By Edward Herlik*

Colorado Springs, CO (November,1st, 2008) - An imminent technology and market research report by Homeland Security Research Corp, with lead analyst Edward Herlik, concludes that several significant commercial markets will be transformed by new flight vehicles. Recent developments in extremely long endurance robotic flight will create or impact opportunities in entertainment broadcasting, cell phone service, overhead imagery, etc. Much of this profit will shift away from the space service industry.

The Defense Advanced Research Projects Agency or DARPA, the US military’s future-focused engineering developer, finished initial development and evaluation of stratospheric airships. DARPA declared them ready for large scale prototyping in 2007. DARPA then began similar work on traditional unmanned aerial vehicles or UAVs with a goal to reach the same prototyping decision point in 2012. One such UAV, the British civil and government partnership QinetiQ’s Zephyr, flew up to 60,000’ for three and a half days at the end of July 2008. A Southwest Research Institute team has flown a small airship above 70,000’ twice, though for far less time due to tears in the fabric.

Two American firms have funding to fly prototype stratospheric airships around September 2009. Those competing efforts use entirely different technologies and are intended for entirely different markets. Other relevant flights have already occurred in South Korea, Japan and Switzerland. Those efforts are aimed squarely at commercial markets, though the military potential is also obvious.

These and other recent developments indicate, according to HSRC’s analysis, the initial probability for truly persistent high altitude platforms. Those unmanned flight vehicles will fly into the wind in the lower stratosphere to essentially hover over one area. They will behave like geosynchronous satellites but will be much cheaper and easily upgradeable. This cost-effectiveness, together with the new technology’s ability to stay on location for weeks to years at a time, is the key to their commercial value. Such capabilities will cost a tenth or less of space service costs with significant savings over conventional aircraft and cell phone towers as well.

Cell phone markets in developed regions like North America, Europe and Northeastern Asia are saturated. Customers have as many accounts as they like and will soon reduce the numbers of subscriptions as coverage expands. Why? There’s little need to carry multiple cell phones while traveling or to reach other limited accounts if one service will do it all. This trend means that increased profits in developed markets will only come from added premium services, such as broadband data, or enticing customers away from competitors. Persistent platforms will enable that competition with payloads that can be easily upgraded to 4G and future formats while delivering uninterrupted service over very wide areas.

Developing areas of Africa, Asia and India are adding cell phone subscribers at over 50% per year in some cases. That pattern mirrors the 65% growth rate in cell service seen industrialized areas during the 1990s. But, growth is severely hampered by the lack of infrastructure. Persistent platforms will deliver cell service from above 60,000’ and allow providers to skip the cell tower stage entirely. This may be the only way to exploit those markets profitably.

Cell Phone Infrastructure spending must grow rapidly to serve new markets in developing areas and to introduce new services in Europe, North America, Japan and South Korea.

There are significant profits to be made in both providing the aerial infrastructure and in providing the cell service itself. In vast areas where customer density is too thin or their subscriptions too small to support traditional infrastructure, persistent platforms will be the only means to deliver profitable service. Those flight vehicles, airships at first, will also lease payload space for other services such as imagery and wireless internet.

Persistent platforms provide solutions to problems that are not yet solved by space services. Three foot resolution, for example, is uncommon and expensive from satellites in typical 250 mile orbits. Such satellites rarely pass over a specific point on the ground and must get lucky with sun angle, weather and other potential obstacles to produce images that are useful to customers such as Google Earth and Microsoft’s Virtual Earth. Persistent platforms, on the other hand, flying above the jet stream will move where they’re needed and deliver streaming video at less than one foot resolution, on demand. Those robot flight vehicles, unlike space vehicles, can be recovered for upgrade and reuse.

Satellite television is the space industry’s most profitable commercial venture. Persistent platforms will, in our opinion, provide stiff competition in major markets by delivering cheaper high definition service to ordinary antennas. This competition may also force the unprofitable satellite radio industry into bankruptcy.

The new UAVs will also contribute to the creation of new markets that are not now possible. Internet Protocol Television (IPTV), which is already delivered as part of very high-speed internet capabilities, is the most obvious early beneficiary. IPTV works by delivering broadcast and on-demand television over internet connections in essentially the same way that satellite television delivers content over specialized ground hardware. Both services are difficult or impossible to receive when moving or when away from their specialized hardware.

Persistent platforms will change all that by connecting customers with high data rate service through built-in antennas or laptop computer communications cards. Even at fixed locations, we forecast that IPTV will expand faster than any other entertainment service.

About HSRC
Homeland Security Research Corp. (HSRC) is a Washington, DC based, international market research and professional services firm serving the homeland security market. Our firm provides premium market, technology and industry expertise that enable clients around the world gain critical insight into the business opportunities that exist within the Homeland Security market. Our clients include U.S., European and other governments, Fortune 500 companies and homeland security planners worldwide.

*About Ed Herlik
Ed Herlik recently retired from a long US Air Force career. He earned a Bachelor of Science in Engineering and International Affairs from the US Air Force Academy and a Master of Arts in National Security Studies from California State University. A Cold War, Desert Storm, Somalia and the Balkans veteran, Ed was a command pilot with operational experience in attack, transport and helicopter aircraft and well as commercial jets. He also served two tours in the US Air Force Space Command, finishing as the command’s expert on the survivability of persistent platforms. He has two patents (firefighting aircraft and stress sensing bolts) with two more pending (stratospheric airships and hybrid engines for used vehicles). Ed also authored the book, “Separated by War: An Oral History by Desert Storm Fliers and their Families” (McGraw-Hill)