Four years in the making and six months in orbit, Northrop Grumman‘s (NYSE: NOC) The MEV-1 satellite has just achieved its first success: Intelsat‘s (OTC: INTE.Q) The IS-901 telecommunications satellite is back in service.

And just like that, a new industry was born.

Present at the start

We first told you about the Mission Expansion Vehicle Spaceship in 2016. A self-propelled space tug, MEV-1 was designed by the “Innovation Systems” division of Northrop (back when it was called “Orbital ATK”) to serve as a kind of space tow truck that could save satellites dead, tow them out of orbit for repair or refueling, then return them to orbit to continue operating as intended.

Last October, sitting on top of a Russian Proton rocket at the Baikonur Cosmodrome in Kazakhstan, MEV-1 took off for its first mission: to save a 19-year-old Intelsat telecommunications satellite that had run out of fuel, called IS-901.

It took four months for the MEV-1 to reach and dock the IS-901 (as of February 2020). Since then, it has regularly trained the IS-901 in a new geostationary orbit, which it reached late last week. Now, for the next five years, MEV-1 will remain attached to IS-901, serving as both the engine (and fuel tank) of the Intelsat satellite and its guidance system, helping it maintain an appropriate orbit. and allowing it to function as a comsat serving “approximately 30” of Intelsat’s government and commercial customers.

At the end of the five years, MEV-1 will drag IS-901 into a declining orbit, where both satellites will descend to Earth and burn in the atmosphere, preventing either of them from adding to the growing cloud of space debris surrounding the Earth.

What this means for Intelsat

This is great news for Intelsat. For the low cost of just $ 13 million per year (its fees paid to Northrop), Intelsat is expected to get five more years of life with IS-901, a satellite that originally cost probably $ 300 million. to be built and which was to remain in service for 13 years (approximately 23 million dollars per year).

It’s an affair.

It also means that Intelsat will be able to collect revenue from customers using comsat for another five years. It’s unclear how much exactly, but all Intelsat gets is way more than the $ 0 per year the IS-901 was making until Northrop picked it up.

What this means for Northrop Grumman

But it’s an even bigger deal for Northrop Grumman. All at once, he (a) earned about $ 65 million in recurring revenue over five years, (b) proved that repairing and maintaining satellites in orbit is a viable business that can generate Following returned to it with subsequent launches of “MEV”, and (c) completed its mission of repairing and refurbishing satellites before any of the other rivals seeking to open up this market could accomplish theirs – making Northrop Grumman the de facto leader in this industry.

What “other rivals” are likely to challenge Northrop’s supremacy?

The list is actually quite short. We know that Lockheed Martin (NYSE: LMT) launched a plan to build a “Jupiter”-class space tug as part of its bid for a NASA commercial resupply services contract in 2015 – and charge NASA for the experience. However, NASA canceled this deal.

Smallest rival in space Maxar Technologies (NYSE: MAXR) poses (or perhaps posed) a greater threat to Northrop’s space tug ambitions. In quick succession, Maxar won contracts from NASA and the Defense Advanced Research Projects Agency (DARPA) a few years ago to play doctor of their geostationary satellites. For a while, it seemed like Maxar was the favorite to dominate this nascent orbiting satellite repair and maintenance industry. But Maxar has already abandoned his plan to perform this service for DARPA, and we have also seen little progress on his contract with NASA.

Meanwhile, Northrop has gone ahead and done exactly what he promised to do, has a satisfied customer to show for him – and is already planning his second assignment for Intelsat.

MEV-2 is expected to take off later this year. Its objective: the maintenance of the Intelsat “IS-1002” satellite.