The Defense Department has been looking for ways to ease stress on its own satellite networks and has increasingly turned to commercial providers for extra bandwidth to handle demands such as drone surveillance and radio communications.
“The requirement for bandwidth is insatiable,’’ said Jim Simpson, vice president of business development for Boeing Space and Intelligence Systems, part of the Chicago-based aerospace company.
Contract winners would qualify to fly and operate government equipment on commercial spacecraft. That hitchhiking gear, known in the industry as a “hosted payload,” may include sensors or other instruments to detect missiles, monitor orbital debris and track troops.
The U.S. military may fly more than a dozen hosted payloads during the next decade, said Don Brown, vice president for hosted payloads at Intelsat General, part of closely held Intelsat SA, the world’s largest commercial satellite operator.
That would put the potential value of the Air Force contract at almost $1 billion, assuming it flies 12 payloads at a cost of $82.5 million apiece, the service’s price tag for a demonstration program last year.
‘Waiting for a ride’
There is pent-up demand for the business, according to a report published last month by Northern Sky Research, a market research company based in Cambridge, Mass.
The Defense Department has about 70 experimental payloads, and NASA and other agencies have “instruments sitting on shelves waiting for a ride,’’ according to the report.
The global market for hosted payloads is expected to at least triple to more than $300 million annually in the next decade, with at least $1.8 billion in total revenue during that period, it states.
The Pentagon has experimented with hosted payloads. It’s a different approach than the current practice of leasing bandwidth, or capacity, on commercial satellites already in orbit.
The military now relies on commercial satellites for about 80 percent of its bandwidth needs, which has soared because of demand from war zones, Christopher Baugh, president of Northern Sky Research, said in an interview. Drone video captured over Afghanistan is distributed on satellites owned by companies such as SES SA and Intelsat, both based in Luxembourg.
The Pentagon spent at least $655 million on commercial satellite services in fiscal 2010, up more than sixfold from fiscal 2001, according to estimates compiled by the Defense Information Systems Agency. The amount of bandwidth it purchased increased sevenfold, to 9.1 gigahertz, during the same period, according to the defense agency.