investment in Iridium NEXT.
• Iridium has money ($135M in profits in 2009)
• Iridium is in LEO (making the tug servicing technical solution less complex – reduced latencies, etc.)
• Iridium has felt the pain of debris impacts
• Iridium has a ground tracking station a tug service could piggy-back off of

Sounds fun! When do we get started?

[UPDATE: Jon just posted Part 2 up on his blog.]

Designing RLVs with the Lowest Life-Cycle Cost

Designing RLVs with the Lowest Life-Cycle Cost

Sepatuads.com   Oktober 20, 2010   Comment  

This was the Space Shuttle we wanted:

The Shuttle parked in the hanger.  Integration for the next mission was supposed to be comparable to Southwest Airlines loading my luggage (maybe I exaggerate a little).  This is the Space Shuttle we got:

The Shuttle requires between 200,000 and 400,000 human maintenance hours between each flight! You can barely see the shuttle in the picture above because of the scaffolding surrounding and incasing the vehicle.

Shuttle experts can (and have) elaborated more eloquently than I could on the reasons why the Space Shuttle reusability goals fell so short. But as we prepare for suborbital RLV operations (and hopefully orbital operations) in the not so distant future, I wanted to discuss the implications of an interesting paper by SpaceWorks Engineering (Michael J. Kelly, et al) and its implications for the costs of RLV design & operations.

The paper is called, What’s Cheaper to Fly: Rocket or TBCC? Why?  In it, SpaceWorks compares two hypothetical RLV designs (one rocket-based and one turbine-based) and discusses the expected operational costs of both systems. Both designs made the following RLV performance assumptions:

• Fleet of three unmanned RLV vehicles
• Fleet flies monthly (12/yr)
• Every 10 flights, RLVs spend 6-mo in offsite heavy maintenance facility
• 100 nautical mile LEO orbit
• Payload 20K lb.

What I found interesting was what ratio the paper’s authors leveraged from the Space Shuttle program to include in their analysis.  The Shuttle utilizes seven support personnel for every one technician in their maintenance and integration efforts. For every one technician preparing the Space Shuttle for its next mission, there are seven individuals supporting that technician. This support staff consists of mission specialists, engineering support personnel, etc. Using this 7:1 ratio, the SpaceWorks paper estimated the need for RLV technicians and then extrapolated the number of support personnel needed.

Using the SpaceWorks rocket-based RLV as an example, below are the costs associated with preparing the rocket for its second flight:

Ignore the exact dollars but pay attention to the percentage. 91% of all “between flight” costs is labor using the 7:1 assumption. Stop worrying about fuel cost – start creating low-maintenance designs.  Of course there are other costs that go into the price of an RLV launch: range costs, fixed cost amortization, development cost amortization, etc. But you can see how critical life-cycle costs become in RLV design discussions.

Quoting the paper, “Any program that can do better than 7:1 will probably save significant money over a program that cannot.” And “In addition to considering operational impacts when selecting engines and TPS materials, vehicle designers should strive to eliminate the need for centralized hydraulics, and for auxiliary power units.”

For example, here is what maintenance and integration costs could look like at various improvements to the Shuttle’s 7:1 support personnel to technicians ratio (all other assumptions unchanged):

I end this post with a quote from Byron Ellis, Executive Director of the Jethro Project, on life-cycle cost and Government Acquisition (just as applicable for RLV designers as Government acquisition agents):

“Executive Order 13123 requires government agencies to use life cycle cost analysis (LCCA) to minimize the government’s cost of ownership. Unfortunately, many stakeholders do not understand the concept of cost and proceed to minimize project acquisition (first) cost, rather than total project cost. However, over the life of the project, facility management cost is often two to three times higher than acquisition costs. Therefore, it is essential to design for minimum facility management cost.”

The Space Show's Classroom Series

The Space Show's Classroom Series

Sepatuads.com   Februari 25, 2010   Comment  

David Livingston over at The Space Show is offering a wonderful space primer called The Space Show Classroom.  Dr. Livingston teaches graduate Space Studies courses at UND and has joined forces with Dr. John Jurist (Physicist and blogger) and Dr. Jim Logan (NASA, Life Sciences, Space Medicine) to create the Space Show Classroom series.  20+ audio sessions (1.5-2 hours each) providing a significant overview of rockets, space business, and the challenges of developing the frontier.  In addition to each audio program, you will find course materials at Space Show Classroom Blog.

The series is still new. David is planning to mix in these programs in with the other Space Show content, about two per month.

So far, he has tackled:

1. An Introduction (you could probably skip this one and read the syllabus.)  His main point in this episode: the Classroom series would be more structured and on-topic than a typical program - structured similar to a graduate level course.
2. The Rocket Equation - Paul Breed as guest.  Go to this post of mine and play with the rocket equation spreadsheet if you are new the Rocket Equation.  Then listen to this Space Show.  The team does a GREAT job explaining.  The course material on the blog is also helpful!
3. Flight Dynamics - NASA's Dan Adamo as guest. 

I will try to listen to each one as they are available and will post comments germane to space business on this site.  But I highly encourage you all to get smart...even on this engineering stuff!

The Rocket Equation

The Rocket Equation

Sepatuads.com   Februari 04, 2010   Comment  

Although this is essentially a business blog, some basic engineering knowledge will be required to evaluate potential space business concepts. The rocket equation is one such concept which must be understood. This interactive spreadsheet should give you better idea about how the rocket equation works. The spreadsheet should also give you the formulas which you can use in your own calculations. I have included multiple versions of the rocket equation, solving for: specific impulse, dry mass, propellant, and delta-v. In layman's terms, here is a brief definition of each rocket equation components:

• Specific Impulse (Isp): The efficiency of the engine. The higher the value, the greater the efficiency. Measured in seconds.
• Dry Mass: The mass of the spacecraft. Measured in kilograms.
• Propellant: The mass of the propellant. Measured in kilograms.
• Delta-V: The standard unit of measure for the cost of movement in space. The higher the maximum delta-v for a spacecraft, the more movement that spacecraft can perform. You are out of gas if you run out of delta-v.
• Gravity: Constant for LEO/GEO.