PROSPECTS FOR SOVIET COMMERCIAL EXPLOITATION OF SPACE SYSTEMS AND RELATED SERVICES

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Directorate of
Intelligence
Secret
Prospects for Soviet Commercial
Exploitation of Space Systems
and Related Services
Secret
SOV 83-10186DX
SW 83-10072DX
December 1983
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Prospects for Soviet Commercial
Exploitation of Space Systems
and Related Services
Intelligence
This paper was prepared b Office of
Soviet Analysis and
Turric-e-ol
Scientific and Weapons Research.
Comments and queries are welcome and may be
directed to the Chief, Policy Analysis Division,
SOVA,or to the Chief, Space
Systems Division, OSWR,
Secret
SOV 83-10186DX
SW83-10072DX
December 1983
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Prospects for Soviet Commercial
Exploitation of Space Systems
and Related Services
Key Judgments Moscow has clearly indicated its intention to compete for a share of the
Information available growing international market for space systems and related services and is
as of 25 October 1983 increasing its capability to do so. It is concentrating its marketing efforts
was used in this report.
on the launching of satellites and the sale of communication services, where
its goals are to supplement its hard currency earnings, gain access to
customer-supplied technology, open up markets for other products, and
increase Soviet prestige.
The Soviets have said they will enter the launch service market with the
SL-12/13 Proton, a booster that has maintained about a 90-percent
reliability rate over the past 10 years and that has a payload capacity about
65 percent as large as that of the US shuttle.
they will have a sufficient number of Proton boosters-between four and
six annually-to use for commercial launches and could probably maintain
a reliable launch schedule
Moscow has already succeeded in having the Proton included on a list of
candidate launch vehicles for the International Maritime Satellite Organi-
zation (INMARSAT) and is underpricing Western competitors. The
Soviets are also developing a heavy-lift launch vehicle and a shuttle orbiter
that will greatly enhance their ability to compete with the United States,
the European Space Agency (ESA), and Japan. We believe this system will
become fully operational during the period 1990-91. Successful develop-
ment of a Soviet space tug with capabilities to retrieve satellites for repair
and refurbishing would also increase the attractiveness of a Soviet contract.
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The Soviet-sponsored INTERSPUTNIK organization has attempted to
compete with the US-sponsored International Telecommunications Orga-
nization (INTELSAT) in marketing international communication services
in the Third World since the late 1970s. INTERSPUTNIK, which has
primarily served the needs of Soviet Bloc members, remains a much
smaller organization than INTELSAT, which currently provides services
to more than 120 countries. INTERSPUTNIK has, however, succeeded in
attracting new users among pro-Soviet Third World countries, including
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SOV 83-10186DX
SW83-10072DX
December 1983
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Algeria, Angola, Grenada, Iraq, Libya, and Nicaragua and has been
willing to offer financial and other incentives to attract new customers for
its international services. We believe its fees for domestic services may be
well below those charged by INTELSAT for similar services
Although there is no evidence of Soviet intentions to manufacture commu-
nications satellites for foreign countries or firms, the USSR is capable of
doing so.'To succeed in such an effort, however, the Soviets would have to
either increase the service life of their satellites or price them low enough to
offset the increased replacement costs that the customer would incur
because current Soviet communication satellites have a shorter lifespan
than Western equipment.
In 1977 the Soviet Union publicly offered to provide photographic services
and remote-sensing data from outer space to other countries. Although the
Soviets have given no subsequent public indication that they intend to
develop a market for such data, Moscow may be waiting until the end of
this decade, when we expect it will have an operational remote-sensing
system competitive with a US system and a projected French system. The
Soviet policy of requiring prior consent from the target country before
disseminating data with potential military or economic significance to third
parties will probably aid in marketing remote-sensing data to Third World
countries. The only profitable market to develop, however, may be for
value-added computer-processed data, an area in which the Soviet Union is
not expected to become competitive for some time
As the world's leader in experimental research in material processing in
space, the USSR would enjoy a considerable advantage over potential
Western competitors should it decide to market products manufactured in
space. It has conducted extensive experiments in materials processing on
board the Salyut 6 and 7 space stations. Officials associated with the Soviet
space program have indicated that Cosmos 1443, which docked to Salyut 7
in early 1983, is a prototype module of a future multimodular space station
that will be used for a variety of missions, including materials processing.
Although most of the materials that the Soviets are experimenting with-
semiconductors, optical materials, and metal alloys-have military appli-
cations, materials for commercial purposes, such as pharmaceuticals, could
also be produced.
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Overall, the launch service market is the area in which the Soviets probably
will enjoy their greatest success during the next 10 years. Although
unlikely to be able to take scheduled customers away from the US shuttle
in the 1980s, the Soviets, by virtue of their long experience with expendable
launch vehicles, are in a good position to compete with ESA and private
US firms for a portion of the international launch service market that the
US shuttle cannot accommodate. Success in the expendable launcher field
could pave the way for broader Soviet efforts to make commercial use of
space in the 1990s, when the USSR's own space shuttle and its other space
programs with extensive economic applications mature.
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Carrt+t
Soviet Incentives and Disincentives To Compete
1
Leasing Communication Services
6
Manufacturing and Selling Communication Satellites
9
Remote Sensing
9
Soviet Prospects and Implications for US Interests
15
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Prospects for Soviet Commercial
Exploitation of Space Systems
and Related Services
Introduction
This paper assesses the prospects for Soviet commer-
cial exploitation of space systems and related services
during the next 10 years. It examines Moscow's
incentives and disincentives to compete for a share of
the international market for space systems and serv-
ices, reviews the available evidence on Soviet inten-
tions and capabilities, and estimates the probable
focus, extent, and success of Moscow's future efforts
to make commercial use of its space-related assets. F-
Soviet Incentives and Disincentives To Compete
Moscow has both financial and political incentives to
make commercial use of its space systems and capa-
bilities. Although there is great uncertainty about the
eventual size of the market for space-related services
and products, Western space and industry analysts
estimate that the manufacturing and launching of
communication satellites alone will yield billions of
dollars in revenues annually by the late 1980s. Cap-
turing a share of this market would provide the USSR
with an important supplement to its hard currency
earnings.
Moscow would also view participation in the market
for supplying launch services for Western communi-
cation satellites as an opportunity to acquire advanced
technology, particularly electronic systems. Soviet op-
erating procedures call for the mating of a satellite to
its launch vehicle and the performance of checkout
procedures to be carried out in a horizontal position
inside a building. During this period Soviet scientists,
engineers, and technicians would have an opportunity
to inspect Western communication satellites, particu-
larly if the agreement between Moscow and the
customer did not call for the presence of Western
engineers, technicians, or observers.
Moscow would probably also perceive activity in this
high-technology export trade as a foot in the door for
other Soviet high-technology products and might be
prepared to offer space-related services to Third
World countries on inexpensive terms to encourage
their purchase of other Soviet equipment or services.
In addition, the Soviets would view commercial ex-
ploitation of space as a means of increasing their
national prestige and influence.
Entry into the market, however, will require some
changes in Soviet operating procedures. At a mini-
mum, customers will need to know satellite capabili-
ties and launch vehicle reliability and will require
access to satellite assembly and checkout facilities,
launch sites, and support facilities. Even when in- 25X1
volved in joint space ventures, the Soviets have often
refused to provide information requested by the other
participating country. They have never released data
on the reliability of their launch vehicles or their
command and control systems and have generally not
maintained separate civilian and military space facili-
ties or allowed foreign access to military space com-
plexes.
Soviet Intentions and Capabilities
Notwithstanding these drawbacks, the Soviets have
indicated their intention to market space-based serv-
ices and are increasing their capabilities to do so.
Moscow's marketing efforts and its prospects for
success vary greatly with the type of space-related
service or product.
Launch Services. The US Government virtually mo-
nopolizes the current commercial satellite launch
market, using the Atlas-Centaur and the Delta ex-
pendable launch vehicles and the reusable shuttle
' Moscow has allowed limited access to previously denied areas by
selected Western officials, beginning with President Charles de
Gaulle in the late 1960s and including American, French, and
Swedish scientists and astronauts. Such access has been granted for
political reasons and to allow for Western participation in coopera-
tive programs. Indian space officials have also reportedly been
allowed to visit Soviet launch sites. In the 1970s, for the Apollo-
Soyuz project, the Soviets constructed a separate flight control
center and an addition to the booster and spacecraft assembly
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Figure 1
Soviet Publicity for Satellite Launch Service
LICENSINTORG
Panorama
No. 5 ? 1982
A quarterly publication
of V/O LICENSINTORG, Moscow, USSR.
Appears in English, Russian, Finnish, French, German and
Spanish.
All articles and illustrations in this issue may be freely repro-
duced. The Editors would appreciate a copy.
Cover Picture:
The achievements
of Soviet
scientists
and designers
in space research
are universally
known.
Licenstransmash
is ready to assist
foreign firms
in launching
their artificial
earth satellites
by Soviet
carrier rockets.
From a Soviet, foreign trade magazine disseminated in Western Europe
and the United States.
system. The Atlas-Centaur and Delta systems, how-
ever, are scheduled to be phased out by the US
Government by 1985, and US space and industrial
analysts estimate that the increasing demand for
commercial and government launch services will ex-
ceed what the shuttle can provide during the period
1986-94 by about 25 percent. In 1983 the US Govern-
ment decided to allow private US firms to continue
producing current expendable launchers and to rent
US launching pads. These firms, however, will need to
prove their capability to launch and position satellites
before large segments of the commercial market will
be willing to book launches with them. They also will
have to compete with at least one foreign organiza-
tion, the European Space Agency (ESA), that is
subsidized by the governments of the member states.
Commercial ;3huttle payloads also have the lowest
priority, behind military and other US Government
payloads. They could be bumped from scheduled
launches on short notice, and the current tight shuttle
schedule will make it difficult to accommodate re-
scheduling. Because the loss in revenue resulting from
such cancellations or delays would amount to millions
of dollars,' commercial firms are likely to schedule
alternate launch vehicles.
The shuttle's main Western competitor is the French
Ariane booster sponsored by ESA. Two of the seven
Arianes launched thus far, however, have failed to
reach orbit. Only in June 1983 did the Ariane deliver
its first commercial satellite into geosychronous orbit,
and the first fully successful commercial launch did
not occur until October 1983. Moreover, the fact that
one of the two satellites launched in June was dam-
aged by the Ariane booster during launching and
stranded in an orbit of limited usefulness will proba-
bly cause potential customers additional concern.' As
a result of its poor launch record, ESA has been
experiencing difficulties in marketing its launch vehi-
cles and could still lose some previously scheduled
launches.
Recent US press reports indicate that the Japanese
Space Development Council plans to develop a new
space launcher with a payload capability similar to
that of the US Titan III. This launcher eventually
could be used to compete with the United States and
other countries in the launch service market. The
Japanese already have expendable boosters based on
US technology that could enable them to provide
commercial customers with an alternative to the US
' Revenues for 2. Western commercial communication satellite can
amount to as much as $300 million per year. A one-month delay in
launching a satellite, therefore, could result in a loss of $25 million
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shuttle. An agreement exists between Japan and the
United States, however, that these boosters will not be
used for third-party launches without US permission.
accommodate any Western satellite regardless of
weight, and will be able to retrieve disabled satellites
for repair.
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Since 1980, there have been several indications that
the Soviet Union intends to use its Proton (SL-12/13)
launch vehicle to compete directly with the French
Ariane space vehicle and possibly with the US space
shuttle for launching civilian commercial communica-
tion satellites:
? In 1981 and again in 1983,
Ithe Soviets offered to
supply launch vehicles for INMARSAT satellites
during the period 1988-89 for $24 million per
launch. According to Western press reports, they
are offering the Proton launch vehicle as a booster
for the satellites and are offering to commit them-
selves to a replacement mission at one-half that fee
if a satellite is lost because of launch failure. They
also have apparently prepared a handbook of speci-
fications for potential users of the Proton.
? In mid-1982, Vladimir D. Shibaev, director of the
Soviet export-import firm for transport machine
building, reported in a journal article that his firm
had a new capability to provide satellite launch
services, indicated that his firm was "talking" with
ESA with hopes for positive results, and stated that
contacts had been made with other companies.
? Shibaev subsequently reported a Soviet commercial
agreement for launching an Indian remote-sensing
satellite in 1986, and an "arrangement" to launch
the ESA MAREC-C satellite. He expressed the
USSR's interest in a large number of orders for
launch services now and for the next 10 years. F_
intend to undercut Western prices, provide financing
with flexible terms and low interest rates with the
Soviet Bank for Foreign Trade, and guarantee short
delivery schedules for launch vehicles.
the Soviets will have a
multiple-satellite launch capability, will be able to
The Soviets have developed a family of space launch
vehicles that have proved to be highly reliable. They
currently have eight expendable vehicles with payload
capabilities for low-Earth orbit (185 kilometers) rang-
ing from 1,600 to 19,000 kilograms. The booster with
which the Soviets claim they will enter the market,
the SL-12/13 Proton, has maintained about a 90-
percent reliability rate over the past 10 years. It is the
largest operational Soviet space booster and has a 25X1
payload capacity about 65 percent as large as that of 25X1
the US shuttle (see figure 2) 25X1
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Figure 2
Payload Capabilities of Selected US, French,
and Soviet Launch Vehicles
Payload (kg)
(Low Earth orbit)
Payload (kg)
(Geostationary orbit)
Space
Transportation Delta 2914
Svstem
Atlas/
Centaur
94
ffi
(SL-12)
Proton
(SL-13)
Proton
? Retrieve satellites for repair or refurbishing, thereby
extending satellite service life and practically elimi-
nating unsuccessful payloads.
? Facilitate construction of refueling, repair, and or-
bital launch complexes."
Unclassified Soviet technical journals indicate that,
Moscow's program to develop a reusable space trans-
port system includes the development of a reusable
space tug. According to several Soviet authors, the
tug will be used to:
? Place satellites in their final orbit, thereby increas-
ing the shuttle's utility.
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Figure 3
Soviet and US Space Transportation Systems
Lift-off weight (kg)
1,700,000
2,026,000
Lift-off thrust (Ibs)
5,600,000
6,860,000
In-orbit weight(kg)
75,400
97,700
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The Soviets have plans for a permanent space station
for both military and civilian uses. One of its many
uses may be the refurbishing of satellites. Refurbish-
ing satellites at a space station would be more eco-
nomical than returning them to Earth, because a
smaller boost vehicle using less fuel is needed for
reboosts to operational orbit. Moreover, it may be
easier and faster to refurbish satellites at a space
station because this would eliminate transfers to
Earth and relaunch schedule problems. Servicing at a
space station would also free launch vehicles for other
missions.
As part of the effort to market launch services, the
Soviets may decide to separate commercial space
activities from their existing, largely military facilities
There are also two launch sites with two pads each for
the SL-12 Proton at the Tyuratam space launch
complex. Instead of building a new complex for
commercial launches, the Soviets could use one of
these sites and shield the other (military) site from the
view of visitors.'
The Soviets may also be willing to offer insurance to
non-Bloc countries using Soviet launch vehicles. In-
deed, their reported willingness to offer INMARSAT
a replacement mission at one half of the $24 million
launch fee if a satellite is lost because of launch
failure may indicate that such concerns are already
being considered in Soviet planning. The Soviet Union
owns three insurance companies in the West-one in
Vienna, one in Hamburg, and one in London-that
cover export credit risks as well as other risks for
Western firms engaged in trade with the USSR.
Reinsurance arrangements with major Western insur-
ance comparties permit the Soviet companies to un-
derwrite East-West trade risks without limitation as
to the amount of liability or length of credit maturi-
ties involved. Most West European banks provide
financing on the basis of guarantees provided by the
Soviet-owned insurance companies.
Leasing Communication Services. Since the late
1970s, the Soviet-sponsored INTERSPUTNIK
organization has begun to compete with the Interna-
tional Telecommunications Organization
(INTELSAT) in marketing international communica-
tion services in the Third World. INTERSPUTNIK,
which has primarily served the needs of Soviet Bloc
members (see figure 4), is smaller than INTELSAT,
which currently provides service to more than 120
countries. It has, however, attracted new users among
pro-Soviet Third World countries including Algeria,
Angola, Grenada, Iraq, Libya, and Nicaragua and
others are said to be interested or have been invited to
join. It has offered attractive financing and other
inducements to gain new users for its international
services. For example, in August 1982 Grenadian
Prime Minister Maurice Bishop announced that the
Soviet Union had offered a 3-percent loan to finance
Grenada's INTERSPUTNIK earth station. We also
believe its yearly fees for leasing communication
services may be well below those charged by
INTELSAT for similar services. Earlier, in 1979, the
earth station installed in Algeria to work with the
INTERSPUTNIK satellite system included mostly
Western equipment. The use of Western equipment
made the station more compact, efficient, easily
serviced, and reliable.
From a variety of open sources we know that at the
present time the Soviets have two types of geosta-
tionary satellites available for two-way civil and com-
mercial communications-the Raduga and Gorizont
systems. Another satellite communication system,
known as Luch, is currently being tested. Both opera-
tional types have communication transponders 6
6 A transponder is a device that receives a radio signal and
retransmits it to another point.
5 Western press reports indicate that Soviet officials have said that
the Proton for INMARSAT missions would be launched from the
facility at Tyuratam
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Figure 4
INTERSPUTNIK Members
This 1983 Novosti Press Agency map shows the 14 INTERSPUTNIK
members, some of which do not have operating ground stations,
and one nonmember user, Algeria. In addition, other Third World
nations are planning to use the system in the future; some have
ground stations under construction.
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Figure 5
Satellite Frequencies
aboard that operate in the 4 to 6 gigahertz or C-band
portion of the radiofrequency spectrum currently used
worldwide for satellite communications. (See figure 5
for a depiction of the frequency spectrum.) Commer-
cial satellite communication demands, however, are
expected to outpace the capacity of satellites using the
4 to 6 gigahertz frequency range. The Luch system
being tested by the Soviets operates with communica-
tion transponders in the 11 to 14 gigahertz or Ku-
band portion of the frequency spectrum. This frequen-
cy range can be used to help alleviate overcrowding of
the 4 to 6 gigahertz spectrum and is used for such
purposes by several Western nations.
Soviet requests to the International Frequency Regis-
tration Board (IFRB) for satellite positions and radio-
frequencies, plus open-source data, suggest that
Moscow is planning to have space platforms in geosta-
tionary positions with several communications sys-
tems on board using different frequency ranges. Some
of these systems will be dedicated solely to military
subscribers and others to civil uses. These systems will
enhance the Soviets' ability to provide commercial
services to a variety of non-Soviet civil users if they
choose to do so.
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The Soviets will probably provide the ground termi-
nals for their customers either by themselves or, as
they have done in two agreements since 1979, through
subcontracts to the Japanese. We know from Soviet
press reports that Japanese ground terminals have
been used in conjunction with the INTERSPUTNIK
station in service in Algeria. The terminals would be
the only hardware involved in the relay service trans-
Manufacturing and Selling Communication Satel-
lites. On the basis of surveys of aerospace industry
personnel, system operators, and likely customers, US
space and industry analysts estimate that (excluding
the requirements of Japan and of Soviet-aligned
nations) the total world demand for new and replace-
ment commercial communication satellites will be
more than 200 during the period 1983-95. This figure
could increase as new technologies and uses requiring
additional satellites are developed and introduced in
the late 1980s. For example, satellites will be needed
for direct broadcast, data transfer, banking, electronic
mail, and broadcasting in the microwave portion of
the radio spectrum. In addition to the Soviet and US
firms, companies in at least six Western countries and
Japan can manufacture communication satellites or
the associated ground stations.
The Soviet Union has a capability to produce satel-
lites for commercial sale and might, if it chooses to
use this capability, have an advantage over Western
competitors in marketing satellites in the Third
World. We believe they are probably less difficult to
manufacture and less expensive than Western ver-
sions, and may therefore be attractive to many Third
World nations. On the other hand, the lifetime of .
Soviet communications satellites has been about two
years; whereas the average for Western satellites is six
to seven years. To capture any market, the Soviets
would have to either increase the lifetime of their
communication satellites or price them low enough to
offset the increased costs incurred from frequent
replacements and the accompanying launch feesF-
Entry into the commercial spacecraft production mar-
ket would entail selling the command and control and
telemetry systems as well as satellites and ground
stations. Moscow, however, probably considers access
to the command and control systems sensitive. Thus,
if the Soviets decide to produce satellites for sale
abroad, they will also have to develop a new command
and control system as part of the package.
Remote Sensing. Both industrial and developing
countries are looking to data collected by remote-
sensing satellites to locate mineral and energy re-
sources, to identify potential problems in such areas as
agriculture and forestry management, for land use
studies, and for cartographic work. The export of
remote-sensing data or associated equipment and
services is currently not a financially profitable busi-
ness. The market for the data, however, is potentially
huge and is growing because of an international
awareness of the need to better manage resources.? 125X1
Thus far, the US Landsat program has provided most
of the remote-sensing data to consumers. There are
currently 13 stations throughout the world receiving
data from the US system. Customers can either buy
data in the form of a picture or a tape or own a
ground receiving station and pay a fee to the US
Government for access to all imagery taken within
line of sight of the station. Countries concerned about
timeliness and possibly about national autonomy and
industrial espionage are leaning toward national own-
ership of ground receiving stations. Industry analysts
believe that the most lucrative remote-sensing market
will be for data that have been computer processed
and analyzed to provide particular information tai-
lored to the needs of users such as oil companies and
agriculture firms. The US commitment to maintain
an operational system and to provide the data to both
domestic and foreign users, however, does not extend
beyond the mid-1980s.
French and Japanese programs, scheduled for comple-
tion in the later 1980s, will meet some of the need for
remote-sensing services. Even though the first French
remote-sensing satellite will not be launched until
January 1985 at the earliest, the commercial( organi-
zation of the French system, Spot-Image, is already 25X1
aggressively marketing ground system hardware and
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Space segment Multispectral scanner;b thematic mapper;c record
and playback capability.
a This is the USSR's developmental system. Capabilities listed are
those for a system that could be operational in the middle-to-late
1980s.
b A multispectral scanner uses a mirror to scan the scene on the
ground and reflect the light onto a series of photoelectric cells
sensitive to different spectral regions.
High-, medium-, and low-resolu-
tion electro-optical multispectral
scanners.b
Worldwide in 1990s with use of
data-relay satellite and a record
and playback capability.
Near-real time.
30- to 1,000-meter pictured
element size.
30 to 1,900 km, depending on
resolution.d
The thematic mapper is a remote sensor with seven spectral bands
covering the visible, near-infrared, and thermal infrared portions of
the spectrum.
d Demonstrated to date.
data processing equipment compatible with both Spot
and Landsat-4. The French have reportedly sold
equipment to at least three nations and are talking
with additional countries that already own Landsat
receiving stations. Canada is also developing a radar-
imaging remote-sensing system, but it is not expected
to become operational until the early 1990s.
In 1977, at a session of the UN Committee on the
Peaceful Uses of Outer Space, the Soviet Union
officially offered to provide photographic services and
data from outer space to other countries and claimed
that photographs taken with up-to-date equipment on
board Soviet spaceships would satisfy the most exact-
ing customers. A member of the Soviet delegation
subsequently explained that to obtain such data the
requester would have to pay an unspecified charge
and allow Soviet personnel to assist in mapping the
data.
Since 1977, the Soviets have given no public indica-
tion that they intend to develop either a cooperative or
a commercial market for remote-sensing data. We
believe they may be waiting until they have an
operational remote-sensing system competitive with
the US Landsat or the soon-to-be-operational French
Spot system.
the
Soviet Union has been actively pursuing the develop-
ment of a space-based land remote-sensing capability
since the mid-1970s. The Soviets currently have one
fully operational satellite system dedicated to land
remote-sensing and another system that is still in the
developmental stage. Technical analysis indicates that
the operational system, the Earth Resources Photo-
graphic (ERPHO) satellite, is a military-operated
system that is used to gather economic data including
surveillance of Soviet crops. Its data, however, are not
timely, because it is a film system that can only return
film in capsules at the end of a mission that normally
lasts 13 days. Its data are not disseminated outside
the Soviet Union, and it is not even referred to in
Soviet remote-sensing literature. The developmental
system, the Meteor-Priroda, is dedicated to civil land
remote sensing. When fully operational it will be
similar in many respects to the US Landsat (see
table). The Soviets are expected to launch the first
fully operational Meteor-Priroda satellite in 1985.
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According to Soviet technical journals and Soviet
information submitted to the Second UN Conference
on the Exploration and Peaceful Uses of Outer Space
in 1982, the Meteor-Priroda satellite will carry both
high-resolution and medium-resolution multispectral
scanners. Its data will be transmitted in real time to
three existing ground stations (see figure 6) and will
be processed, recorded, and disseminated at addition-
al centers. These descriptions and current Soviet
practices suggest that, even when Meteor-Priroda is
fully operational, the Soviets probably will have prob-
lems with processing and dissemination of the data
and will need to expand their current processing
capabilities, including computer hardware and soft-
ware. Through the 1980s they will continue to have
limitations in geographic coverage because they do
not have a data-relay system. The satellite now can
collect and transmit data only when it is within
reception range of one of the three ground terminals.
We expect the system to be upgraded by the 1990s to
allow greater data-handling capability, larger
amounts of timely imagery, and, with the use of a
Soviet data-relay satellite system, near-real-time cov-
erage of all areas of the world except North and
South America. If a record and playback capability is
added to the system, these areas could also be covered
to a limited extend
There are indications that Moscow's development of
remote-sensing equipment and techniques will be a
Soviet-led Council for Mutual Economic Assistance
(CEMA) venture. For example, a March 1983 Eco-
nomic Gazette article describes CEMA efforts to
develop the technical equipment for the space seg-
ment of a remote-sensing system and for the process-
ing, copying, and use of the data. The East Germans
and Bulgarians have developed multispectral scanners
which have been flown on developmental remote-
sensing satellites. The East Germans are already
marketing image-processing equipment and probably
could not have made the decision to do so without
Soviet agreement.
The Soviet Union is a strong supporter of regulating
the dissemination of remote-sensing data, largely
because of its concern over the military significance of
the data' for countries that do not have a photorecon-
naissance capability and because of the adverse ef-
fects release of such data could have on world markets
for agricultural, energy, and other products (figure 7
illustrates the coverage of Soviet territory that is
possible from Landsat ground stations in countries
surrounding the USSR). These concerns are reflected
in Soviet negotiating positions at the UN Committee
on the Peaceful Uses of Outer Space 8 and in the
Soviets' handling of remote-sensing data from their
program.
Moscow has proposed several formulas to control
dissemination at the UN Committee on the Peaceful
Uses of Outer Space where principles to regulate
remote-sensing systems are being negotiated. One
Soviet proposal would require the consent of the
target state for the release of unanalyzed, unprocessed
data that come directly from the satellite to third
countries. Another would classify the data as global,
regional, and local and would permit the release of
only global and regional data without consent. A third
proposal would limit dissemination of data without
prior consent to that with a resolution no better than
50 meters.
Moscow's policy of restricting access to remote-sens-
ing data could be both a handicap and an aid to any
future Soviet marketing efforts. Customers interested
in using remote-sensing data for management of
renewable resources will need current data. If a Soviet
proposal requiring prior consent is adopted, it could
result in long delays in satisfying customer requests,
particularly if targeted states are allowed to review
data prior to release to a third party. Controls over
dissemination of data, however, will continue to ap-
peal to those Third World countries that are con-
cerned about exploitation of their natural resources by
' A recent illustration of the type of information available and the
intelligence value of remote-sensing data appeared in the 21 March
1983 Aviation Week. US Landsat-4 imagery with a resolution of
about 40 meters shows new construction at the Soviet Union's
Tyuratam Missile Test Range, including a runway comparable
size to the US space shuttle runway at Kennedy Soace Center.
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Figure 6
Soviet Receiving Stations for Remote Sensing Satellites
Rings represent the approximate ground coverage that each ground station could receive in direct
transmission from Meteor-Priroda satellites. Radius of each ring is 2,700 kilometers.
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Figure 7
Select Landsat Ground Stations
Rings represent the approximate ground coverage that each ground station could receive
in direct transmission from the satellite. Radius of each ring is 3,000 kilometers.
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the industrialized nations and multinational corpora-
tions and about the possible release of strategic
information to hostile neighbors.
Materials Processing. Experiments show that the
zero gravity of the space environment facilitates the
manufacture of high-value, low-volume products that
are difficult or impossible to produce on Earth. Mol-
ten metals and glasses, solutions, and gases that are
impossible to mix on Earth can be combined in space
to produce new materials. Materials also can be
melted in a weightless environment with less risk of
contamination by contact with a crucible or container.
The products that look most promising are pharma-
ceuticals, electronic devices, optical-sensing equip-
ment, and metal alloys. Many of these products will
have important military as well as commercial appli-
cations. Until permanent manufacturing facilities
that can produce materials of sufficient quantity are
established in space, however, an accurate estimate of
the potential capability cannot be made.
The United States, France, West Germany, and
Japan are looking at the feasibility of space manufac-
turing. In the United States, private firms have plans
for manufacturing pharmaceuticals on board the
shuttle by 1985, but the US Government has no
current plans for a permanent space processing facili-
ty for the remainder of the decade. The Europeans are
committing considerable resources to their projects.
Still, although some West European materials proc-
essing experiments have been conducted, extensive
experimenting will not begin until the ESA-built
Spacelab is orbited for a week of experimenting in the
fourth quarter of 1983. In Japan, space manufactur-
ing has been made a national priority, but the
Japanese have no current capabilites for permanent
facilities. They do, however, plan to conduct extensive
experiments on upcoming Spacelab missions.
The Soviet Union has experience in processing mate-
rials in space that could be translated into an advan-
tage over potential competitors should it decide to
commercialize its space-processed products. In terms
of the numbers and types of experiments, the Soviet
effort in materials processing is outpacing that of the
West and is more extensive than that planned for
early shuttle work. The Soviets have experimented
with more materials than the West; most of their
work has deals: with substances that have significant
applications; and their studies appear to have been
carefully planned and well thought out.
We know, for example, from Soviet technical articles,
that the USSR's space-based experiments in semicon-
ductors have included at least 12 different combina-
tions of elements, all of which could have applications
in both civil and military technology for electronic
components, radiation detectors, and solar cells. The
Soviets have also conducted experiments with several
different superconductor combinations. In the field of
metal alloys, the Soviets seem to be concentrating on
strong, lightweight materials that could have applica-
tions in the construction of aircraft and spacecraft.
They are experimenting with fiber optics and attempt-
ing to produce: glass fibers without impurities and
irregularities for use in laser communication systems.
Other experiments have been aimed at producing
large crystals from fragile materials that are difficult
to grow on Earth and would have numerous applica-
tions.
The USSR's most extensive experiments in space-
based materials processing have been conducted on
board the Salyut 6 and 7 space stations. The Soviet
press has claimed:
? Such experiments will lead to the creation of space-
based manufacturing facilities to produce pharma-
ceuticals, semiconductors, alloys, and special glasses
for use in the electronics, machine-building, con-
struction, and consumer goods industries.
? The amounts of certain materials produced on
board Salyut 6 have already equaled the production
of these materials by several facilities on Earth.
? The USSR is now bridging the gap between experi-
menting in orbit and actual production.
? In 20 to 25 years the marketing of goods produced
in space "shops" of orbital stations "will yield an
income of about $50 billion."
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Soviet space officials indicate that they are now ready
to move beyond the research and development phase
of materials processing in space. A likely step would
be to include a special materials processing module as
part of a modular space station (see figure 8). The
docking of Cosmos 1443 to Salyut 7 in early 1983 was
a step in this direction. A Pravda article of 2 July
1983 stated that Cosmos 1443 is, among other things,
a prototype of units to house space-based laboratories.
Although most of the products they are experimenting
with have important military applications, the Soviets
evidently also plan to produce for their civilian econo-
my and could also produce materials for export.
Soviet press articles and interviews with officials
associated with the programs, however, have given no
hint of Soviet intentions to market the space-
processed products outside the USSR, except possibly
in Soviet Bloc countries. Still, Moscow might view
production and sale of even small amounts of new and
unique products manufactured in space as an impor-
tant means of increasing its national prestige.
Soviet Prospects and Implications for US Interests
During the next 10 years, the Soviets probably will
continue to focus their involvement in the commer-
cialization of space on the sale of launch services. In
the near term-that is, for three or four years-they
are likely to step up their efforts to obtain commercial
contracts for the Proton launch vehicle. F_
Prospects for the Soviets succeeding in introducing
the Proton vehicle to the commercial market have
been enhanced by INMARSAT's decision to include
the Proton on its list of candidate launch vehicles
that could be used to orbit its second-generation
maritime communication satellites beginning in 1988.
INMARSAT also intends to require the manufactur-
ers bidding to build its second-generation satellites:
? To make their satellite design compatible with more
than one of the six potential launch vehicles.
? To select the US shuttle, the Ariane, or the Proton
as one of the primary launch vehicles.
? To add the fee for the selected launch vehicle to the
price of the satellite when considering the proposals
for the INMARSAT contract-a requirement that
could benefit the presumably less expensive Soviet
launch vehicle.
Soviet prospects for entry into the launch service
market in the near term would be enhanced by the US
shuttle's inability to meet the anticipated worldwide
demand for launch services, delays in scheduled US
shuttle launches, another Ariane launch failure, and
any difficulty experienced by the new US private
launch firms in demonstrating their capability with
the expendable US launchers. Moreover, Moscow's
willingness to subsidize its launch service will make its
fees more competitive than those that the US private
firms will need to charge.
Success in obtaining commercial contracts for the
Proton launcher will enhance Soviet prospects for
competing for a share of the market targeted by the
US shuttle when Moscow's own shuttle becomes
operational during the period 1990-91. Successful
development of the Soviet space tug with capabilities
to retrieve satellites for repair and refurbishing would
also increase the attractiveness of a Soviet contract.
Moscow, nevertheless, will probably experience diffi-
culty in obtaining contracts to launch US communica-
tion satellites that have been produced for Third
World nations, because US firms will not want to
transfer sophisticated satellite technology to the
USSR.
We also expect the Soviets to step up efforts to lease
communications services both through the
INTERSPUTNIK organization and to individual
nonmember countries. Moscow has communication
' The other INMARSAT designated launch vehicles are the US
shuttle, Atlas-Centaur, Delta, Titan, and the ESA Ariane.F_
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Figure 8
Soviet Concept for Modular Space Station
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circuits available now for lease and apparently plans
such use for some of its future communication satel-
lites. It has filed with the IFRB for 16 geostationary
positions for satellites using the 4 to 6 gigahertz
frequency band and has filled only eight of the
positions. Four of the remaining eight unfilled
positions have the designation "for international coop-
eration," which was attached to at least one other
Soviet satellite currently used for INTERSPUTNIK
traffic, the US-USSR hotline, and worldwide trans-
mission of the 1980 Moscow Olympics. At the
INTERSPUTNIK council meeting in November
1982 held in Sofia, Bulgaria, expansion plans were
discussed and a protocol was accepted that provides
for transition to commercial exploitation of the space
communication system.
We believe the Soviets may be already undercutting
INTELSAT's fees for communication services by a
considerable amount-a practice that may enable
them to acquire some customers who might otherwise
use INTELSAT. Moreover, INTELSAT's fees could
rise if it loses customers to competing regional and
national systems, making the Soviet offer attractive to
even more Third World nations that are seeking
domestic communications services
Largely because Soviet satellites currently have
shorter service lives and use less advanced technology
than Western equipment, Moscow is unlikely to try to
compete with the West in selling communication
satellites or high-technology satellite communication
applications. If Western manufacturers are unwilling
to supply less complex satellites to Third World
nations, however, the USSR might eventually enter
the market with communication satellites designed to
meet those nations' domestic communication needs.
At present, the Soviet Union is not competitive in
supplying remote-sensing data, and we do not expect
it to be so in the near term. Moreover, it is possible
that the only profitable market to develop will be for
value-added computer-processed data," an area in
10 Value-added products are those derived from standard remote-
sensing data that have been manipulated by computers and/or
interpreted in various ways to provide information tailored to the
needs of the particular user about the surface of the Earth.
which the Soviet Union is not expected to become
competitive for some time. Moscow may view its
remote-sensing data as a political tool or a means of
enhancing-at little or no cost-the attractiveness of
other Soviet products and supply remote-sensing data
to nations in the Third World where it has political,
strategic, or economic interests.
Notwithstanding Soviet press claims that the USSR is
already moving beyond the R&D stage in space-based
materials processing, Moscow is almost certainly not
about to launch a major effort to market materials
produced in space to foreign organizations and firms
in the next few years. Instead, Soviet defense indus-
tries and other domestic consumers will continue to
have priority claim on these products. Moscow might,
however, attempt to make use of its materials process-
ing effort as a means of enhancing its image as a
supplier of space-related products and services or
other high-technology output. Similarly, as in the case
of remote-sensing data, the Soviets might be willing to
provide at least some materials processed in space-
for example, in quantities sufficient for research
purposes-to their clients in "package deals" that
would be contingent upon the purchase of other Soviet
equipment. The Soviets might also make some limited
efforts to market materials produced in space in an
effort to determine the demand for such goods. F_
Overall, the launch service market is the area in
which the Soviets probably will enjoy their greatest
success during the'next 10 years. Although unlikely to
be able to take scheduled customers away from the
US shuttle in the 1980s, the Soviets, by virtue of their
long experience with expendable launch vehicles, are
in a good position to compete with ESA and private
US firms in capturing a portion of the international
launch service market that the US shuttle cannot
accommodate. Success in the expendable launcher
field could pave the way for broader Soviet efforts to
make commercial use of space in the 1990s, when
Moscow's own space shuttle and its other space
programs with extensive economic applications ma-
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