Telecoms downturn hits satellite makers

Boeing is feeling the pinch

By Tim Bowler BBC World Business Report

Communications satellites have been the backbone of the commercial space sector.

Over the past four decades a huge industry has grown up to supply satellites to the global communications market.

But with the bursting of the dot.com bubble and the subsequent collapse in the telecoms sector, satellite makers are cutting back.

Commercial links

The US Air Force's Vandenberg base on the California coast is America's second most important commercial launch centre.

At Space Launch Complex Two, or slick two as it is known, engineer Paul Fee explained how the five-pointed stand balanced the Delta 2 rocket.

A lot of the Iridium satellites were launched from that pad - which has the highest number of launches of any one pad - nine in one year.

Many countries around the world have developed launch systems

Many of the satellites are made 130 miles down the coast, by Boeing Satellite Systems (BSS) at El Segundo, California - the world's largest satellite maker.

US firms have been slightly cushioned from the current slump in satellite orders because they can compete for government contracts denied to foreign firms.

Orders hit

But Bill Ballhouse, in charge of satellite engineering at BSS, said things are not easy.

The impacts of 9/11 has had a direct impact on the economy and that has affected the ability of commercial customers to finance new projects, he explained.

Despite the sector's problems, satellites themselves have become a central part of most people's lives, improving communications across the globe.

Forty-four years ago, when America launched its first satellite, Explorer One, it was so small you could hold it in your hands.

Since then, as demands on satellite use have grown significantly, so have they.

A Boeing 601 satellite for example, is about four metres high, on top of which are antennae and solar panels which, when expanded, will give the satellite a wing-span of 70-80 feet.

Longer life

Across the Atlantic, there is another problem manufacturers are having to face up to.

They are getting too good at their job.

Satellites last longer than they used to, so customers do not need to replace them as quickly as they used to.

Alistair Scott at the European satellite consortium Astrium, said customers had already brought the satellites they need for the next ten years.

He said that Astrium satellites lasted for 15 years, so he didn¿t expect to see any orders for several years to come.

That longer life cycle for replacement satellites adds to the grim overall outlook for the sector.

And that means there's likely to be more cutbacks and job losses before there's any return to making easy profits from space.