SATCOM struggles to compete with the highest value terrestrial alternatives on most, if not all sources of value, in areas where they compete head-to-head. However, the entire world is not served by high-speed fiber optic cable. Cellular wireless technologies may well approach or exceed the capabilities of SATCOM at some point in the future. So, the fundamental question remains, how do you make money off the market that remains, given the inexorable march of terrestrial technology? The markets will be only those areas not likely to be served by terrestrial systems in the next 10 years. However, much of the unserved area is very underdeveloped, and neither the governments nor the population have the economic means to pay very high rates. Alternatively, there are remote and mobile users, think resource extraction industries, maritime, and aeronautical, who have the need and the capacity to pay. But is that enough of a market?
In this discussion, we will consider the two alternatives of GEO HTS satellites and LEO constellations for a single year in 2030. For system capacity requirements use the information provided in the Broadband High-Throughput Satellites ( Library – Springer)Links to an external site. chapter.
You will also need to download and use the Module 7 Discussion Spreadsheet (XLSX). Download Module 7 Discussion Spreadsheet (XLSX).The spreadsheet is best viewed in Microsoft Excel® where you can view both tabs for all of the data and information.
In this discussion we will look at the steady state profitability of the two approaches:
For the GEO HTS system, select one country or region.
For the constellation system (PlanetLink) you may select any 10 countries, but geopolitics proscribe you from operation in Russia and China.
Discuss which solution is more profitable:
Both GEO and constellation systems will not be competitive in regions served by terrestrial fiber or 5G. Therefore, the simplified assumptions are:
Countries with greater than 80% of the population in urban areas will not be profitable.
In non-urban countries capture rate will be no greater than 10% of total non-connected households.
Customers cannot pay more than 5% of per capita GDP for services, but in no case will the customers pay more than $100/month.
Services are sold by the household, assuming four (4) people per household.
Assume all non-recurring costs have been absorbed from 2025-2030 and that the constellation is fully deployed in 2030.
Both systems
Must pay 10% cost of capital to their investors each year.
Per capita usage is 8gb/day (Please view the Module 7 Discussion Spreadsheet linked near the beginning of the directions.)
GEO HTS satellites, assume the following:
Have 200 spot beams each of which covers 1500km diameter footprints. You may spread these beams over as many countries as you like but they must all remain on the same continent.
The system total capacity is limited to 1 Terabyte.
Systems-level cost of $300 million including launch.
The operations cost for a single system is $50m/yr.
For the very large constellation (Planetlink). Assume the following:
A constellation of 4,000 spacecraft each of which costing $2.4m a satellite but could cover the entire globe. Launch costs will be $50m. And each launch carries 50 satellites.
It has a total system capacity of 10 TBS.
Ground antennas cost $1000 each. Each household pays $500 for an antenna, the company absorbs the remainder of the costs.
The operations cost for the system is $50m/yr base costs plus $10m/yr for each country in which they are operating.
Select no more than 10 countries.
Sensitivity – Discuss which approach is more sensitive to the following changes in assumptions:
Risk and cost of capital: equity investors begin to flee to quality, and the cost of capital for goes up to 15%.
Regulatory risk: Planet Link runs into regulatory challenges and is only able to capture seven (7) countries.
Using the Module 7 Discussion Spreadsheet (linked near the beginning of the directions), discuss how robust each system is to growth in data usage in the selected countries.
There are several sites for data on population density. Please explore Our World in Data.Links to an external site. From the home page, you can search by “population density.” That will take you to a page with many data links and charts. Tracking population density and GDP will be particularly useful in this exercise.
Urban population vs. GDP per capita
Share of population using internet
Fixed broadband subscription per 100 people
After you have posted to the discussion, read and respond to at least two of your classmates’ postings and any comments by your instructor with constructive commentary. Your responses to your classmates should be thought-provoking and continue the conversation.
