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‘Japan needs to join world satellite market’

Japan: The world satellite market is dominated by two leading powers: the United States and Europe. Russia is also a player to be reckoned with. China and India will also become formidable competitors in the future. Japan needs to join this race, according to Hiroyuki Inahata, General Manager, Space Systems Division, Mitsubishi Electric Corp.

Inahata said, “Satellites, especially communications and Earth observation satellites, are an important part of social infrastructure. Every country wants to have not just satellites but a whole package, including ground-based stations. Developing countries also need a system to train engineers.”

To sell satellites, it is necessary to offer such comprehensive infrastructure in a package. The government’s cooperation gives us a great advantage to meet customers’ needs. It is difficult for individual companies to help establish a system to train experts in developing countries. But the government can provide various kinds of support in this area through universities and research institutes.

However, selling satellites, especially communications, observation and other commercial satellites, is extremely difficult without a sales track record, and often, the hardest part is securing the first sale to a customer.

A satellite cannot be repaired once it is launched. The most important quality for a satellite is that it doesn’t break down. Satellites made by Japanese manufacturers are very reliable and usually keep operating until the end of their expected life. That’s the biggest selling point of Japanese satellites.

Inahata added, “The yen’s (Yen: Japanese currency) appreciation presents no easy challenge for our business. For the satellite business, however, the number of orders we receive is more important than short-term fluctuations in exchange rates. Western manufacturers build seven to eight satellites a year, but Japanese firms produce less than half of that. We would be considerably more competitive internationally if we were to receive orders for eight or more satellites per year. Government intervention to weaken the yen would be a great help for our business. But we should focus on increasing the number of orders we receive.”

The combined annual sales of Japan’s aerospace industry stand at about 250 billion yen (USD 3 billion). The overall sales of derivative businesses using communications satellites and global positioning systems are estimated at 7 trillion yen.

If, for instance, Japan develops necessary infrastructure to operate its own global positioning system with a centimetre-level accuracy, such a system would spawn a variety of new businesses by enabling more precise and sophisticated survey of land areas, ground subsidence and so forth.

The development of space technology started with the assumption that the government should promote space exploration as a national policy. It is an area that needs involvement of the government in addition to private-sector efforts. A national drive involving the government is needed to expand Japanese exports of satellites as an important infrastructure technology.

In such efforts, Japanese satellite makers should first focus on expanding their share of the market overseas rather than on competing with their domestic rivals. Instead of competing over limited domestic demand, Japanese makers should cooperate to expand the market for their products outside Japan.

Source: www.asahi.com