The Economics of the Satellite Launch Industry

Abstract We explore economic aspects of the satellite launch industry, focusing on the crucial role of launch cost reductions in shaping long-run satellite industry trends. The market structure of the international launch industry was a stable duopoly (United States and Soviet Union) prior to the 1990s, an oligopoly dominated by the United States, Russia, the EU, and China, from 1995 to 2018, and by a dominant firm (SpaceX, United States) with a competitive fringe after 2018. Recent trends in the industry show a rapid growth in the number of launches, increased launch frequency, and greater international participation. Key economic factors contributing to the changes in the industry have been launch cost reductions, growth of commercial launches, and the emergence of mega-constellations of satellites. Further research is needed in this emerging field of economics to fully understand the economic forces shaping the future of satellite launches and space commerce.