SOVIET EFFORTS TO ENTER THE COMMERCIAL LAUNCH-SERVICES MARKET

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89T01451R000200150001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 26
• Document Creation Date: December 27, 2016
• Document Release Date: March 1, 2013
• Sequence Number: 1
• Publication Date: April 1, 1988
• Content Type: REPORT

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Directorate of ' ` Secret
Intelligence _ ~ ~' 25X1
Soviet Efforts To Enter
the Commercial
Launch-Services Market
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SOV 88-100! 6X
April 1988
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~t"~"r'~ Directorate of ~ ~ Secret
'G. 7..x..11:.......... ~
Soviet Efforts To Enter
the Commercial
Launch-Services Market
Office of Global Issues.
Comments and queries are welcome and may be
directed to the Chief, Strategic Policy Division[
~or the Chief, Economic Performance
Secret
SOV 88-10016X
Apri11988
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Soviet Efforts To Enter
the Commercial
Launch-Services Market
Key Judgments The Challenger accident and a rash of other Western launch failures in the
/rt(ormation available period 1985-87 have seemingly handed Moscow a window of opportunity to
as oIl April /988 break into the commercial space launch-services market. Moving aggres-
was used in this report.
sively to press its advantage, the USSR has embarked on a sophisticated-
by Soviet standards-marketing campaign to woo Western customers.
Moscow has backstopped its sales drive with an exceptionally strong launch
package, emphasizing the reliability, frequency, safety, and low price of its
services. Specifically, the Soviets claim they can support 10 commercial
Proton launches per year and that a launch could be arranged within 18 to
24 months after a contract is signed. Moscow is pricing its launches at less
than one-half the rates charged by Western competitors and is offering
insurance.
The grounding of the US shuttle and the inability of other Western vendors
to shake off problems have left a backlog of some 75 satellites-with a
launch price tag of about $7 billion-potentially available for launch by
the USSR. Over four-fifths of these, however, already have launch
contracts or reservations with at least one non-Soviet launch service. We
estimate 13 payloads-mostly for US customers-do not have a launch
contract with any vendor at present. The Soviets publicly announced in late
1987 that they have signed three commercial contracts with Western firms,
but they have not revealed the names of their clients.
We believe that Moscow, despite its aggressive sales pitch, is likely to
generate no more than one or two hard currency launches in the next five
years. Contracts would probably come from Third World countries or from
a financially strapped company and might be part of a deal to deliver an
operating satellite in space. The probability of a Soviet launch for the
United States or a West European country seems slim as long as the
Western technology embargo holds. If, however, Western launch services
continue to have difficulties or are plagued by new problems, the outlook
for the USSR to gain a foothold could improve. Indeed, the longer the
launch crisis persists, the better the Soviet chances are to break down
Western technology-transfer barriers. Moscow, too, has recently suffered a
series of launch failures, and, if such problems continue, its chances of
acquiring a Western launch contract would diminish.
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SOV 88-! 0016X
Apri 1 1988
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Secret
Although no ally has yet broken ranks with the United States on the
technology-transfer issue, the Soviets are mounting afull-court press to
erode the influence of the Coordinating Committee for Multilateral Export
Controls (COCOM) controls. Moscow is confident that just one contract
with a Western firm would help it gain a foothold in the market. To this
end, the Soviets are:
? Feeding the debate within COCOM by arguing that the USSR is only a
transshipment point on the route to space and that satellites delivered to
Moscow would be temporary exports and, therefore, exempt from
existing restrictions.
? Offering to streamline launch procedures and minimize the time a
satellite would actually be in the USSR.
? Poising to exploit West European exports of indigenously built satellites
to the Third World
The recent decision by the United States to allow a US firm to fly a
microgravity experiment aboard the USSR's Mir space station is being
viewed by some in the West as the first crack in the dike against barriers to
Soviet launches of Western payloads. The decision has bolstered critics of
US policy who are seeking a precedent to send their satellites into space on
Soviet vehicles. More than ever a continued inflexible US approach to
commercial launches by Moscow could spawn greater opposition by West
European and US businessmen. The longer the launch crisis persists, the
more any opposition would be likely to intensify
If the current Soviet bid to enter the launch-services market proves
unsuccessful over the next several years, it is unlikely to spell the end of So-
viet efforts. Moscow is clearly taking along-term approach, hoping that
other opportunities will open. The benefit of their steady approach to space
development has probably convinced the Soviets that their commercial
forays will bear fruit over the long haul.
Moreover, because of their extensive domestic launch schedule, the
Soviets are in a stronger position than their competitors to weather an
expected downturn in demand-the result of saturation in the cable
television market, developments in fiber-optic communications, and unused
capacity on existing satellites-and could more quickly gear up for any
recovery in the launch-services market later in the 1990s.
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Setting the Stage
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Scope Note
This paper examines Moscow's current efforts to win Western customers
and its prospects for success. Special attention is given to the Soviet launch
package, the obstacles in Moscow's path, and implications for the United
vii Secret
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Figure 1
Milestones in the Commercial Launch Market
1988
April
December
January
March
May
July
August
September
October
January
April
May
I~cbruary
April
July
August
September
October
January
1=ebruary
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~.A~an~ ~I~ .Ia~tn~ix ?ar#t~i<
?~h:~Iienger acciclen.
~ ~eet~rr~. ~'i3ti~t ltau:i~ela ~iltiz~:
+l l~e[~ launch fali~re.
~ Ari~ne-II lacrncli lallur~.
? Presiderttlal dt?cree remcrv~s slitatil~ frortt> txi~st et~mereial
business.
~ Proton: launch [:~ilure {se~t~ad~stag~ mal~E3~~ti~n):
-Souiets niak~ elemarehe tv tl2e IJniEecl States un the US
policy banning the expari of s}~aeeer~ft tea the Soviet t.lnlan
for l~iinch,
Proton launch failure (?o~rEh-stage ti~a~lfuncfio~n)>-
+-Titan. resumes launt;h operations.
~ I'rot~in launch failure (fourth-stage malfunctlort).
+Atl.as Centaur Paunch failure.
~ China launches first commercial payload for E'rance; Martin
Marietta signs contract with Intelsat to [auoch fwv
communications satellites in 1989-9fl.
~ Arianespaee resumes Paunch services.
~ Second Successful Titan launch, Soviet seminar for
prospective customers at Paris Air Show.
~ t1S businessmen visit I3aykonyr Space Censer; Inmarsat
reopens bids.
t West German firr3l signs contract with Gla