| The text was written by Teodor Buchner D.Sc Ph.D Eng
R&D Expert at EXATEL S.A, Head of Complex Systems Department, Faculty of Physics, WUT
There could hardly be a more misleading term than ‘satellite states of the Soviet Union’, these countries being in fact completely cut off by the USSR from satellite technology. The development of missile, imaging or telecommunications technologies by satellite states was regarded by the Soviet Union as a threat, and a permission to develop the same was granted in such a way as to avoid creation of possible competition in the Warsaw Pact area. Many examples of such suppression in e.g. computer manufacturing are provided in the background literature. The only instance of Polish presence in Space was Major Mirosław Hermaszewski in 1978. This of course fuelled communist propaganda but did not translate in any way into economic development of the country, as Poland did not have permission for that. In fact, space technology was not developed in any state of the former Eastern Bloc.
Legacy of the Iron Curtain
The legacy of the Iron Curtain continues to this day. The countries of the Three Seas Initiative (including Austria!) have only 14 satellites out of a total of 2,667, 11 of which are student projects, technology tests or units designed for observation of Space or Earth’s electromagnetic field, while as few as 3 can be considered, also not without reservations, as commercial projects with measurable economic potential. All of those satellites occupy LEOs, which means that none of the countries of the Three Seas Initiative directly and independently uses their allocated space in the geostationary orbit. This material discusses the strengths, weaknesses, opportunities and threats of national space segment development taking Poland as an example. As the history and current position of Eastern European countries is to some extent alike, it is easy to extrapolate these considerations to any other Eastern European country or initiative, be it Three Seas or V4.
Developments in Earth imaging technology: pelotons and individual breakaways
After joining the European Union and NATO, Poland gained access to Earth observation satellite resources, but it came at a price: in the area of satellite imaging technology, there is not a single Polish private company, state-owned company, or government entity, including the Polish Army, which could perform imaging for civil and military purposes in a fully autonomous manner. Since the Polish market is completely dependent on foreign suppliers, the latter have a complete insight into Poland’s imaging needs. The images are ordered by each entity separately, following a tendering procedure, so that the tendering contractor has an overview of the entity’s imaging needs. This provides tremendous opportunities to obtain information for foreign intelligence: business, civilian and military.
Membership in ESA
In 2012 Poland joined the European Space Agency (ESA) which gave it wider access to technology, while a side effect was that the task of defining Poland’s priorities in space technology was transferred to the said organisation. Strategic decisions are taken by the ESA Council and day-to-day decisions – by the ESA Director General and 11 Directors reporting directly to the former. Among them, there are no representatives of Poland or other states of the Three Seas Initiative. Also, the headquarters of almost all ESA organisational units are located in the countries of the so-called “old Union”. The strategic focus of efforts to create the image of the Three Seas Initiative should lie in placing its representatives in ESA’s upper tiers. Although only 3% of ESA’s 2020 budget comes from the Three Seas Initiative, its countries represent 15% of Europe’s population and a similar potential in terms of market size for satellite services. ESA declares that its mission is to shape the development of Europe’s space capability and to ensure that investment in pace delivers benefits to the citizens of Europe and the world. A mission defined in this way can hardly be contested. Not surprisingly, the assignment of tasks reflects the level of competence. For example, Airbus – a company which declares that it has been cooperating with ESA for 25 years in many satellite missions, and which is owned by the member states that pay the biggest contributions to ESA – is inevitably a key partner from ESA’s perspective, with potential and competences significantly greater than the entire space potential of Poland or the Three Seas Initiative. Suffice it to say that due to COVID-19 Airbus has announced job cuts of around 15,000 employees. This is roughly five times the total employment in the Polish space industry.
The first and probably not the last harbinger of the growing role of the Three Seas Initiative is the construction of the service centre for the European GNSS navigation system in 2004 in Prague, Czech Republic. The centre is going to expand its mission to include, inter alia, building the market position of the system and handling security issues. It seems important to establish cooperation in this area with the Czech government within the framework of the Three Seas Initiative. An interesting scheme that Estonia and Hungary have taken advantage of is the possibility of launching space business incubators under ESA’s auspices – this example will be discussed later in this paper.
It is worth mentioning that Polish security experts have the potential and experience that make for their strong presence in international competitions. In the Hack-A-Sat competition organized in 2020 by the U.S. Air Force) dedicated to the security of satellite technologies, the Poland Can into Space team came second in the overall score, although these technologies are not widely developed in Poland.
Many of ESA’s activities obviously involve strong space companies such as Airbus, Thales Alenia Space or SES, which often become stakeholders as well as implementers and, consequently, beneficiaries of ESA projects (which is hardly surprising): European space powers such as France, Germany and Italy cover 60.7% of ESA’s budget. ESA defines its mission as a platform and a facilitator of consensus among European nations with regard to the research and development of space technologies and their applications, with a view to their use for scientific purposes and for operational applications. The biggest beneficiaries of ESA are countries that have their own space technology. As simple as that: the broader matrix of competencies you cover, the greater share in ESA tenders you will have. The documents defining the Polish space strategy indicate that it is assumed that the Polish raison d’etre is for the Polish space industry to develop under the wing of ESA. Clearly, there is much to be learned from organizations like ESA, and the cost of satellite missions encourages caution in their strategic design. Equally commendable is the participation of Polish companies as manufacturers of parts used in ESA projects. But we cannot fool ourselves: Poland does not have a large satellite industry yet and therefore has no influence on ESA decisions, while the stakeholders and end users of satellite technologies developed by ESA are the largest players in the European space market. As the old saying goes: money begets money. The bigger industry you have and the more you put into ESA, the more you benefit from working with them. The question is whether the participation in ESA contracts should be the only entry ticket to development for Polish companies? While speed swimming in a pool full of sharks will undoubtedly improve a swimmer’s athletic form, they may not live long enough to reach the end of the pool. It is worth asking ourselves whether the role of lower tier suppliers (even key ones) of parts for ESA is enough for us in a situation where the needs of the Polish market and Polish taxpayers’ funds for imaging services are flowing abroad.
Luxembourg and South Korea: strategic autonomy
In this respect, Luxembourg is the great example: its contribution to ESA’s budget is lower than Poland’s (despite a ten times higher per capita GDP), while its path of satellite development is constructed within the framework of its own policy. Luxembourg sees the development of ISR (Information Surveillance and Reconnaissance) technology as a key element in the expansion of its military strategy. Such development is being carried out i.a. under the LuxGovSat public-private partnership between the Luxembourg government and SES which manages a fleet of 70 satellites. This solution is greatly supported by the former Deputy Prime Minister and Minister of Defence, Etienne Schneider. Luxembourg is bold enough to get its foot in the door of the European and NATO market, although it would seem that considering the dominant position of the European leaders there is no place for it there. In line with Luxembourg’s declared multilateral policy, the state has not neglected transatlantic relations. For example, in 2014 Luxembourg concluded a major contract with the US arms company Northrop Grumman for a ground surveillance system for NATO. SES reconciles America and Europe by ordering satellites from both Boeing and Airbus. Of course, SES cooperates with ESA, for example in the quantum cryptography programme. Having 70 satellites is an asset for SES to autonomously define areas of cooperation with ESA. This is an example worth considering.
An even more radical path towards space powers has been taken by South Korea, which has spent 30 years building its space programme from scratch, developing its own launching systems, its own space centre and multi-stage ballistic missiles, and its own satellite solutions. In a way, this also explains why North Korea, with such a disastrous state of the country, society and economy, is developing its own missile technology.
Who Will Set Goals for Polish Space Industry
Poland’s plan, as declared by the Ministry of Economy and in accordance with the Polish Space Strategy, is for Polish companies to achieve a 3% share in the turnover of the European space market. Of course, the growth of competences in this sector and the growth of its capitalisation are crucial; its significant consequence is the development of human resources for this high-tech industry. However, if Poland does not take the initiative of defining its own goals for autonomous development of the economy on the part of its public administration or state-owned companies, the economic effects of this development will be consumed in their entirety by the economies of other countries (it is known that integrators who bear the greatest risks also earn the largest revenues). Note, that increased potential of Polish space sector is, in the natural way, increasing European state sector, to which it formally belongs. Industry representatives gathered at Congress 590 in 2018 made it clear that the role of the state and public administration would be crucial for the development of space industry. However, not everyone agrees. We present the most interesting comment below: “We expect our country to invest less and procure more. It is better when the country procures services rather than subsidizes them. Procurement is just simpler. Subsidies have shortcomings and distort the market process.” Remember that the American Apollo programme which has been the flywheel of the American economy and geopolitics came about through an investment made by a US government agency. The administration is eager to procure the services created thanks to its investment. The two models do not contradict each other.
A national space sector programme that would aim at autonomous imaging capabilities has not taken off to this day, despite much preparatory work ordered by the NCBiR (Polish National Centre for Research and Development) and a feasibility study done by a consortium led by the Military University of Technology back in 2015. Paradoxically, the delay in implementing this programme may be actually a good thing for Poland, since in the meantime a discussion has begun on the advisability of building large satellites, weighing more than 0.5 tonne. Also, the market for nanosatellites or microsatellites has developed significantly. The weight reduction is related to innovations in expandable optics: to achieve the highest resolutions – below 1 m per pixel – the optics exceed the size of a nanosatellite. Optical systems that were once implemented inside a heavy-weight observation satellite can now be built using expandable optical module technologies. These innovative technologies (including those related to SAR imaging or optoelectronics) are also developed by Polish companies.
When confirming Poland’s plans to build its own satellite, Polish Prime Minister Mateusz Morawiecki stressed the importance of companies’ initiatives. The recently concluded competition “Fast Path Space Technologies” held by the Polish National Centre for Research and Development also seems to support this model of action. Such a programme is mentioned in the Polish Space Strategy, but judging from the structure of the document, it does not have a high priority. Neither the Strategic nor the Detailed Goals clearly state that the way for Polish companies to acquire their own imaging (Strategic Goal No. 2) is to develop their own satellites. Specific Goal No. 2 refers to the development of satellite applications and Specific Goal No. 3 to the development of capabilities: none of these objectives clearly defines the priority of the Polish programme to build its own satellite and become independent from foreign markets in terms of image acquisition. It seems advisable to strengthen, starting from the level of legal acts and conceptual documents, the role of the state as the driving force behind Polish space policy, and to boldly define its objectives with the help of state assets and investment instruments.
Is Space a Scientific Object or a Business Target?
We sometimes hear representatives of the Polish space community (especially those who focus more on science than on business) who are critical of the advisability of developing the Polish Earth observation programme, since, first of all, there are so many other interesting objects in Space and, secondly, since so many corporations already have or are planning to launch imaging satellite constellations (DigitalGlobe, Galileo Group, Planet Labs, to mention just the most prominent). Well, thanks to the work of the eminent Polish astronomer Aleksander Wolszczan, we now know that there are many planets in the Universe, but for some reason the observation of one particular example: the Earth, seems to be of special importance. As if in response, industry representatives state that the National Space Programme budget should not be another source of funding for scientific research. Even such extreme opinions can have common ground. Building a satellite will provide many interesting challenges for science, as the example of Korea shows. Also, testing different stages of technology development can be perfectly combined with scientific observations.
National Earth Observation Project
It is also worth mentioning the recently concluded “Fast Path Space Technologies” competition held by the National Centre for Research and Development: undoubtedly, such initiatives increase the Polish space potential, however, we should consider whether even the most ambitious company from the SME sector is able to carry out the entire investment, technological, legal and market process related to the construction of imaging services. Usually, the focus of such companies is on key technology elements (from their point of view) – for example expandable optics or on-orbit processing capabilities. The level of financing obtained from the National Centre for Research and Development has already been commented on, and the requirement to provide own contribution exposes such companies to risky capital decisions, which is beyond the state’s control. On the other hand, in the case of the SZAFIR programme, the intellectual value used to be seized by the Ministry of National Defence – such practice is not kindly looked upon by companies, as it can lead to the disappearance of dual-use technologies from the civilian market.
It seems that the priority for Poland is to launch its own satellite or a constellation of satellites providing imaging services to Polish entities and to ensure long-term financing of this project. Another component of this project is to develop demand on the part of government by demonstrating the benefits associated with the use of satellite data. Since engineers (and banks) are still cautious about Space, so are government officials. The initiative should come from the state, while the needs of the military and civilian institutions should be balanced, complementing and mutually redundant when necessary. Since military security and the budget for the development of the Armed Forces is generated by the society thanks to the growing competitiveness of the Polish economy, this arrangement is a system of connected vessels. It would be important to recognize the views of the Three Seas Initiative statesor V4 in this regard and to consider building a space policy together. An example of this is NATO, which has a common policy but implements it through national initiatives.
Structure and Stability of Polish Space Segment
We should also refer to the issue of ownership of Polish satellite companies. Companies in this sector, often specializing in high technologies and in the past subsidized by the state under various development programmes, are almost 100% private. At the same time, they are SMEs with a relatively small capitalisation, which increases their mobility and ability to conduct aggressive growth and innovation development policies, while making them vulnerable to takeover attempts. Also, the Treasury does not have any tools to control the investments it has made in this sector. A commendable exception is the 19.35% of Creotech shares, which were acquired by Agencja Rozwoju Przemysłu S.A. The Polish market is fragmented, and the undoubted competencies are scattered among small companies, which often compete for the same grant programmes, and after the launch of their services will compete among themselves (and with global giants) for the Polish imaging market. With a few exceptions, most recently exemplified by EXATEL’s declaration, Polish public sector companies do not define their own goals for the implementation of the Polish national component of space policy and economy, either in imaging or telecommunications. It seems advisable to regulate the imaging market in order to reduce imaging costs and share orders, as well as to coordinate activities such as the creation of a space cluster, as proposed by EXATEL, and use of capital investments through state-owned companies or the Polish Development Fund in order to implement the Polish space strategy: targeted at either state-owned companies or outstanding start-ups in order to consolidate the market. It is easier for larger organisations to bear the investment risk or to invest in the preparation of a tender, whether for ESA or for the Treasury. The plans and ideas of the Polish visionaries of the space market should be transformed into cooperation: whoever has doubts in this matter should follow the Airbus business history.
Not just imaging – the space digital bus and its terminals on Earth
If we look at satellite telecommunications technology from the perspective of Polish landscape, saturation with satellite technology in the form of antennas and decoders seems to be quite high – however, this seems to be the only point of view from which the situation looks so optimistic. The list of satellite telecommunications operators maintained by the World Teleport Association includes about 30 entries, from the same countries as always (outside Europe – Canada, China, Russia and Australia, in Europe – besides the Big Three (France, Germany and Italy) – also the United Kingdom and Norway). However, since Algeria, Thailand and Malaysia have also been placed on this list, it seems clear that determination and the order of defining strategic goals are of the most importance, not just the GDP.
Telecommunications includes television, radio, satellite telephony and broadband Internet, which reaches places where fibre optics does not (not coincidentally, the operators include island countries). Although after the launch of Elon Musk’s 12,000 satellites, which leave the production line at a rate of 120 per month under the Starlink project, it may seem that the stage is already set, the broadband Internet is not the only satellite telecommunications service with great development potential, while its operational parameters still cannot compete with fibre optics. Also, various security issues arise concerning potential use of satellite Internet in the area of public entities and critical infrastructure operators – and that creates a lot of room for potential growth. The terrestrial component of satellite telecommunications, i.e. teleports that allow sending and receiving information is an area where Poland had its capabilities, which it lost in 2017 with the sale of the only Polish teleport TTComm (has been the main provider of services for the Ministry of National Defence since 2003, it is also on the list of companies of particular economic and defence importance), but there are signals from both the civilian and military markets that this capability is being recreated. According to the World Teleport Association, in the Three Seas Initiative area, only Austria, Hungary (the operator is SES), Slovenia and Bulgaria own independent commercial teleports that are affiliated with the organization, although of course there are more broadcast antennas and non-affiliated teleports (for example Antenna Hungaria). It is worth undertaking a strategic initiative to review the teleports in the Three Seas Initiative area and divide the entities into private ones that are under full or partial state control, which will determine the possible scope of their use. Satellite telecommunications provides an alternative to fibre optics and complements initiatives such as the 3 Seas Digital Highway. In the local market, satellite telecommunications is a natural complement to IT infrastructure, especially that dedicated to the public market – an investment in technology through EXATEL S.A., which has shown that it can take on major technological challenges, such as building SDNBox and SDNcore: the first in many years original Polish broadband network solutions for the civilian market, which form a solid technological foundation to support the #Polish5G project.
Space digital bus – radio or optics
When it comes to satellite telecommunications, the situation is constantly changing. One of the active players that stimulates development (in the direction it chooses) in our part of the world is the European Union, represented by its various agencies. One of the most important initiatives concerns the public sector, in the form of the EU GovSatCom programme. Its aim is to provide secure telecommunications services for administration and government agencies, rescue and search services, or EU agencies such as FRONTEX. The space component of this programme is currently at its pilot stage; with plans within this area declared by, for example, the above- mentioned SES company. Polish entities also declare their needs in this area. Poland’s enrolment in this programme is recommended as one of the objectives of the Polish Space Strategy, and circles close to ESA, SES and POLSA conduct information activities in this matter. Joining GovSatCom is a possibility to be considered, due to the reduction of the costs of maintaining the telecommunications infrastructure; however, it is necessary to conduct an in-depth analysis of Poland’s needs by all institutional stakeholders and risk analysis specialists, taking into account the needs and potential of the Three Seas Initiative and V4 – and it should precede such a strategic technological decision. Each enrolment in the joint programme constitutes the relinquishment of a part of sovereignty as regards the choice of development objectives, technology and technology partners. It is also worth remembering that Poland does not use its space on the geostationary orbit! Joining the GovSatCom programme does not diminish the potential importance of having a Polish telecommunications satellite. The need of its development may be one of the conclusions of the above- mentioned analysis.
The European Union, in particular DG CONNECT, is also sponsoring an interesting project – EuroQCI – which is at the feasibility study stage. This is an initiative to integrate national quantum cryptography networks (or build them, where they do not exist). Quantum cryptography, in short, is the method of using dedicated optical, terrestrial or satellite links to implement quantum key distribution (QKD) that enable secure connections. There are various directions in this initiative. For example, Austria participated in a Chinese programme to build such a satellite, while the first QKD-encrypted transmission outside mainland China occurred between Beijing and Vienna. It is worth considering the possibility of developing quantum optics technology in Poland, especially given the strength of the Polish scientific community in this area.
Another direction for optical links is Space. Optical links between satellites are already in operation (including commercial ones ), and if the HydRON project (high-resolution optical links) developed by ESA is successful, it may be that optical links on Earth are functionally complemented by optical links in Space. In the area of optical connectivity Poland can use the potential of the Polish optoelectronic industry.
In conclusion, it can be said that the technological arms race is as fast in Space as it is on Earth. Space technologies are still treated as “rocket science” in former Eastern Bloc states, but it is worth reversing this trend – the first symptoms of that can be seen in the activity of Polish satellite market companies, such as SatRevolution, Creotech, EXATEL, Scanway or Thorium, or many (!) foreign companies operating in Poland and employing Polish space industry engineers. Poland should be an active player in this market, which raises the technological bar for companies and, through a system of development incentives – such as the recently concluded “Fast Path Space Technologies” competition held by the National Centre for Research and Development – increases the Polish space potential. We believe that EXATEL has a key role to play in this process. As a terrestrial telecommunications operator and a technology company owned by the Treasury, it seems to be perfectly positioned to carry out investment or R&D activities.
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