By Matsuzoe Ryosuke and Watanabe Naoki, Nikkei staff writers

TOKYO — Japan’s successful launch of a rocket into orbit Tuesday paves the way for the country to fully enter private-sector launch services, as IHI Aerospace moves ahead to snag orders from Southeast Asia.

The solid-fuel Epsilon lifted off at 9:55 a.m. from the Uchinoura Space Center located in Kagoshima Prefecture on the southern tip of Kyushu. Tuesday marked the fifth straight successful launch of the rocket since its first in 2013. The fourth launch in 2019 carried seven small satellites into orbit, while the latest carried nine.

Now the Japan Aerospace Exploration Agency (JAXA), which developed the Epsilon, is preparing to transfer operations of the rocket to IHI Aerospace, giving Japan a major presence in the global private-sector launch business.

Demand is growing for small satellites for monitoring conditions on the ground and telecommunications. SpaceX, led by Tesla CEO Elon Musk, is now deploying myriad small satellites in its Starlink communications service that has begun trials in the U.S. and elsewhere. Amazon.com, meanwhile, announced on Nov. 1 its intention to offer a satellite-based internet service.

The Epsilon is 26 meters long and capable of carrying a payload of about 500 kg. This puts it between the 1 ton that can be carried aloft by such heavy-lift vehicles as the next generation H-III rocket being developed by the JAXA-Mitsubishi Heavy Industries partnership as well as SpaceX’s Falcon 9 and the small-lift vehicles being developed by startups that include America’s Rocket Lab and Japan’s Interstellar Technologies.

“Its solid fuel enables immediate flight and is easy to handle, making the rocket very convenient,” said Masashi Minato of IHI Aerospace, comparing the Epsilon with other vehicles offered by SpaceX and others that can carry more than a 100 satellites. The selling point for the Epsilon will be the flexibility it offers by its ability to launch a satellite quickly.

JAXA plans other launches of the rocket next fiscal year. From 2023, it will introduce the advanced Epsilon S. This will share parts with the H-III as well as electronic components that are used in automobiles in a drive to cut costs. Once a proof of concept model is launched, JAXA expects to transfer the vehicle to IHI Aerospace by 2024.

Transfer to the private sector is designed to reduce cost and strengthen international competitiveness. The Epsilon already has rivals in the U.S. where startups Relativity Space and Firefly Aerospace are making full use of 3D printers to keep expenses down. In order to be competitive, it is estimated that the Epsilon should cost about $22 million per launch, around half its current level.

Developing applications for the rocket’s services will be crucial. To reduce costs, more orders are needed to meet a certain level of launch frequency.

Up to now, the Epsilon has primarily launched satellites as well as instruments used in fundamental research for Japan. IHI Aerospace plans to develop customers in Indonesia, Thailand, Malaysia and other Asian markets, snagging orders from countries and startups. JAXA has a satellite launch order from Vietnam to be carried on the proof of concept vehicle in 2023. But a full-fledged push is required to snag orders from 2024 on.

IHI Group has a strategy that integrates applications to create new businesses. Its long-term weather forecasts from two weeks to two months out are used to predict crops and power demand, for example, or in maritime shipping.

As demand grows for satellite launches, more Japanese companies are entering the fray. Honda Motor announced in September it will develop a small rocket, while the Sony Group says it is developing a business that would allow consumers to take images from satellites. Space One, a Tokyo-based startup, plans to build a launch site for small rockets in Wakayama Prefecture.