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‘Earth observation sector yet to be independent’

Paris, France: The commercial remote-sensing business is still on a rapid growth trajectory, but weaning the sector from military and government sales will be difficult, as German startup Rapid Eye has discovered, according to Aviation Week report.

Last month, RapidEye announced a search for a new investor to help sustain it until the business model for its system, mainly funded by the private sector (with no government pre-sales commitments), can be shown to be viable. “We’re still convinced our business case is correct,” CEO Wolfgang Biedermann told the Euroconsult-organised Symposium on Earth Observation Business, in Paris. “But customers are proving very cautious in making long-term commitments, so turning the industry into one not dependent on government and big business is going to take a bit longer than we thought.”

Despite RapidEye’s difficulties, the outlook for commercial remote sensing is bright. Euroconsult estimates that sales of commercial data have grown 27 percent per annum since 2007, reaching USD 1.1 billion last year and could quadruple over the next decade. However, the industry remains highly dependent on government and defence use. A number of issues will have to be resolved to curb this dependency, industry executives noted, including low pricing for value-added services, fragmentation of the service industry and assuaging doubts as to the future availability of Earth-observation satellite sources.

But the primary weakness the sector faces, according to many participants, is that it requires useful products to make remote sensing an invisible but essential link for users outside the space community, such as telecommunications. “Finding success in the industry will mean reaching customers who are not remote-sensing knowledgeable,” said John Hornsby, President of MDA Geospatial Services.

Some think the key will be in convincing such big commercial users as energy companies or geo-portal providers to become more involved. In the meantime, Astrium Services CEO Eric Beranger said that the industry is in transition. The company is funding two new Spot spacecraft out of its own pocket—the first time this has been done for a major remote-sensing project. But closing the business case without pre-sales commitments is likely to be difficult. “Commercial business is growing faster than government activity,” Beranger said, “but for infrastructure development we still need the government to prime the pump.”

In addition to government support, imagery providers worry that data policies being adopted by various governments, particularly the European Union, could undercut the commercial business case. “Any policy that improves the availability of archived data will stimulate the market,” said SSTL Chairman Martin Sweeting. “But I am concerned they might use government funding to make near real-time data available at no cost.”

Source: Aviation Week