Last week saw the GOVSATCOM conference held in Luxembourg. The conference featured several hundred attendees and speakers across the whole government satellite communications and military satellite communications (govsatcom and milsatcom) value chain. A variety of themes were covered during the one-day event, but from a satcom perspective, the most important takeaways were the rising importance of satcom as a strategic industry, and the increasing impact that technological change is having on the satcom value chain. These topics were largely addressed at a macro level during the morning speeches, with the afternoon discussions being more specific in nature. As an attendee, Omkar Nikam of Orbital Gateway Consulting came away with a number of insights on the future of the govsatcom and milsatcom markets.
Regionalism and Nationalism are On the Rise, to the Benefit of Operators
Two of the conference’s keynote speakers were the CEOs of the two satellite operators operationally headquartered in Luxembourg-SES and GovSat (Intelsat has a corporate HQ in the Duchy, but has its operational HQ outside of DC). The two CEOs spoke only briefly, but their words carried insight about the market today.
GovSat CEO Patrick Biewer spoke about the general success of GovSat-1 thus far. Launched in early 2018, GovSat-1 has currently sold 20% of its ~68 TPEs, with customers including NATO and the Belgian and French Navies. While Biewer noted that it was too early to speculate whether GovSat could sell additional capacity on a GovSat-2, the European Union appears in support of more funding towards govsatcom. Last year, the EU voted to add a GovSatCom component to its space policy, with this amount expected to fall between EUR250–500M, a huge range to be decided during ongoing EU negotiations.
Ultimately, the GovSat program is emblematic of the strategic importance that regions and nations are placing on specific industries, combined with the degree to which the US-EU relationship is strained. In the case of Luxembourg, the country has likely picked good timing to invest into GovSat, given that Europe should justifiably be less certain of the US to reliably provide milsatcom assets. Should a second GovSat be procured using EU funding, the ownership situation of GovSat the company would become more complicated, but it…