Surrey's Serious Stature

June 24, 2008 By: Mary Jo Wagner

In many respects, Surrey Satellite Technology Limited (SSTL) could be considered the little engine that could. Launched as a spin-out company from the University of Surrey in 1985, SSTL has endured years of skepticism from the major space manufacturers and commercial satellite companies as it has endeavored to "change of the economics" of space through its lower-cost, small-satellite designs. However, SSTL has laid steady tracks to prosperity in the small-satellite industry. It has not only positioned itself as the industry leader in microsatellite technology, but it has attracted major satellite players who smelled a commercial opportunity.

EADS Astrium was the company that bit hardest, agreeing in April to acquire virtually all of SSTL from the University (save the University's one percent share) for a cash value reportedly between $79 and 98 million — twice SSTL's revenues and more than 20 times its reported earnings. Not bad for a company previously regarded more as a research playground. Indeed, in becoming a wholly owned subsidiary of Astrium, SSTL has been transformed into a serious satellite company. In an e-mail interview with EIN's Mary Jo Wagner, SSTL's Chairman Sir Martin Sweeting discusses how this determined train stayed on the right track, how satisfying "serious" feels, and what kind of tracks SSTL will lay in the near future.

MJW: SSTL has been a relatively silent success story, launching 27 small-satellite missions in 27 years without much media fanfare. Was that a conscious decision to fly a bit under the radar while you steadfastly built up the company to become the industry leader in microsatellite technologies? How has SSTL managed to maintain such staying power in the increasingly competitive small-satellite space?

MS: It is true that SSTL has not had much media attention outside the technical space press, but we took the view that we would rather get on and actually do things rather than make a big noise beforehand. We also realize that "flying under the radar" meant that the big companies didn't take us seriously — until we had firmly established our niche and were strong enough to survive. SSTL has maintained its position in the small satellite market because we have great determination and also have an ethos of continual innovation — both of which are due to the people we have and attract.

MJW: Clearly SSTL's success has not gone unnoticed, as several major space manufacturers, including Thales Alenia Space and OHB, have been vying to buy the company. Ultimately, EADS Astrium NV offered the winning bid in April. How did the sale come about, and what impact will it have on SSTL?

MS: Yes, there was a lot of interest in the sale of the University's shares in SSTL. After a detailed evaluation, the EADS offer proved to be the most attractive — particularly since they wanted to keep SSTL as a separate autonomous company within the EADS group and also wished to invest in space research at the University — to maintain innovation.

MJW: An interesting aspect of the sale is that SSTL will not only remain an independent organization, but will be allowed to compete with other Astrium business units, including its own small satellite business. For example, you will be teaming with OHB for the 26 Galileo satellites due for completion toward the end of 2008. Were these freedoms in fact the main selling points of the acquisition?

MS: The freedoms (autonomy) were an essential prerequisite. But EADS also offered a good price and support to grow the University academic space research through the Surrey Space Centre.

MJW: Will the sale present an opportunity for SSTL to become a player in the commercial satellite sector?

MS: Yes, EADS has the financial strength to support SSTL's business plan that includes a number of commercial business opportunities that the University was unable to support since the University is an educational establishment and not a commercial investor. With EADS financial backing, we anticipate moving ahead in the commercial satellite sector.

MJW: The sale includes SpaceX shares. With SpaceX's aim to develop its more cost-effective Falcon rocket launcher, do you think SSTL will maintain an attractive ally in the satellite-launching game? Could that also enhance your opportunity to gain a more prominent foothold in the commercial satellite sector?

MS: Certainly, SSTL will continue its close relationship with SpaceX, as we have entirely complementary business models for affordable access to space, which we expect will be able to offer very attractive solutions to the commercial satellite sector as well as other sectors too.

MJW: Astrium already has its own Myriade small-satellite line. Will SSTL begin using that line as well, or will it remain an Astrium-only platform?

MS: Myriade is a French platform funded by CNES. SSTL will continue to offer its heritage platforms developed over the last 27 missions.

MJW: From the outset, SSTL's business mission was to design LEO, small satellite missions. Have you not been tempted to try your hand at developing a big, commercial, high-resolution satellite?

MS: We see little point in SSTL following the classical big-satellite path. There are other companies that are better suited to that approach. Rather, SSTL will continue to focus on our alternative approach and to "changing the economics of space." SSTL is working on small satellites with about 1-meter resolution.

MJW: With your approach to "changing the economics of space," do you think that big commercial satellites could be produced more cheaply as well?

MS: It is not clear. We believe that our approach can be used to produce a 2-tonne GEO communications satellite — that's considered "small" in the GEO class — and I am sure there are elements of what/how we do things that could be of benefit to larger satellites. But as the mission cost (including launch) grows, then the economic model changes. If there are lower-cost GEO launches, perhaps through SpaceX, then we may see clusters of lower-cost smaller GEOs replacing single big satellites for some applications.

MJW: With your Earth-observation satellites, you seem to have focused predominantly on the agriculture and military markets. What is the reason for that?

MS: We focus on agriculture; forestation, including illegal logging and fires; water resource management; locust prediction; pollution monitoring; land-use mapping; pollution census (in Nigeria); and of course, disaster monitoring and management. These have been driven by user interests and the nature of our satellites, which offer wide image swaths and an operational constellation that provides daily revisit.

MJW: SSTL conceived and developed the Disaster Monitoring Constellation (DMC), the first Earth-observation constellation of low-cost, small satellites predominantly for disaster monitoring. Five DMCs have been launched to date. How many more are planned?

MS: We are now building the second-generation DMC, comprising satellites from Algeria, Nigeria, Spain, and the UK, with improved ground resolution of 22 meters (multispectral 600-km swath), 2.5 meters panchromatic and 5 meters multispectral (narrow swath). We expect more to follow.

MJW: How successful has the program been? Has it surpassed your expectations? What kind of need does it fill in the market?

MS: The DMC has been amazingly successful and it has certainly fulfilled my expectations. The DMC provides a unique data capability comprising a wide instantaneous image swath at medium resolution with a high temporal resolution (daily revisit). This has proved extremely useful to a wide range of users worldwide, as no other system can provide that capability.

MJW: SSTL formed the DMC International Imaging company in 2004 as a wholly owned subsidiary of SSTL to commercialize and sell imagery from the DMC constellation. How has that venture been going? Will the Astrium acquisition impact the company?

MS: DMCii has proved very successful, with over 1 million pounds (U.S. $1.95 million) of data sales this fiscal year. It is also the UK lead organization in the International Charter (Disasters) program. DMCii offers EO data services that are an integral part of SSTL's satellite business, so the EADS acquisition will not involve any change to DMCii either. Other than the opportunity to access deeper pockets for new business concepts, it will be "business as usual."

MJW: MacDonald Dettwiler and Associates (MDA) contracted SSTL to design and provide the platform for the RapidEye agriculture-focused satellite constellation. What is the status of this program?

MS: The five RapidEye satellites have been completed and are ready for launch in a couple of months. Indeed, they are currently being shipped from SSTL to Kazakhstan.

MJW: In July 2006, SSTL and Astrium UK announced plans to design a small SAR X-band satellite. What is the plan and the progress of this mission?

MS: We are working on the design of a small SAR satellite. We want to achieve a low-cost SAR mission similar to the DMC. The satellite is being designed will have a range of resolution options depending upon the nature of the customer and applications. We expect this to move ahead more quickly with EADS Astrium as our new parent. We will release details later this year.

SSTL and Astrium are working on a small X-band SAR satellite similar to the low-cost DMC model. That could make SAR technology affordable for developing nations or for other users with tight budgets.

MJW: How many other projects do you have under way?

MS: We currently have 14 satellites in various stages of manufacture and test: the five RapidEye; two Nigeria satellites; the Spain-DMC; the UK-DMC2; three Russia satellites; one Canadian; and the GIOVE-A2. The Canadian satellite is under contract with MDA to deliver a satellite platform as part of the Sapphire space object surveillance program. MDA has been selected as the mission prime and will lead the Sapphire mission team that will include SSTL and COM DEV of Cambridge, Ontario, who will build the payload. As part of the contract, SSTL will manufacture a Ground Control Centre and install it in Canada.

MJW: What are SSTL's future plans? Any interest in nano-satellites or Cubesats perhaps?

MS: Alongside the SAR mini satellite and improved EO satellites, SSTL is developing a small Geostationary Communications Satellite, a lunar orbiter, a 1-kg picosatellite — and a lower cost early-service option for Galileo.