OHB began pursuing the NewSpace approach more than 20 years ago. It had its big breakthrough with the concept of building satellites for constellations in a significantly smaller size. Dr Fritz Merkle, member of the Management Board of OHB SE from 2014 to 2018, explains in an interview with OHB Head of Communications Günther Hörbst where the company has come from and where it is heading.
NewSpace is all the rage. So where does that put ‘Old Space’ and where does OHB stand in relation to both?
Fritz Merkle: NewSpace emerged in recent years without there ever having been an ‘Old Space’ as such. But the idea behind NewSpace is a very applications-driven one. Indeed, this is the exact approach that OHB took 30 years ago when it developed satellites for specific applications. In that respect, OHB was embracing the principle of today’s NewSpace during the days of ‘Old Space’.
To go one step further: how does a company like OHB preserve and retain the old while embarking on the new?
This is the challenge we’re facing. OHB promoted the NewSpace principle more than 20 years ago by building much smaller satellites to form constellations. This presents a challenge for traditional satellites, especially for the large institutional satellites in communications, telecommunications and navigation. New technologies and materials are being developed for these smaller microsatellites. Naturally, this has an enormous impact on the traditional satellites.
Space technology is becoming increasingly commercial. But OHB’s core business is still heavily reliant on institutional contracts. How can the company continue to benefit from both the old institutional and the new commercial?
Space technology originated as an institutional business, funded essentially out of tax revenues. However, applications gave rise to technologies that are used in everyday life. For example, there has been a huge shift in the world of communication. Therein lies the major challenge for OHB in the coming years. We have to play a bigger role in this shift towards the commercial. Currently, institutional contracts make up around 75 percent of our order volume. We will see a shift in this and OHB will work towards benefiting from this trend.
What are OHB’s main objectives in this area?
We are looking closely at small satellites, which will complement and augment our large satellites in terms of concept. Since it is better to work on small satellites in smaller working groups, this is our objective mainly in the subsidiaries in Luxembourg, Sweden and Italy.
What role do the large programmes play in this strategy?
They are the heart of satellite infrastructure; their purpose is the reliable provision of time signals, navigation signals and images. There is no room for compromise here. The provision of everything within the sovereign remit must be reliable and, above all, safe and secure. NewSpace principles are slightly more difficult to implement in this respect. However, they complement these core elements in the areas of observation, communication and navigation.
How quickly does OHB intend to integrate the principles of NewSpace into the corporate strategy and, above all, use them as a business model?
We have decided to step up our activities in the services sector. We already offer satellite operation services and satellite launch services. However, we have not regarded them as a separate line of business. As space business becomes more commercial and privatised, we will operate these ser- vices as a separate line to generate growth. To provide these services we do not have to launch satellites of our own, rather we aim to offer such services to the space community. To this end, we recently founded OHB Satellitenbetrieb GmbH.
Is this partly due to the fact that, these days, one has to talk about space technology in the context of its benefit to humans, for which ser- vices need to be provided?
Exactly. Historically, space flight grew out of the conflict between the East and the West. It was a demonstration of power. Development in the arena of communication was born of the need for defence, then it was commercialised and nowadays there are satellite dishes on every house, which receive radio and television signals from space. It has become an indispensable part of the infrastructure of our communication society. The same goes for navigation, which was originally purely for military purposes. Today, civilian uses are the driver behind navigation systems. All of these are now inextricable from the modern economy.
Does OHB believe the public is sufficiently aware of how vital space applications has become in our daily lives?
The general public definitely is not. Space technology is still viewed as something that we can basically do without. It’s fine when there’s enough money for it, otherwise not. People still have an image in their heads of travelling to distant planets. Compromise in this sector, which satisfies human curiosity through exploration, is possible in times when money is tight. But when it comes to infrastructure that is necessary for our daily lives to function, satellite technology is in- dispensable. Such areas include Earth observation, navigation, communication and time synchronisation in the global financial system.
To what extent do Elon Musk’s activities help?
I think what he’s doing is a good thing. One effect he is having is to challenge an industry whose clients are mainly publicly funded to become much more cost-effective. In that respect, the way he goes about his business puts pressure on others but is an attractive prospect at the same time. The pressure is there nonetheless, however: on the competitors and on the public contracting authorities.
In the US you have Elon Musk and Jeff Bezos; in the UK you have Richard Branson. Why are there no astropreneurs in Germany?
Musk and Bezos are really children of Silicon Valley: they grew up with the Internet which in turn made them rich. Branson is from England. He entered the sector through his airline. His idea is to make it possible for anybody to fly to space. Greg Wyler at OneWeb is also taking the Silicon Valley approach, which requires an environment of start-ups, investors willing to take risks and research institutions. This combination is the ideal breeding ground for the principles of NewSpace. No one knows how long it will last but even in the US this mindset is not universal. It tends to be concentrated in California.
So, it will remain a Silicon Valley movement for a while yet. Do you think there will ever be a more commercial, billionaire-led space flight endeavour in Europe?
I’m sure it will emerge in some form in Europe. It would be wrong to copy the Californian model to Europe. The circumstances and mentalities are different here. We have to see what can be taken and look creatively at what we can do to find our own solutions.
Dr. Fritz Merkle, born in 1950, has been a member of the management board of OHB SE from 2014 to June 2018 and a member of the management board of OHB System AG from 2006 to June 2018. Dr. Merkle holds a doctorate in physics from the University of Heidelberg. From 1993-2000 he was vice-president of Carl Zeiss Oberkochen and Carl Zeiss Jena GmbH. He was also a member of the executive board of the Carl Zeiss Group. Dr. Merkle is a member of the Senate of the German Aerospace Center DLR and board member of the Max Planck and Fraunhofer Institutes.