Antrix Corporation Limited:

A Strategy for the Global Market

C. Gopinath, Suffolk University
L. Surendra

n April 2007, Antrix, the commercial arm of the Indian Space Research
Organization (ISRO), successfully launched the Italian Space Agencys Agile satellite
into space and in January 2008, launched an Israeli defense satellite. These launches,
for which they were charging international rates for the first time, marked a significant
move into the global market for Antrix Corporation. In early 2008, its managing director, K. R. Sridhara Murthi, wondered which global strategy to pursue and in particular,
which segments of the commercial sector of the global market he should target, and
what organizational changes were required for the selected strategy.

ANTRIX CORPORATION
Antrix Corporation Limited was incorporated in September 1992 under the Indian
Companies Act as the marketing arm of the ISRO. Its stock was fully held by the government. Its vision statement stated To emerge as a globally significant space company fully utilizing the strengths of ISRO and other Indian entities in the field of space.
The name Antrix was an anglicized version of the Sanskrit word antarriksh meaning
space.
Antrix marketed products and services in which space technology played a key role,
such as spacecraft, launch services, and information and connectivity derived from space.
(See Exhibit 1 for a primer on space and satellites.) Its business portfolio included:
Satellite systems, including communications and broadcasting, earth observation,
meteorology and scientific systems;
Satellite subsystems and components;
Services, including launch services, earth observation data services, mission support,
transponder lease services, training and consultancy.
Antrix was conceived as an independent revenue generating company to support
ISRO in marketing its capabilities. Sridhara Murthi saw Antrix as a low investment
approach to generate value by leveraging skills. He observed that in spite of being a government-owned company with layers of government agencies to report to, neither ISRO
nor Antrix experienced any political interference in their functioning and [they] were
Copyright 2009 by the Case Research Journal, C. Gopinath and L. Surendra.
The authors wish to thank Antrix Corporation Limited and Mr. K. R. Sridhara Murthi for their cooperation. This case was written to stimulate class discussion rather than to illustrate the effective or ineffective handling of a managerial situation.

Antrix Corporation Limited: A Strategy for the Global Market

left to follow their own professional objectives and styles in the running of the organizations. In part, this was due to ISROs scientific nature which distinguished it from
other public sector undertakings, and the fact that from the beginning it was headed by
scientists of national repute who established a culture of independence.
Sridhara Murthi, with an MBA and a degree in engineering, headed Antrix, which
employed about 20 people (See Exhibit 2 for the organizations structure). While the
company was organizationally distinct and led by its own board of directors, it was nevertheless part of a network of government organizations through which it executed its
plans (see Exhibit 3). Several Executive Directors of Antrix, including Sridhara Murthi,
had begun their careers at ISRO and Antrix referred to its connection with ISRO in its
marketing brochure as an organic linkage to ensure a high level of contribution and
commitment to customers programmes from the workforce of ISRO and other space
entities. Thus, Antrix viewed itself as the interface between the customer and the vast
network of space agencies.

INDIAN SPACE RESEARCH ORGANIZATION1

Founded in June 1969, ISRO executed the national space program through its establishments in different parts of India. The main scope of the program included development of satellites, launch vehicles, sounding rockets and associated ground systems.
ISRO operated on a budget of approximately $815 million. (See Exhibit 4 for a description of the Indian space environment and projects undertaken.)
Dr. Vikram Sarabhai, ISROs founder and the father of Indias space program, enunciated the original vision, We must be second to none in the application of advanced
technologies to the real problems of man and society. As an eminent scientist, visionary and institution builder, he was conscious of Indias underdeveloped nature and
wanted to focus the organization on applying science toward national socio-economic
development. The organizations annual report used to quote him, India does not have
the fantasy of competing with the economically advanced nations in the explorations of
the moon or planets, or manned space flights.
However, the changing international environment and Indias confidence in its
growth and development caused ISRO to rethink its goals. The organization began considering planetary exploration and undertook steps towards manned space programs.
While some criticized these projects as moving beyond Sarabhais vision, others justified
it as a natural culmination of past research and technological capability building.2
Indias space program proceeded with the cooperation of many countries, on the
premise that space does not recognize national boundaries and that global scientific
issues need to be addressed globally. It conducted remote sensing and instructional television experiments in cooperation with NASA (U.S.); launched satellites and participated in a manned space mission with the former USSR; launched satellites with the
European Space Agency (ESA); and worked on cryogenic engine stages with Russia. In
turn, it assisted other developing countries by training personnel and in a plan to launch
the Third World Satellite in 2009 to beam images for use by developing countries.
Beginning in 1963, the Indian space program conducted 24 launches, of which 19
were successful, with failures occurring in the initial years. In 2001, India became one
of six space-faring nations when ISRO successfully launched a test satellite placing it in
a Geo-synchronous Transfer Orbit. The others were the U.S., Russia, France/EU, Japan,
and China.

Case Research Journal Volume 28 Issue 3 and 4 Summer/Fall 2008

Sridhara Murthi explained that ISROs involvement in national priorities such as

generating remote sensing data for use in the countrys agricultural sector provided a
strong basis for its existence. ISRO followed the pattern of NASA and ESA to build
technological capabilities in the private sector. Young technocrats were identified to
initiate ventures in high-tech areas and many of those ventures had up to 80 percent
spin-off opportunities in non-ISRO applications. More than 500 small, medium, and
large companies were associated with ISRO either as suppliers of products and services,
or as recipients of know-how, he explained. By 2007, 279 technologies had been transferred to companies for commercialization in areas such as electro-mechanics, optics,
chemicals, electronic hardware and software.
Being directly under the Prime Ministers Office, ISRO occupied a unique position
among the public units in terms of its influence in the government. An example of this
was its success in garnering funds. ISROs objectives and projects, being dependent on
state funds, were open to national scrutiny. Space activities, in general, operated in two
broad areas: space exploration and practical application. After having focused on the latter for many decades, ISRO added projects in space exploration, too. In 2000, the government approved ISROs request for $65 million to send an unmanned spacecraft to
circle the moon in 2008 to prepare a 3-D atlas and chemical mapping of the moons
surface. It made this decision after much debate and in the face of criticism about
ISROs priorities. This flight carried payloads from ESA, NASA, and Bulgaria. A
national space-based platform for astronomical observation was scheduled to be
launched in 20082009.

OVERVIEW OF THE SPACE INDUSTRY

The global space industry, broadly defined to include activities related to space infrastructure, products and services, and government budgets for space related activities,
was estimated at $180 billion in 2005.
Space exploration required close international coordination among the agencies
involved. The International Telecommunication Union (ITU), in which governments
and private companies participated, provided this service. The ITU was a Geneva-based
UN agency for information and communication technologies. It assisted in the development of telecommunications technologies, set the standards for mobile telephony
and the Internet, and managed the radio-frequency system. Nations had to apply to the
ITU to secure slots to place satellites in space.
The commercial portion of the industry was roughly 45 percent of the total. It was
a capital intensive industry with projects of long gestation and of military importance
that naturally drew the governments in as players (Table 1). The large U.S. expenditure
on military related activities (such as military telecom systems and early warning satellites), and secondary benefits in the commercial sector, gave U.S. companies a lead in
this industry. Such investments across the military and commercial sectors enabled technology development and generated scale economies.

Antrix Corporation Limited: A Strategy for the Global Market

Table 1

Government Space Budgets in 2001 (US$ million)

Country
United States

Civil

Military

Total

Total %
of GDP

14,100

14,100

28,200

.28

Japan

2,300

2,300

.06

France

1,157

374

1,531

.18

Italy

939

30

969

.09

Germany

616

55

671

.07

India

402

402

.08

Russia

180

80

260

.09

China

150

30

180

.02

21,327

14,687

36,012

.13

Total (top 27 governments)

Source: Prepared from U. Shankar, The Economics of Indias Space Programme. Oxford
University Press, 2007. Table 1.6, p.15.

Reductions in public funding as well as rapidly expanding opportunities for commercial activities in broadcasting and telecommunications led to increasing commercialization of the industry and private sector involvement. (Exhibit 5 gives a summary of the
major companies operating in the industry and the collaborations that have sprung up.)
Public-private partnerships were common the world over and, as of 2000, the private sector accounted for about 65 percent of the industry revenues in the U.S., 50 percent in Western Europe, and about 30 percent in Japan.3 Going back to the era of the
Cold War, the U.S. and Russia led in technology, while the U.S. and Western Europe
accounted for 85 percent of the commercial market space.
The industry comprised four segments: satellite services, ground equipment, satellite manufacturing, and launch services. Revenue estimates for the industry segments
are in Table 2.4

I. Satellite Services.
This segment included mobile data and voice, fixed services such as broadband, private
networks, remote sensing, transponder leasing, and broadcasting (television and radio).
These activities accounted for the bulk of industry revenues, with growth of satellite television driving a 19 percent increase in 2006 over the previous year. Revenues from use
of transponder capacity grew by 25 percent. The driving forces were the global deregulation of telecom markets, the introduction of large non-geostationary orbit satellite constellations for mobile communications, and the rapid growth of the Internet driving the
demand for satellite communications. The satellite communication industry witnessed a
boom during the late 1990s, when there were orders for more than 30 communications
Table 2

World Satellite Industry Revenues (US$ billion)

Segment

2001

2002

2003

2004

2005

2006

Satellite services

32.3

35.6

39.8

46.9

52.8

62.6

Ground equipment

19.6

21.0

21.5

22.8

25.2

28.8

Satellite manufacturing

9.5

11.0

9.8

10.2

7.8

12.0

Launch services

3.0

3.7

3.2

2.8

3.0

2.7

66.4

71.3

74.3

82.7

88.8

106.1

Total

Source: State of the Satellite Industry Report, Satellite Industry Association, June 2007.

Case Research Journal Volume 28 Issue 3 and 4 Summer/Fall 2008

satellites to be launched every year. The pace slowed down after that, but with the innovations in technology it was imperative to replace old satellites.
The traditional demand for the global positioning system services came from tracking and navigational tools for land and marine vehicles. These services were provided by
GPS (U.S.) and GLONASS (Russia). A number of regional systems were planned in
Europe and by China, India, and Japan. Increasingly, GPS receivers became consumer
electronics devices, and devices such as cell phones contained GPS chips which were
expected to drive this segments growth.
Remote sensing included raw satellite imagery, aerial imagery, and geographic information system software and services. The buyers utilized this data for environmental
monitoring, weather forecasting, and intelligence gathering. Computer software (not
included in these estimates) improved information content and use of this data, and
thus provided added value. The commercial remote sensing segment increased by 16
percent in 2006 over the previous year. New business opportunities in civil and commercial imagery markets, including online mapping services, contributed to this
growth.
Other providers of remote sensing data included: (a) GEOEYE, Virginia, USA (formerly known as Orbital Imaging Corp.). The U.S. Department of Defense was its single biggest customer accounting for 90 percent of the companys revenue;5 (b) Digital
Globe, Colorado, USA. About 60 percent of the business of this privately owned company came from defense/intelligence uses and the remainder from commercial clients;
and (c) SPOT Image Systems, France, owned by the French Space Agency, other
European governments and companies.
After the U.S. and France, India was the third country to enter the field of remote
sensing (and only the second after the U.S.) to offer commercial images of less than 1m
resolution. Antrix generated $7 million in revenues through worldwide sales of satellite
images.

II. Ground Equipment

This segment included equipment for receiving data and images from satellites such as
mobile terminals, gateways, control stations, very small aperture terminals, handheld
satellite phones, and digital audio radio service equipment. It was the second largest segment of the industry and its share had remained stable over the years. Digital multimedia broadcasting and direct-to-home terminals were expected to increase in the
future. Companies in the private sector dominated this industry.
Fixed earth stations (telecommunications, broadcasting, and very small aperture terminals) continued to dominate the industry, yet their importance was declining. The
satellite ground segment had been going through a transformation. More subassemblies,
such as GPS receivers, were integrated into earth stations. The use of more powerful
satellites and higher bandwidth frequencies allowed for smaller antenna sizes. Increasing
production runs allowed for scale economies, reducing prices. Compression techniques
facilitated the throughput amounts of data. Technological progress, falling costs, and
improved ease-of-use permitted smaller organizations to employ satellite communications and ever smaller earth stations.

III. Satellite Manufacturing

This segment included the manufacture of satellites as well as their components and
subsystems. U.S. companies had dominated this field for several years but saw their
Antrix Corporation Limited: A Strategy for the Global Market

collective market share fall to about 40 percent after 2002. This was due partly to the
increased U.S. federal government controls on technology transfer to foreign firms,
and partly to the increasing competitiveness of foreign manufacturers. The controls
dissuaded some countries, like China, from buying from the U.S., and affected the
competitiveness of U.S. firms because of delayed government approval.
The satellite manufacturing industry depended on the underlying demand for products and such services as broadcasting and communications. Increasingly, customers
were looking for more payload flexibility so they could serve different market niches.
However, satellite design, which took into account the type of launch, limited ease of
switching. Although the segment grew by 54 percent in 2006 over the previous year,
growth was fluctuating. Government payloads accounted for over 75 percent of the revenues. The companies that operated in this business included Boeing, Lockheed,
Orbital Sciences & Loral (USA); Astrium, & Thales Alenia (Europe); IAI (Israel); and
GWIC (China). In the recent past, Space Systems/Loral, Astrium and Thales Alenia led
in securing orders. French government policies were also very supportive of the growth
of Astrium, which was located in France.

IV. Launch Services

This segment included commercial launch services, vehicle manufacture, and the manufacture of components and subsystems. Clients for commercial launches comprised
providers of satellite images, satellite telephone companies, research laboratories and
space entrepreneurs. These payloads were usually lighter, i.e., requiring smaller satellites
compared to those for military and espionage uses. The U.S., Europe, and Russia
accounted for about 90 percent of the market. This sector shrank in 2006 by 10 percent over the previous year and the share of U.S. launch providers fell from 50 percent
to 37 percent.
Launches to both geosynchronous orbit (GEO) and low earth orbit (LEO) had seen
a slowdown in the recent past. The demand for GEO launches had slowed due to competition from terrestrial technologies like fiber optics and also the higher payload capacities of the newer launch vehicles. Expectations of many value added new communications services using LEO were not realized and resulted in excess capacity. The oligopolistic nature of the market as well as geo-political factors influenced the pricing strategies of firms, as did such factors as the number of contracts and the type of payloads
with the launcher.
Rivalry was strong and the dominance of the U.S. in this segment came from its
control over many of the technologies and components. Apart from NASA, major private companies in the U.S. operated in this field. Boeing acquired the Delta family of
launch vehicles from McDonnell Douglas and used the launch pads at Cape Canaveral
Air Station and Vandenberg Air Force Base; in the U.S. Lockheed Martin used the Atlas
family of launch vehicles from the same two launch bases.6
Tightening budgets and growing competition resulted in alliances and consolidation
in the industry. Boeing and Lockheed combined their rocket business into a venture
called United Launch Alliance. Another alliance was Sea Launch Inc., a consortium led
by Boeing (U.S.), Energia (Russia), Kvaerner (Norway) and Yuzhmash (Ukraine),
formed in 1995. The International Launch Service, established in 1995, marketed both
the Atlas family of rockets and the Russian Proton. Also, foreign assistance helped
Russia modernize its launch program7 and convert retiring intercontinental ballistic
missiles (ICBMs) into launch vehicles.
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In recent years, Ariane captured a significant share of the market. Arianespace was
a commercial company with 53 corporate shareholders, including 41 aerospace manufacturers located in 12 European countries.
Japan imported U.S. technology to build rockets, but the license prohibited the
launch of third-party payloads. The Japanese space agency developed its rocket program
based on U.S. and European components. China made use of the Soviet Soyuz technology to build its Long March family of launch vehicles. The international market for
launching satellites, in its addressable range of sizes, was estimated by ISRO officials at
$1.2 to $1.5 billion annually. This excluded the market for micro-satellites, which were
launched as a piggyback on larger satellites. Antrix estimated that it had a 5 to 10 percent market share in launch services.

GLOBAL ENTRY BY ANTRIX

The global nature of the industry and its own growing experience prompted Antrix to
scour the overseas market more closely for opportunities. Sridhara Murthi recalled the
companys move into global markets. We built satellites for gathering data for Indias
domestic needs, but they were in orbits that allowed them to gather data across the
whole globe. So we began thinking of selling the data globally. Over the years, ISRO
had entered into Memoranda of Understanding with 28 countries to share technology
and expertise. These enabled Antrix to seek market opportunities and to forge alliances.
Antrixs domestic market was captive although not protected. Foreign companies were
allowed to operate in India to sell their services, but the domestic market was small and
its pricing advantage gave Antrix a dominant presence. In remote sensing satellites, the
company believed it had a 3050 percent cost advantage, and in communication satellites and launch services a 2030 percent advantage. Its launch successes had gradually
lowered the insurance premium it was charged to a marginal 23 percent higher than
that charged to U.S. rivals. Moreover, the company leaders felt that the experience they
had gained servicing diverse customers in India could be leveraged in serving similar
needs in other countries.

I. Satellite Services
Antrix provided a range of satellite services that accounted for 56 percent of their revenues, of which transponder leasing accounted for 48 percent and the rest 8 percent.
Transponder leasing: Antrix had about 150 domestic customers in this segment that
included the various commercial television companies and emergency and business
communications terminals. Loosened restrictions in the telecommunications industry
by the Government of India provided a big boost to this field. The provision of Directto-Home services was also an important factor. Competitors here included Intelsat,
PanAmsat, Eutelsat, Loral, among others. Sridhara Murthi explained, According to the
present law, domestic companies come first to Antrix to secure capacity. If that is not
enough, Antrix will look for outside suppliers and then sub-lease the capacity to the customer. This is not restrictive. Since we can cumulate demand, we are able to get better
deals than if the customer went looking for capacity himself.
Remote sensing: As noted earlier, the initial impetus for exploring the international market for its products and services came in 1994, when Antrix considered selling
data from its remote sensing satellite. Their data were cost effective and as good as those

Antrix Corporation Limited: A Strategy for the Global Market

of competitors. However, there were no takers even when Antrix offered to supply data
free for a six-month trial period. As Sridhara Murthi observed, We lacked credibility
in the international market. It was clear we needed a partner. A year later, in 1995, their
search for a partner led them to enter into a revenue-sharing agreement with EOSAT, a
U.S. company that received exclusive rights to market the data globally (excluding
India).
As acceptance of its data and services grew, Antrix gradually spanned the globe with
24 data-receiving stations in such countries as the U.S., Russia, Algeria, China, Dubai,
Ecuador, Germany, Spain, Thailand, Kazakhstan and Japan to receive data. These
ground stations were joint ventures with partners who invested in a ground station for
which Antrix supplied proprietary hardware and software to receive the data. The partners were granted an exclusive territory (a country or group of countries) within which
to add value to the data received and sell the information as solutions. Antrix created a
world archive of satellite data at a station at Svalbard, Norway. With about 1,000 customers from both government and private sectors, it estimated that it had about a 20
percent global market share in the addressable range of products.
Over time, EOSAT was acquired by Space Imaging (a joint venture of Lockheed and
Raytheon), which was in turn acquired by GEOEYE. Through all these transitions and
the changing business focus of its partner, Antrix felt that insufficient attention was
being paid to its needs and so it terminated the agreement as of 2007.
Antrix began to develop multiple channels for distribution of its data. In 2006, it
appointed the firm Earth Observation Technologies LLC as its managing agents to
operate globally on a non-exclusive basis. Tim Puckorius, Chairman and CEO, was an
American with considerable experience in the space industry. While at EOSAT, he had
already worked with Antrix. Commenting on his role, he said, We are a crucial bridge
facilitating Antrix in reaching out to global markets to sell its products and services. We
have the flexibility to travel and make deals. Antrix also entered into marketing
arrangements with Scanex (Russia), Euromap, and with The Sanborn Map Co.
(Colorado, U.S.), the last being limited to sales of mapping data.
Antrix provided other services including technical services such as monitoring satellites for WorldSpace, PanAmsat, and Lockheed Martin, and consultancy services such
as training for Arab Satellite Communications Organization engineers on mission operations.

II. Ground Equipment

Antrix generated about 14 percent of its revenues from this segment. It undertook projects, some on turnkey basis, and satisfied customers requirements through global sourcing. These projects included establishing ground stations (discussed under remote sensing above) and providing related technology, a direct receipt system for satellite television, antenna servo systems, navigation related receivers and transportable telecommunication terminals. Antrixs customers in this area were both domestic and foreign firms
(including China, Russia, and the U.S.) in the public and private sectors.

III. Satellite Manufacturing

Antrix initiated talks with Boeing in 2001 to pursue the market for manufacture of
small commercial communication satellites (estimated at two to three per year). Several
rounds of negotiations took place, but progress stalled due to management changes at

Case Research Journal Volume 28 Issue 3 and 4 Summer/Fall 2008

Boeing. Moreover, any alliance with Boeing was subject to U.S. government regulations
requiring clearance for export of technology. Finally, when this alliance seemed unlikely,
Antrix turned to EADS Astrium. Under a partnership entered into in mid-2005, EADS
agreed to provide payloads that would be assembled on a satellite platform built by
Antrix. This arrangement allowed EADS to stay in the small satellite segment without
the capital investment required to maintain a light version of its Eurostar satellite platform. Antrix would focus on South Asia, and EADS would cater to the rest of the
world. The first venture out of this partnership was a contract with the satellite operator Eutelsat SA of Paris. The satellite manufacturing segment accounted for about 26
percent of Antrix revenues.

IV. Launch Services

Even as Antrix began looking for international clients for its launch services, the excess
global capacity in the segment was becoming clear. However, Antrix believed that its
technical competence along with the lower cost of operations would allow it to gain a
profitable share.
For a nominal fee, Antrix had launched six small satellites for overseas clients in
Argentina, Belgium, Germany, Indonesia, and South Korea while it built its experience
and reputation before venturing to launch the Agile satellite in 2007. The international
rates for satellite launches ranged from $10,000 to $15,000 per kg. However, Antrix
charged $29,000 for the Agile satellite launch, considered to be a premium price,
because the satellite had to be placed in a specific orbit of 550 km at a low inclination
of 2.5 degrees to the equator. Planned launches in the future included payloads for
clients in the EU, Argentina, Israel, Singapore, Canada (six micro-satellites weighing a
total of 26 kg), and France. A second launch pad gave it the capacity to increase the
number of launches. A launch on the geo-stationary launch vehicle was estimated to be
more economical than launching by Ariane of Europe. Launch services accounted for
about 4 percent of Antrix revenues.

PERFORMANCE OF ANTRIX
In space exploration, governments in all countries were major players through civilian
and military expenditures (Table 1).8 In China, the U.S., and the former USSR, the first
civilian satellites were launched by military rockets. The technology developed for military purposes, being of dual-use, indirectly subsidized the nations civilian programs.
The multiple objectives of the programs, such as scientific research, commercial use, etc.
made performance evaluation of civilian programs difficult. Multiple satellites were
launched together each serving a different purpose. Occasional launch failures were
treated as necessary costs of experimentation and development, and were not amortized.
Many projects had a long gestation period. Launch vehicles, for example, took a long
time between conception, design, and execution. Moreover, strategic and political considerations caused governments to hide space program subsidies, further making evaluation difficult.
In view of the significant commitment of public funds, ISRO asked for an independent evaluation of its space program which concluded that it had achieved its goals
in a cost-effective way.9

Antrix Corporation Limited: A Strategy for the Global Market

Based on the 2007 and 2008 annual reports, (Exhibits 68), sales were 41 percent
greater 20072008 than in 20062007. Profit after tax had improved at 18 percent for
the year 20072008. Based on a capital of Rs. 10 million, Antrix had posted a handsome dividend of 3371 percent in 20072008, up from 2,115 percent in 2007. Antrix
had to follow the Indian government mandated policy for public enterprises of declaring a 20 percent dividend on after-tax profits. The 80 percent of profit retained over the
years had grown the net worth to Rs. 3.65 billion. Foreign receipts contributed 14 percent of the total income for the year 20072008.
In a national survey carried out jointly by an Indian credit rating agency and the
magazine India Today, Antrix was judged the best small Indian public sector undertaking in the revenue range of Rs. 15 billion ($25m$125m).

CHALLENGES AHEAD
The planning document that normally guided the company was an annual
Memorandum of Understanding that the company entered into with the Department
of Space. It spelled out Antrixs goals and the support that it could expect from the
Department. In 2006, the Antrix board challenged management to think long-term
and come up with a five-year plan. In response the company chose a path of enhancing
its competitiveness in the global market by forming alliances with domestic and global
companies and by making innovative use of its human resources and its technological
advances.
The specific goals that Antrixs management proposed to the board were:
1020 percent global market share in remote sensing data (satellite services),
5 percent in satellite manufacturing, and
5 percent in launch services within five years in its addressable range of activities.
Antrix relied on significant cost advantages. Launches by the new Geo Stationary
Launch Vehicles were to cut launch costs by 40 to 50 percent. Reusable launch vehicles
that would reduce cost even further were being aggressively studied. However, since the
growth rates of different segments of the industry varied (Table 2), and firms generally
operated within those segments where they had specific technical expertise, it was difficult to judge how ambitious the companys targets were.
The industry was consolidating due to excess capacity, especially in satellites and
launch services. At the same time, deregulation and development of downstream technologies were opening up new markets. From a marketing perspective, there were vast
portions of the globe that were waiting to be developed. For example, 80 percent of the
worlds households had no TVs (with potential for direct-to-home satellites), 95 percent
of the population had no personal computer (with potential for broadband satellite
communications) and about 50 percent of the worlds population lived two hours or
more from the nearest phone.
Puckorius, Antrixs agent in the U.S., observed that the growing miniaturization of
satellites reduced the need for large launch vehicles, making Antrixs PSLV vehicle
attractive. With a strong domestic market as a base, the company felt it was important
to also be competitive internationally. The domestic market now allowed for scale
economies in services and the ability to spread risks. As Sridhara Murthi noted, There
is a lot of money to be made in downstream services such as telecom equipment, signal
receivers and processors. We are yet to make a decision as to whether we should enter

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Case Research Journal Volume 28 Issue 3 and 4 Summer/Fall 2008

that market. As of 2008, Antrixs approach domestically was to promote and enable the
private sector in developing downstream services through technology transfer and support services.
Global politics influenced the global space industry in many ways. The U.S. and the
former USSR wanted to dominate in space. Political objectives like national security
and scientific objectives such as understanding the solar system and the universe were
closely intertwined with business objectives of profitable operations in various market
segments. As nations advanced technologically, a combination of foreign policy and
business interests caused them to pay attention to the space industry. China had
launched three manned missions into orbit and intended to land a man on the moon
by 2020. South Korea aimed for a 10 percent share of the launch service market. Brazil
and Israel, while not major participants, were expected to increase their roles in the
future.
U.S. foreign policy objectives influenced the industry in several ways. Under the
International Traffic in Arms Regulations (ITAR), a set of U.S. government rules, space
technology pertaining to satellites and launch vehicles was included in a munitions list
of items prohibited for export. Foreign companies needed specific government exemptions to purchase products or services from U.S. companies. Such restrictions triggered
the Europeans to create the Ariane space program in France to gain independent access
to space. Alcatel, a French company, marketed what it called ITAR-free items, meaning that these items substituted for those that could not be imported from the U.S. To
remain competitive, many U.S. companies lobbied their government to relax the restrictions. Specific agreements between the U.S. and France, Germany and Japan restricted
the partners from using technology received for commercial purposes. Antrix imported
most of the components for satellite manufacturing, as there was a limited market
domestically for such microelectronics.
The U.S. also administered a Missile Technology Control Regime (MTCR) for the
purpose of preventing Third World countries from developing ICBMs. It was U.S. government policy to generally deny requests to export complete space launch vehicles or
other MTCR components. The general U.S. policy of not supporting the development
or acquisition of space launch vehicle systems in non-MTCR countries constrained
ISROs options and made it difficult to acquire technology for manufacture of the cryogenic engine.10 As Sridhara Murthi noted, India is not a signatory to the MTCR regime
and so we need permission from the U.S. government if some of the components used
are sourced from the U.S. We have lost customers on account of this.
China, riding on its tremendous economic growth, desired to be a major player in
the commercial launch industry. Its state-run rocket company maintained a partnership
with Thales Alenia Space, a unit of the French commercial satellite manufacturer, Thales
SA. This partnership offered small commercial satellites that were about 40 percent
cheaper than U.S. models and whose launch cost (about $50 million per rocket) was 50
percent of that of U.S. or European launches. Since 2006, China had either launched
or committed to launch six Thales satellites for civilian customers in Indonesia, Nigeria
and Venezuela. The U.S. government was concerned about this alliance because Thales
was a subcontractor on sensitive Pentagon programs and the U.S. feared it might violate ITAR regulations. But Thales had assured the U.S. government that it had erected
sufficient internal firewalls and other safeguards.
Antrix needed to gear up in several areas in order to meet its global goals. Sridhara
Murthi reported that Ratan Tata, an industrialist and a member of the Antrix board,

Antrix Corporation Limited: A Strategy for the Global Market

11

advised the organization at a board meeting that if Antrix wished to go global, it needed
to build an appropriate overseas infrastructure of offices on its own or through acquisitions, and hire the requisite personnel to execute the strategy. Antrix did not make any
decisions on this matter, but the appointment of Earth Observation Technologies as its
global agent positioned them to reach global clients quickly without being hampered by
domestic bureaucratic constraints such as approval of overseas travel by the chairman of
the company even for senior officials.
Puckorius of EOT observed that a major advantage of Antrix was its in-house manufacturing depth. Most other government space agencies dont have the internal capabilities, he commented. They farm it all out. However, while Antrix had clear commercial goals, ISROs projects were all either scientific or geared towards national development. It was sometimes unclear how much of ISROs capacity Antrix might use commercially abroad. Increasing liberalization and privatization of state-owned enterprises
were also changing the Indian business environment. For example, the government was
seeking to involve private enterprises in areas such as armament manufacture that previously had been reserved for government-owned companies, but Antrix was not a part
of the privatization plans.
Antrix also faced challenges in securing the requisite human resources to sustain its
growth. To some extent, its inability to match private-sector compensation levels kept it
from attracting and retaining personnel because as a government entity, it followed government pay scales. Attrition levels among the younger scientists were as high as 50 percent. The boom in the Indian information technology industry had raised salary scales
across the board and for young engineers in particular, widening the gap between public and private sector compensation. According to Sridhara Murthi, the challenge of
working with cutting edge technology was insufficient to compensate for the salary difference between the public and private sectors among younger employees. He looked
for creative ways to increase compensation through such measures as project-based
incentives.11
Although the company had set goals for its various segments, Sridhara Murthi was
aware that there was still a lot of work to be done. He said, I feel restless about the
future. I feel I have not built the resources to handle the business that is coming. He
wondered if the organization was perhaps getting ahead of itself while pursuing a global strategy. How would the segments Antrix was targeting grow in the future? Slowing
market growth and rising costs were creating new alliances in the marketplace changing
competition. Internally, he needed to build the organizational resources to handle the
business he was reaching for. Puckorius also felt that the organization had a long way
to go to become an aggressive competitor. They are a reactive organization. If a request
comes, they compete. They dont go looking for it.
Did Antrix have the strategy in place to position itself advantageously and to quickly respond to the many challenges of the global marketplace? Its long-term future
depended on this.

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Case Research Journal Volume 28 Issue 3 and 4 Summer/Fall 2008

Exhibit 1

A Primer on Space and Satellites

India traces its space expertise to the Aryabhatiya, the masterly treatise of Aryabhata, born about 476
CE. It was Aryabhata who first deduced that the earth is round, and that its revolution around its axis
causes day and night. His extraordinary contributions to mathematics included calculating the value of
pi, a method of expressing large numbers, and calculations that have come to be known as the Table
of Sines.
Space: Earths atmosphere does not end suddenly at a particular height. Air density decreases and
the atmosphere gradually ends. By consensus, space is said to begin at a height of 160 km from
earth, where air is almost absent.
Satellite: A satellite is an object that repeatedly goes around the earth on a path called an orbit. On
release into space by a rocket (also called a launch vehicle), a satellite tends to move in a straight line
but is attracted to the earth by gravitational force. This results in a circular or an elliptical orbit around
the earth. The International Space Station, a joint U.S./Russian project, is at 350 km from the earth.
The IRS satellite of ISRO is at 600800 km from the earth.
Geostationary orbit: A satellite is geostationary when the satellite is stationary with respect to a point
on earth (geo). This circular orbit is in an east-west direction at a height of about 36,000 km and lies
over the equator. A satellite in this orbit takes 24 hours to circle the earth once. Since the earth also
takes close to 24 hours to spin on its axis once, the satellite behaves like a stationary object. One
third of the earth is visible to a geostationary satellite.
Polar orbit: This orbit passes over the poles in a north-south direction, while the earth is spinning in a
west-east direction. Thus, the satellite can observe most areas of the earth. A special form of this orbit
is the sun synchronous orbit, which takes advantage of uniform illumination of the sun.
Communication satellites: These satellites relay telephone calls or TV programs. Microwaves carrying these signals are transmitted to the satellite from the ground; the satellite receives the waves,
amplifies them, and transmits them over a larger area. These satellites can also take pictures of
weather formations over vast areas. Most communication satellites are in geostationary orbit.
Remote sensing satellites: These satellites carry cameras that take detailed pictures of the earths
surface, convert them into radio waves and transmit them to earth stations and thus provide useful
information about resources like water, agricultural crops, forests, minerals, etc. Most sensing satellites are in polar orbits.
The two types of rocket launchers that ISRO built and used were: Polar Satellite Launch Vehicle
(PSLV) for lighter payloads (up to 1600 kg), and the Geostationary Satellite Launch Vehicle (GSLV)
for heavier loads (up to 4 tons).
Adapted from Indian Space Programme: Reaching outTouching lives, ISRO, Bangalore, April 2007.

Antrix Corporation Limited: A Strategy for the Global Market

13

Exhibit 2

Organization Structure: Antrix Corporation Ltd. (2008)

Board of Directors*

Managing Director
K.R. Sridhara Murthi

Director
Business Development
L.S. Satyamurthy

Director
International Marketing
Dr. C.V.S. Prakash

Deputy Director
Business Development
R.L.N. Murthy

Director
Finance & Accts
Chandy Andrews

Director
Special Projects
Geetha Varadan

Director
Contracts
S.B. Iyer

Head, Accounts & IFA

Srinivasa Rao

*The Board of Directors is comprised of:

1. The Chairman, ISRO (Dr. G. Madhavan Nair)
2. The Managing Director, K. R. Sridhara Murthi
3. Director, National Remote Sensing Agency (Dr. K. Radhakrishnan)
4. Director, Vikram Sarabhai Space Centre (Dr. B. N. Suresh)
5. Director, Satellite Center (Dr. T. K. Alex)
6. Three representatives of Indian Industry (Ratan Tata, Chairman, Tata Sons Ltd.; Jamshyd Godrej, Chairman, Godrej Group of Industries; and
Ravindra Reddy, Chairman, GVK Group).
7. Two representatives of Government of India (R.C. Joshi, I.A.S., Secretary, Department of Economic Affairs, Government of India and Member
(Finance), Space Commission; and S.V. Ranganath, I.A.S., Additional Secretary, Department of Space)

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Case Research Journal Volume 28 Issue 3 and 4 Summer/Fall 2008

Exhibit 3 Network of Indian Space Organizations

Prime Minister

NRSA

Space Commission

PRL

NARL

Department of Space
ICC

NE-SAC

PCNNRMS

ANTRIX

SCL

ISRO
VSSC

LPSC

SDSC

IISU

DECU

MCF

RRSSCs

ISAC

SAC

ISTRAC

LEOS

Note
DECU: Development and Educational Communication Unit; ICC: INSAT Coordination Committee; IISU: ISRO Inertial Systems Unit; ISAC: ISRO
Satellite Center; ISRO: Indian Space Research Organization; ISTRAC: ISRO Telemetry, Tracking and Command Network; LEOS: Laboratory for
Electro-optic Systems; LPSC: Liquid Propulsion Systems Center; MCF: Master Control Facility; NARL: National Atmospheric Research
Laboratory; NE-SAC: North Eastern Space Applications Center; NRSA: National remote Sensing Agency; PCNNRMS: Planning Committee for
National Natural Resource Management Systems; PRL: Physical Research Laboratory; RRSSCs: Regional Remote Sensing Service Centers;
SAC: Space Applications Center; SCL: Semi Conductor Laboratory; SDSC: Satish Dhavan Space Center; VSSC: Vikram Sarabhai Space Center.

Antrix Corporation Limited: A Strategy for the Global Market

15

Exhibit 4

Background on Indian space environment and projects.

Several organizations managed the Indian space environment in a layered relationship. The structure
allowed the industry to enjoy support at the highest governmental levels and achieve coordination
among the several agencies that contributed to the program. The Indian space program was civilian.
Its objective was to promote the application of space science and technology for the countrys socioeconomic benefit.
The Space Commission formulated the policies, approved programs, and recommended its annual
budget to the parliament for approval. The Department of Space (DOS) was a part of the central government and reported directly to the Prime Minister. Its Secretary had always been a technocrat.12 The
DOS, and all its agencies put together, including ISRO, employed 16,192 people, of whom 11,057
were in scientific and technical categories and 5,125 in administrative categories.
In 1974, following the first nuclear test by India, the United States imposed sanctions that included a
ban on the export of space technologies. This made ISRO stress self-reliance as a long-term policy.
Unable to look externally for assistance, the organization had to reinvent technologies and thus build
its innovation capabilities. Its cryogenic engine development began in 1993 after Russia succumbed to
pressure from the U.S. and refused to honor its promise to transfer technology. In 2006, the country
began setting up a $320 million navigation satellite system to reduce dependence on U.S.-based global positioning system (GPS) satellites.
In keeping with its mission of applying space technology for national development, ISRO not only
spread its facilities around the country, but also undertook projects in the following areas:
a. A constellation of seven remote sensing satellites. These satellites gathered data pertaining to
agriculture, such as identifying the breeding grounds of malarial mosquitoes, checking forest cover
and water levels in reservoirs, and locating schools of fish in the sea. The images enabled the
user to crosscheck the accuracy of field-based surveys, apart from obtaining data on otherwise
inaccessible locales. Repeat gathering of data also helped study changes over time.
b. The Indian National Satellite network of ten communication satellites (the biggest in the AsiaPacific region) covered the entire country and provided telecommunication, television coverage,
and meteorological services (weather forecasting, disaster warnings, etc.).
c. The EDUSAT satellite, launched in 2004, connected 2300 school and college classrooms including some involved in non-formal education.
d. About 200 Village Resource Centers provided information and services like tele-education and
tele-medicine. The latter linked smaller rural hospitals to major urban specialty hospitals, and provided access to medical expertise.
e. The Indian Regional Navigation Satellite System involving seven satellites was planned to provide
accurate position, velocity, and time measurement in real time to a variety of vehicles. Apart from
personal navigation, it was to be used in surveying and mapping, marine, mining, and recreational
uses.
f. A family of sounding rockets was used to conduct scientific experiments. In addition, satellites and
balloons carried scientific instruments. Other missions expanded the organizations expertise.
They included the space capsule recovery experiment to build capability to recover objects as well
as a multi-wavelength observatory in space for advanced studies in astronomy.

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Case Research Journal Volume 28 Issue 3 and 4 Summer/Fall 2008

Exhibit 5

Major competitors in the space field and their business segments

No.

Company

Business

Founded

GEOEYE, Dulles, VA.

Launch Vehicles, Satellite Builder, Satellite

Communication, Remote Sensing
(http://www.orbital.com/)

1982

Space Systems Company,

Newton, PA (Lockheed Martin
Commercial Space Systems)

Launch Vehicles, Satellite Builder, Satellite

Communication, Remote Sensing, Missile
Systems

1956

EADS Astrium, Paris, France

Launch Capabilities, Satellite systems,

Orbital Systems and Manned Space
activities; Payloads, Defense Systems

2006
(Merger of EADS
Astrium, EADS
Space Transportation
and EADS Space
Services)

Antrix Corp., Bangalore, India.

Space Transportation, Space

Communication, Remote Sensing

1992

Thales Alenia Space, France,

LAquila, Italy

Space Communication, Remote Sensing,

GPS, Defense Systems

April 2007
(Merger Alcatel Alenia
Space and Telespazio)

NPO-PM Satellite Manufacturer, Space Transportation, Space

Krasnoyarsk, Russia
Communication, Satellite Builder, Defense

Mid-1960s

Boeing Satellite Development

Center, Chicago, IL

Launch Vehicles, Space Communication,

GPS, Military Communications Satellites

2000
(Boeing purchased
Hughes Space and
Communications
Company)

Space Systems/ Loral,

Palo Alto, CA

Space Communication, Satellite Builder

1990

China Aerospace Science and

Technology Corporation,
Beijing, China.

Space Transportation, Space

July 1, 1999 (Evolved
Communication, Remote Sensing, Satellite
from the former China
Builder.
Aerospace Corporation)
OtherMachinery, Chemicals, Communications equipment, Transportation equipment,
Computers, Medical care products and
Environmental protection equipment

Sources: Various company Web sites.

Antrix Corporation Limited: A Strategy for the Global Market

17

Exhibit 6

Balance Sheet (Fiscal year ends March 31)

2007
Rupees (million)

2008
Rupees (million)

Sources of Funds
Shareholders Funds:
Capital
Reserves and surplus
Total Sources of Funds

10
2,358

10
3,644

2,368

3,654

10
7
3

11
8
3

13

18

1,592
8,425
2,079

4,374
9,644
3,284

9,526
218

13,274
394

2,352

3,633

2,368

3,655

Application of Funds
Fixed Assets:
Gross Block
Less: Depreciation
Net Block
Deferred Tax Assets
Current Assets, Loans and Advances
Sundry Debtors
Cash and Bank balances
Loans and Advances
Less: Current Liabilities and Provisions
Liabilities
Provisions
Net Current Assets
Total Application of Funds
Note: Exchange rates for dollar-rupee conversion given in Exhibit 9.

Exhibit 7

Profit and Loss Statements (Fiscal year ends March 31)

2007
Rupees (million)

2008
Rupees (million)

Income:
Export
Foreign (Other) Receipts
Domestic Sales
Domestic (Other) Receipts
Other Income
Total Income

226
532
1,880
3,416
591

414
982
1,188
5,795
1,023

6,645

9,403

93
351
1,748
2,831
29
1

140
585
1,116
4,860
102
1

5,053

6,804

1,592

2,599

536

914

1,056

1,685

211

337

Expenditure:
Cost of Export
Cost of Foreign (Other) Receipts
Cost of Domestic Sales
Cost of Domestic (Other) Receipts
Administrative Expenses
Depreciation
Total Expenditure
Profit Before Tax
Tax Expenses, Adjustments, Provisions
Net Profit for the Year
Proposed Dividend
Note: Exchange rates for dollar-rupee conversion given in Exhibit 9.

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Case Research Journal Volume 28 Issue 3 and 4 Summer/Fall 2008

Exhibit 8

Financial Performance at a Glance

Description
Profit after tax (Rs million)
Dividend as a % of
Paid-up Share Capital
Expenditure as % of
Revenue
Net Worth per Ruppee
of Paid-up Capital (Rs)

200203

200304

200405

200506

200607

200708

185.70

236.60

394.30

612.70

1,055.80

1,685.30

372

474

790

1,226

2,115

3,371.00

74

88

83

79

76

72

59.15

77.86

108.28

156.67

236.81

365.49

Note: Exchange rates for dollar-rupee conversion given in Exhibit 9.

Exhibit 9

Dollar-Rupee Average Exchange Rates

Period

(Fiscal Year April 1March 31)

Value of US $1

0203

Rs. 48.42

0304

Rs. 45.95

0405

Rs. 44.88

0506

Rs. 44.22

0607

Rs. 45.20

0708

Rs. 40.29

Source: www.oanda.com

NOTES
1. The Indian space program was born with external help. The UN Committee on
Peaceful Uses of Outer Space was set up in 1959. It recommended the creation and
use of sounding rocket launching facilities in the equatorial region in the southern
hemisphere, under UN sponsorship. The Department of Atomic Energy of the
Government of India created the Indian National Committee for Space Research in
1962. Indias space experience began in 1963, when it signed agreements with
NASA for training in assembling and launching sounding rockets. It established the
Thumba Equatorial Rocket Launching Station, and it launched a NASA-supplied
Nike-Apache rocket. Scientists from the U.S., USSR, France, Japan, Germany and
UK used the Thumba station for experiments.
2. See K. Kasturirangan, Space science in India: Two recent initiatives, Sir Jagdish
Chandra Bose Memorial Lecture, The Royal Society, London, 14 December 2004.
3. Peeters, W. 2002. Effects of commercialization in the European space sector, Space
Policy 18(3): 199204.
4. State of the Satellite Industry report, June 2007. Prepared by Futron Corporation
and sponsored by the Satellite Industry Association.
5. The Space Report, 2006, www.thespacereport.org. It was not unusual for companies
dealing in space related products to have an anchor tenant who provided a significant share of the revenues.

Antrix Corporation Limited: A Strategy for the Global Market

19

6. The Space Shuttle was initiated by NASA in 1972 as a reusable launch system. The
first flight was in 1981. Although 48 flights were projected at the beginning, NASA
was able to achieve only 24 by the 1980s. NASA rarely provides launch services for
commercial payloads.
7. The former USSR had pioneered this industry by putting Sputnik into orbit in
1957. This launch was quickly followed by the U.S. with the Explorer in 1958 and
the two maintained close rivalry. The nature of rivalry changed after the end of the
Cold War. Russias inability to support its program following the collapse of its economy led to initiatives by the U.S. that included utilization of Russian rockets and
launch facilities with the objective of protecting and preventing the proliferation of
sensitive technology.
8. Development and launch of satellites for military purposes are handled by a separate
organization in India, the Defense Research and Development Organization.
Launches were undertaken from civilian pads.
9. Shankar, U. 2007. The Economics of Indias Space Programme, Oxford University
Press, New Delhi.
10.Russia originally agreed to supply India with the engine and with the technology to
manufacture it in the future. Under U.S. government pressure, Russia consented only
to supply the engine for the Indian launch but declined to provide the technology.
11.With an eye towards securing a competent applicant pool, ISRO, in 2007, launched
an educational institution with a focus on space technologies. Its students committed themselves to work in one of the space establishments for a period of five years
after graduation.
12.Senior civil servants in India are usually members of the permanent Indian civil service. The Department of Space is one of few exceptions. While the Secretary is a technocrat, at the next level, the Additional Secretary is from the civil service.

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Case Research Journal Volume 28 Issue 3 and 4 Summer/Fall 2008