New Chinese Launch Vehicles Raise Concerns about Unfair Competition 

 

The development of new Chinese launch vehicles has raised concerns among other, private companies that also provide rideshare launch services and small launch vehicles. Chief among their worries is the fear of unfair competition, which could drive down launch prices. Companies who provide those services could see their already slim profit margins narrow to the point of layoffs, or even shutting their doors entirely.

This discussion came to a head last week when the executive of several small launch companies met at the Satellite 2018 conference. Experts anticipate the price change to happen within the next five years, sparked by an increase of launchers developed by or entering service in China. While most of these launchers were developed by the government, concerns extend to those by private organizations with ties to the Chinese government.

Small signs of these changes are already underway. CubeSat launches were once about $400,000 per launch, but now have dropped down to $250,000. Rich Pournelle, vice-president of NanoRacks, a company that offers smallsat launch services, told the group that he expects to see prices drop even further. This price drop is not expected to just affect launches in Asia, but launches across the globe, as other providers scramble to keep up with the low rates China can offer.

At the moment, companies located in the United States are prohibited by law from launching any satellite, of any size, aboard a Chinese vehicle. Current export restrictions are the cause of this prohibition, but some in the space industry worry about the possibility of regulatory changes. These could come as the result of pressure by other private companies looking for the cheapest possible launch price.

Companies in other countries do not have the same restrictions, and many of them have plans to use these less costly, Chinese launch vehicles. Canada launched a CubeSat that is planned to form the basis of a constellation of data relay spacecraft using a Chinese vehicle in January. Danish company GomSpace has also relied on Chinese vehicles for recent launches, as has a company in Argentina. These small companies are drawn to the lower prices offered by Chinese vehicles. Executives say that it helps them stay competitive in the industry. Without an inexpensive launch vehicle at their disposal, it would take years if not decades to raise the additional funding. Other companies cite the ease with which it is to plan launches, given friendly political relations with the Chinese government.

Other industry leaders are not worried about the price changes. They believe that the market is fluctuating as expected, given how technology has evolved and developed over the years. In addition, there is a bigger market for launch vehicles now than ever before, with many organizations eager to launch as soon as possible. In many cases, they are happy to pay more for an earlier launch date. If smaller companies start using less expensive launch services, it does free up the more established launch providers for bigger companies, looking to launch fast.

(Source: http://spacenews.com/smallsat-launch-providers-face-pricing-pressure-from-chinese-vehicles/)