SpaceX Explosion Could Have Ripple Effect in Telecom Industry

Last week’s SpaceX rocket explosion is expected to create a ripple effect that could impact the space industry in more ways than just from the damage left behind by the explosion itself, space experts are warning.

“No doubt SpaceX will fix the problems, but if you’re a customer, time is money,” Scott Pace, director of the Space Policy Institute at George Washington University, told The New York Times. “This will get customers looking at alternatives. It may give competitors an opening and slow down SpaceX.”

Already, the explosion is threatening the $285 million sale of Space Communications, an Israeli satellite operator, to Xinwei Technology Group, a unit of a Chinese company, the Times reported. The deal hinges on the launch of the Israeli-designed Spacecom Amos 6 satellite.

The explosion has also delayed the launches of communications satellites supporting international mobile phone and digital television services. The explosion, in Cape Canaveral, Florida, will also likely disrupt NASA’s cargo deliveries to the International Space Station.

SpaceX, a private space launch company led by entrepreneur Elon Musk, has an overall good safety record, but last week’s explosion and a failed launch last year are raising questions about the company.

The company will need to go through a federal investigation over the explosion and rebuild the launch pad damaged in the explosion, and that will take time – lost time for telecommunications companies.

It takes two years or more to build a satellite, notes the Times, and there are high risks in launching them. However, once in space, the devices bring in profits for as much as a decade, so the more time the satellite sits on the ground, the longer companies are forced to wait to reap those profits.

Iridium Communications, SES of Luxembourg, EchoStar, and KT Corporation of South Korea are all under contract for upcoming launches.

SpaceX also has competition for its satellite business. Arianespace, a French multinational company, is its main rival. In addition, International Launch Services, a joint venture between the United States and Russia, which has been launching Russian-designed Proton rockets out of Kazakhstan.

SpaceX says it’s too early to predict when launches may resume. Its Florida launch pad remains damaged, and other launch pads remain under construction at Vandenberg Air Force Base in California and in Florida.

The aftermath could also affect SpaceX plans for manned flights for its Department of Defense military and national security satellites.

The explosion investigation and launch pad repair seem sure to scuttle SpaceX’s aggressive launch plans. The company had hoped for as many as 18 rocket launches this year. It has had eight so far; last week’s would have made nine. Overall, SpaceX has had 27 successful launches of Falcon 9 rockets.

Also, launch insurance policies may not pay for the damages. Preflight insurance will likely pay just a fraction of a percent of the damage costs, while launch policies may not kick in, as the explosion happened during a prelaunch test.

from Department of Private Space Inc.