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Ahmad Sabirin Arshad, PhD

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1 Ahmad Sabirin Arshad, PhD
Malaysia’s Evolution to the Next Phase of Sustainable Space Development Presentation Ahmad Sabirin Arshad, PhD

2 Table of Contents Introduction
Financial Evolution of the Space Industry Factors Influencing the Commercialisation of Remote Sensing Way Forward

3 Introduction

4 Scope of ATSB® ATSB® main current activities in the upstream and spin-off space technologies

5 ATSB® Milestones 2001 2000 2008 Near Future & Beyond 2009 2011
RazakSAT-2 & other small satellites 2009 RazakSAT® world 1st remote sensing satellite launched into the Near Equatorial Orbit (NeqO) 2001 MACSAT(now known as RazakSAT®) was announced as Malaysia’s next satellite to be launched 2000 TiungSAT-1 was launched Malaysia’s first satellite 2008 Malaysian Cabinet approved COMMSAT 2011 CubeSAT & InnoSAT to be launched

6 Malaysian Involvement in Space Development
Malaysia is a producer of space technology but needs to continue to develop its technological competitiveness and commercialisation implementation Development so far is focused on Remote Sensing Satellites Factors complicating development and implementation Indigenous subcomponent manufacturing is still complicated due to a lack of depth in the underlying local industry R&D takes a long time to complete, things out of expectations can and will occur The pioneering spirit needs to be further nurtured in Malaysia as it is still difficult to accept calculated risk Despite these problems, technology Development of Space Technology in Malaysia has been successful

7 Financial Evolution of the Space Industry

8 Comparative of Remote Sensing Revenue vs Communications
Interesting conclusions can be derived by comparing Space Revenues from Space Remote Sensing and Communications Comparative of Value of Studies State of The Space Industry, 2005 Prepared for International Space Business Council by Futron Corporation State of the Satellite Industry Report,2010 Sponsored by Satellite Industry Association prepared by Futron Corporation

9 Year 2004 2005 2006 2007 2008 2009 Forecast 37,288.00 43,004.90 49,139.70 55,114.10 59,243.20 64,958.90 Revenue 35,800.00 41,300.00 48,900.00 57,900.00 68,100.00 75,300.00

10 Year 2004 2005 2006 2007 2008 2009 Forecast 583.1 653.0 739.0 798.8 859.6 953.3 Revenue 400.0 500.0 700.0 1,000.0

11 Inference of Comparative Analysis
The Forecast and Revenue of the Communications Satellite Market growth matches to a far better degree than that of the Remote Sensing Market This can be inferred that the reactions of the Communications Market is more predictable Why is this?

12 Competitive Study on Remote Sensing Business - Partial or Comprehensive
Many of the researches in the Space Borne services area have focused on: Technical, scientific and policy issues The development/public-private funding and social benefits Very few studies have been conducted on the marketing/business aspects of the fast developing and advanced technology based business of Spaceborne Remote Sensing The other class of literature on the remote sensing market potential is the survey reports by global consultancy firms which list out the projected market potential quantities but focus very less on the factors contributing and the methodology adopted.

13 Remote sensing: Pseudo vs Real
Remote Sensing markets are less predictable than Communications market because the demand is “pseudo” ie dependent on governmental changing requirements (for example war) Also, sales of remote sensing images for decorative art is a real but insignificant market. Remote sensing products are likely to sustain themselves in commercial markets only to the extent they improve the productivity of customers e.g. by cost avoidance or increase revenues through demand or consumer driven

14 Factors Influencing the Commercialisation of Remote Sensing

15 Remote sensing: External factors (macro)
Political Restriction due to security concern Socio cultural Changes of the future requirement may have adverse effect on the market Technological New technological advancement lead to under utilised of data collected /archive - cost Environment Recent development in climate changes lead to delay in response time Factors that require market to evolve

16 Politics vs Technology
Champion in Technology Tools for decision making Effectiveness of technology improving society wellbeing Budget Relevant Adding value Making changes Champion in Politics Political systems on effectiveness improving society

17 Major obstacle: Financial Challenges
To survive in the future, development of economically sustainable space remote sensing programmes is necessary: Remote Sensing is considered a luxury in a recession Space Development is still very capital Intensive Business Case for Remote Sensing generally still unproven but must move away from subsidies Long time for Return of Investment Different types of capital come with different levels of return on investment (ROI) requirements, depending on their tolerance for risk. A potential investor is interested in managing his total risk exposure through the life of a project, not just at a particular stage

18 Barriers to Commercial Investment
The high cost of entry requires several rounds of large financing. Contradictorily Equity although can provide high value are classified as risks Investors are reluctant to provide loans without cash flow or other collateral to secure them Finally, as the investment matures, loans become easier to get and equity becomes more appealing. Given that most remote sensing revenues are derived from value-added products, not the raw data, commercial remote sensing firms have a strong interest in exploring vertical integration and strategic partnerships whereby the lower returns from providing data need to be counterbalanced by higher returns from value-added products.

19 Final Thoughts

20 Final Say The path to development is not easy nor straightforward. Technological Challenges are always there For developing Nations, the survivability of space programmes can be called into question by just a few failures despite large successes Presently to create a sustainable economic space programme is key Developed Nations have different space economic ecosystems Multipart tariffs consideration to ensure sustainable growth Financial Challenges are a concern for emerging space countries and can be the kiss of death that require continuous support from the government Joint Collaboration Development between Developing Nations Indigenously Developed Technology can be incorporated to programmes increasing partners local content contribution Partners also help programme validation by contribute financially Supported by Public Finance Investment leveraging political & social recognition with the mission beneficial to the people

21 Thank You

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