autumn2004 © university of surrey satcomms a - part 5 - b g evans 5.1 satellite communications a...

Autumn2004 © University of Surrey SatComms A - part 5 - B G Evans 5.1

Satellite Communications APart 5

The Satellite Business, financing & planning

-Professor Barry G Evans-

EEM.scmA


Contents

1. The players and the business

2. Financial elements of the business

3. Costs and finance –PVC and IRR methods

4. Funding and risk assessment

5. Business planning


The satellite business

1. The players and the business


(1) Elements of the business

• Manufacturing/engineering –space, ground, networks

• Launchers –US, European, Chinese, Japanese• Marketing and sales• Operations of satellites• Service provision and billing• Operation and maintenance ground segment• R&D• Regulatory, legal and institutional• Consultancy –coordination, tenders, etc.


(1)Size of the business

• 180 international operators of satellites

• 3-4000 transponders in Geo

• Global market $200B (2000)

• Satellite industry revenues $83B

• Satellite service revenues $37B

• Revenues will go from $100B in 2001 to $300B in 2010


(1) The big players

• Manufacturers– Boeing (incl. Hughes)– Lockheed Martin– Loral– Astrium (MMS/DASA)– Alcatel space (Alcatel/Thales/Dassault/Aerospatiale)

• Operators– Intelsat + New Skies– Inmarsat– Eutelsat– Panamsat– Astra Global


(1) The big players (cont’d)

• Launchers– Boeing– ILS– Arianspace


(1) Strategic partners


(1) Does it make money?

Return or Capital %

1995 revenue$M

Intelsat 17 805

Eutelsat 15 67

Inmarsat 24 340


(1) AsiaSat earnings model 1996-1999

Revenues HK$ million 1996 1997e 1998e 1999e

AsiaSat 1 318 341 39 41

AsiaSat 2 436 585 668 711

AsiaSat 3 0 0 544 581

AsiaSat 4 0 0 0 0

Deferred Revenues 70 31 10 3

Total revenues 824 957 1,261 1,336

Cost of services 43 46 49 53

Depreciation and amortizations 261 277 391 328

Selling, general and administration 69 71 74 78

Insurance premiums 39 39 70 70

Total costs 412 433 584 529

EBITDA 673 802 1,068 1,134

Pre tax profit 399 473 588 716

Net profit 395 464 576 702


(1) Where does it make money?

• FSS Systems– IP provision (30-40%)– TV distribution

• DTH/DBS– Eutelsat/Astra Europe (80% European digital TV delivered

by satellite)– DirecTV/Echostar in USA (43% digital services and

growing)

• Mobile– Inmarsat –only 200,00 customers- niche market but

successful


(1)

• Where didn’t it make money– Big LEO’s

• Constellation cost $3-10B• (Iridium/Globalstar/ICO)

– Little LEO’s• Orbcom (<$1B)

• Will it make money?– Geomobiles

• ? Aces/Thoraya $1B

– Multicast/broadcast• ? DMB services

– Broadband• Spaceway }• Skybridge }• Euroskyway }

$1-10B?



2. Financial elements of the business


(2) Business plans

• Conditional on funding• Costs and revenues over time• Likelihood of making a profit• Assumptions and sensitivities


(2) Costs

• Setting up system– Preparation of business plan, co-ordination, regulations,

clearances and licenses– Design, spec, build satellites– Launch and insurance– Design, spec, earth-segment– Installation earth-segment


(2)

• Operating system– TT&C and operations staff– Maintenance satellite/earth-segment– Billing– Planning– R&D

• Factors– Lifetime 10-15 years– Number of transponders– Satellite coverage/position


(2) Revenues

• Type of traffic required by market• How well use transponders• How well placed satellites w.r.t. market• Tariffs w.r.t. competition


(2)

• Example– Typical satellite 85 US$M– Launch cost 85 US$M– Insurance 20 US$M– TT&C 5 US$M– Expenses 5 US$M– TOTAL 205 US$M


(2)

• Example (cont’d)– Satellite has 30 transponders– Revenues $1-2M per year– Seems reasonable that over 10 year life will make a profit– Costs are up-front; revenues are down-stream.

How can we take account of time values of costs and revenues (money)?


(2) Satellite project timescale


(2) Costs and finance

• Capital cost– Satellites– Launch vehicles– Ground segment

• Operating expenses– Transponder capacity– People– Marketing– Depreciation


(2) Billions out – billions in?

-1000

-800

-600

-400

-200

0

200

400

600

800

1000

-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12

Year

$M

Capital Op Ex Income


(2) Satellite capacity

• Most projects will not need to procure satellites or launches

• Instead they will lease capacity from existing satellite operators

• You can either negotiate directly with satellite operators

• Or you can utilise one of the new ‘electronic trading floors’ for example…. – http://www.e-sax.com (the London Satellite Exchange)– http://www.satcap.com (SatCap)

http://www.e-sax.com/

http://www.satcap.com/


(2) Transponder prices

• Transponder prices are variable and have been falling recently

• Europe Ku-band: ~US$7000/MHz/month– I.e. ~ US$3M per annum per 36MHz

• Africa C-band: ~US$4700/MHz/month– I.e. ~ US$2M per annum per 36MHz

• This probably represents the high end of the market and there will be discounts for bulk and commitment

• There will be much cheaper options!– E.g. Russian satellite capacity (<US$1M per annum??)


(2) Typical transponder lease charges

Asiasat-1 $2.0M per year 5 year lease with annual increase

C band 36MHz


C band 36MHz


Ku band 36MHz

Intelsat 7 $1.2M per year 10 year lease non preemptible

C band 36MHz Hemi/Zone/Spot


C band Global


Ku band Spot

Eutelsat ECU1.7M 6 month lease non preemptible

Ku band 40MHz

Eutelsat ECu960K 6 month lease non preemptible

Inclined orbit satellite



3. Costs and finance – the time value of money


(3) Net present value (1)

• Or the Time Value of Money• Would you rather I give you £100 today or in 5

years time?• Would you rather pay me £100 today or in 5 years

time?

• Cash today has a higher value than cash tomorrow• How to value a long-term project?


(3) Cost over time

• Telecoms projects have long life times 10-20 years• Large investments up-front £1M-£B• Revenues down-stream over many years• Operating and equipment costs as well as

depreciation spread over life time of project• Need to combine costs/revenues in a single plan• Make decisions on whether to go ahead or which of

several methods to implement project



• The cumulative cash value of a project may be misleading

• “Discount” all income and expenditure back to the ‘present’ (conventionally ‘year zero’ defined as the start of trading)

• The present value (PV) of each income and expenditure allows a meaningful comparison to be made

• NPV is the sum of all PVs of incomes and expenditures.


(3) Compounding and discounting


(3) Discounted cash flow

• PV of sum in the future is subject to a discount rate• E.g. in year n (£1is worth)

• Discounting allows cash in the future to be moved backwards in time –discount rate

• Compounding allows cash now to be moved forwards in time –interest rate

• Choice of the rate ‘r’ is crucial and will be a mix of interest/inflation rates

• Projects sensitive to rate chosen –do sensitivity analysis

n r=4% 8% 12% 16%

10 0.676 0.463 0.322 0.227

20 0.456 0.215 0.104 0.051


(3) Example 1

94.51

)14.01(

100

1

5

nn

nr

SPV

• What is the PV of £100 received in 5 years time if the discount rate is 14%?



• Formula– Present Value of a sum S received at the end of the year

n for a discount rate r is:

– Hence Net Present Value of a sequence of payments at the end of each year 1 …N is:

nn

nr

SPV

1

N

nn

n

r

SNPV

1 1



• Often use “discounting tables” to find NPVor use the Excel NPV() function!

Value in Year 0 of 1 unit in year: 0 1 2 3 4 5 6 7 8 9 10 11 12 13 10 1.00 0.91 0.83 0.75 0.68 0.62 0.56 0.51 0.47 0.42 0.39 0.35 0.32 0.29

R 11 1.00 0.90 0.81 0.73 0.66 0.59 0.53 0.48 0.43 0.39 0.35 0.32 0.29 0.26

a 12 1.00 0.89 0.80 0.71 0.64 0.57 0.51 0.45 0.40 0.36 0.32 0.29 0.26 0.23

t 13 1.00 0.88 0.78 0.69 0.61 0.54 0.48 0.43 0.38 0.33 0.29 0.26 0.23 0.20

e 14 1.00 0.88 0.77 0.67 0.59 0.52 0.46 0.40 0.35 0.31 0.27 0.24 0.21 0.18

15 1.00 0.87 0.76 0.66 0.57 0.50 0.43 0.38 0.33 0.28 0.25 0.21 0.19 0.16

(%) 16 1.00 0.86 0.74 0.64 0.55 0.48 0.41 0.35 0.31 0.26 0.23 0.20 0.17 0.15

17 1.00 0.85 0.73 0.62 0.53 0.46 0.39 0.33 0.28 0.24 0.21 0.18 0.15 0.13

18 1.00 0.85 0.72 0.61 0.52 0.44 0.37 0.31 0.27 0.23 0.19 0.16 0.14 0.12



• Note that income and expenditure is assumed to come at the end of each year

• If there is any cash flow at the start of the first year (i.e. end of year 0) it is added in ‘undiscounted’

• Choice of discount rate is critical– Dependant on risk– Dependant on inflation/bank interest rate– Traditionally satellite projects have looked for a 14%

return


(3) Cash flows related to base year


(3) Cash flow diagram


(3) Sensitivity analysis


(3) Costs and revenues


(3) Internal rate of return

• Allows comparisons of the financial return of multiple projects

• The discount rate at which the NPV=0• Only computable for a project in which there are

both incomes and expenditures– Excel has an IRR() function which is much simpler to use

than trying to iteratively calculate NPVs using PV tables!


(3) Example 2

• I spend £500 today and then receive £110 at the end of each of the next 5 years; the discount rate is 12%; do I make a profit?

• What is the IRR?• From discount tables, PV multipliers for years 1 to 5

are 0.893, 0.797, 0.712, 0.636, 0.567• NPV= -

500+(0.893x110)+(0.797x110)+(0.712x110)+(0.636x110)+(0.567x110)=-103.45

• IRR=3.263% (using Excel!!)


(3) Comparison projects

• Use Net Present Value (NPV)• Discount each item cost or revenue to base year• To be profitable NPV must be +VE• Project plan with largest NPV is most profitable• Also use ‘internal rate of return’ (IRR)

This is discount rate which makes the NPV=0• Plan with largest IRR is the best• IRR’s range 20-30% acceptable• Also payback period is No. years to NPV=0


(3) Example of comparison using NPV

• Owning versus leasing– Costs with time (NPV or IRR)– Sensitivity to discount rate and traffic predictions– Security and availability– Politics

• Trade agreements• Alignments• Kudos


(3)

• Leasing versus purchase


(3) IRR applied to leased transponder

• Satellite transponder lease $2M per year• Start-up costs $5M• What revenue profile must be targeted to achieve

IRR of 20%?


• VSAT network Hub + 100VSAT’s• Add 20vsats/year –up-front hub + infrastructure

• NPV and IRR (r’fn NPV=0)• IRR tells you how quickly pay back• Balance revenue profile with build up of VSATS to achieve IRR acceptable to financers• Note revenue in early years dictates IRR

(3) Example of use of IRR to evaluate project

Revenue

Costs

Revenue profile

TimeSat retr..VSATs+0.9M

Hub

Project


(3) Exercise: Financing

• A developing country wishes to provide telephone capacity over a 5 year period as follows:

• The two options are:– (i) a dedicated satellite system (NEWSAT)– (ii) leasing capacity from INTELSAT

• The characteristics of the two options are as follows:– Dedicated satellite (NEWSAT)

• Transponder bandwidth = 36MHz• No. of transponders/satellites = 24• Transponders are bandwidth limited• Satellite cost = $150M/satellite• Launch cost = $100M/satellite• Insurance cost = 25% of satellite + launch costs• Operations cost = $1.2M per year

– INTELSAT lease• Transponder bandwidth = 36MHz• No. of carriers supported/transp.= 280• Annual lease charge = $1.5M

• The communications are via SCPC carriers with 30kHz allocated bandwidth.

• Assuming a financial discount rate of 14% as follows:

• Determine which solution is to be preferred.

Year 0 1 2 3 4 5

Circuits 2,411 5,125 7,840 10,550 13,270 15,984

Year 0 1 2 3 4 5

Value of 1 Unit

1 0.88 0.77 0.67 0.59 0.52



4. Funding and risk assessment


(4) History of satellite financing

• Government established organisations• Purpose was to provide public service obligations• Each government chose a single local

telecom/satellite operator to invest• Investment was made by signatories according to

usage, once established• Example organisations are Inmarsat, Intelsat and

Eutelsat


(4) Funding

Tax MarketFunding

Consumers

SingleGovernment

GovernmentConsortia

Number ofCustomers

Military

Sputnik

Research

Intelsat

Eutelsat

PanAmSatGlobalstar

ICOIridium


(4) Inmarsat

• Inter governmental organisation

– Established to provide GMDSS– Operates as sole provider global

mobile communications (prior to Iridium)

– Signatories invest in proportion to usage of the system

– Signatories have unlimited liability– Decisions are made on the basis

of signatory consensus

Assembly of parties

Council

Directorate

84 governments

22 representative signatories (of the 84 signatories)

Management of Inmarsat’s operations


(4) Need for restructuring

• The primary reasons for the restructuring of these organisations are– Need for investment

• Usage of system is not related to capacity to pay

– Need to move away from consensus management• Owners manage business by consensus

– Political reasons• Pressure to allow competition and open investment


(4) Inmarsat – post transition

• Unlisted public limited company

– Public service obligations are enforced by IGO through golden share

– Managed by Board of Directors– Shareholders have limited liability– Corporate structure allows more

flexible investment and access to capital markets

Shareholders

IGO

New Inmarsat

84 shareholders

Board of Directors

Golden share


(4) Types of funding

• Equity– Shareholders– No profit = no return (dividend)– Higher risk– Costs more

• Debt– Banks and bonds– Lower risk– Cheaper– Risk related to level of Gearing– No profit = interest payments


(4) Types of capital

Typical annual return

Low risk

Debt Bank debt/investment grade bonds

LIBOR

High yield LIBOR+5%+

Quasi debt/equity

Mezzanine financing Interest coupon and equity option

Quoted equity FTSE returns

Equity Venture capital 30%+

Private/seed capital 50%+


(4) Comparison of capital markets finance

Equity High yield Mezzanine Bank debt

Issue size Effectively unlimited

US$100-500m Up to US$175m Effectively unlimited

Maturity Perpetual 7-10 years 7-10 years 6-9 years

Coupon Dividends Fixed Fixed Floating

Covenants None Moderate Restrictive Restrictive

Security n/a Typically unsecured

Secured Secured

Early redemption features

n/a After 5 years (penalty)

At any time (usually no penalty)

At any time (at a premium)

Principal repayment

n/a Bullet Bullet Amortisation or bullet

Effect on existing equity

Dilutive None May be dilutive none


(4) Emergence of high yield

• High yield debt is a classification for sub-investment grade bonds (i.e. rated Ba1/BB+ and below Moody’s and S&P)

• Investors in the high yield market do so to achieve returns in terms of– High coupon

– Improvement in credit rating

• Ideally suited for start up companies that are perceived as high risk and wish to minimise dilution

High yield debt insurance by year

440 335 275845

4,700

0

1,000

2,000

3,000

4,000

5,000

1993 1994 1995 1996 1997

(US

$m)


(4) Process of an Initial Public Offering

Analysis of business plan

Due diligence ValuationDevelop

investment case

Publish research

Pre-marketing to institutional investors

Issue prospectus

Roadshow

BookbuildingPricing/demand

allocation

Trading Day 1Stabilisation “greenshoe”


(4) Typical satellite project – free cash flows


(4) Current market conditions

• Recent correction in equity markets has driven investors towards quality earnings and strong brands

• Investors have less appetite for companies with negative earnings

• For future satellite financing to be successful, investors will have to have made money with the current projects

• Any further bad news will seriously jeopardise any future MSS or broadbond satellite financing


(4) Satellite business risk

• Technical• Financial• Market


(4) Technical risk

• Identification– Launch vehicle– Satellite– Ground segment

• Mitigation– Early adopter vs. follower– % of new technology– Insurance


(4) Financial risk

• Identification– Project timetable

• Overruns• System definition to service introduction

– Budget overrun– Sensitivity analysis

• Mitigation– Risk sharing

• Joint ventures

– Experience• People• Strategy• History of results


(4) Market risks

• Identification– Demand/supply and size of market– Market access– Delay to market– Competition

• Law of unintended consequences…• “every action has an equal and unexpected reaction!”

– Take up rate

• Mitigation– Market segmentation– Conservatism


(4) Risk vs. reward

Low Reward High

High

Risk

.comStartup

RetailBank

SatelliteProject

?

?


(4) Dealing with risk

• Be aware of it!• Analyse

– Make a realistic assessment– Sensitivity analysis– SWOT analysis can help

• Manage– Plan for contingencies

• Know when to say NO!– Be prepared not to proceed with a project if the risks are

assessed as too great



5. The Business Plan


Idea!

(5) Converting Ideas into Businesses

Technical Regulatory

Market

Finance

Risks

Planning

Environment


(5) Business Planning Cycle

StrategicDirection

BusinessPlan

Implementation

Monitor &Review


(5) Strategic Direction

• “Mission statement”– Currently in vogue– Succinct focus on activity

“To be the World’s leading global satellite multimedia network provider offering a full range of high-quality services to our customers worldwide with the financial objective of increasing shareholder value while providing value for money and remunerating our people fairly in line with best practice.”


(5) Planning

• There are many approaches to planning• BUT really you just need to answer the right questions!• Kipling’s “Six Honest Serving-men”…

– What?– Why?– When?– How?– Where?– Who?

• These questions are an excellent structure for business planning!


(5) Implementation

• This part is down to you…• You have developed a plan now…• Raise the finance• Find and hire the people• Develop and sell your product or service

• Make money!

Hopefully!


(5) Monitor and Review: Objectives

• Monitoring is crucial– How else do you know if you’ve succeeded!

• Planning objectives should be:

SMART• Specific• Measurable• Achievable• Realistic• Timed


(5) Developing the Business Plan

• Developing the business plan is probably the most critical element of the planning cycle

• The plan will tell you how to implement your objectives in an organised way

• The remainder of this lecture will study the preparation of the details of the business plan

• Focus will be on tools and techniques


(5) The Project

• Five interlinked parallel processes:– Technical

– Regulation

– Finance

– Corporate

– Market


(5) Technical

SatelliteCustomer Terminals

Ground NetworkLaunch VehiclesInterconnections

Gateway Terminals

Capacity

Build or buy?

Qualityvs.

Cost?

Newvs.

Tested?


(5) Regulation

International (ITU)and Domestic

RegulatoryFramework

SpectrumLicence

Spectrumand Orbit

Availability?

Service Licence

(landing rights)


(5) Finance

Strategic Alliances

Joint Ventures

Partners

Equity

Quasi-Equity

Debt

Cash Flow

Risk


(5) Corporate

CorporateGovernance

LocationTax

Structure


(5) Market

Solution

CustomerRequirements

MarketSize

Marketing

Price

Competition

Distribution

Billing


(5) Five Interlinked Parallel Processes

SatelliteCustomer Terminals

Ground NetworkLaunch VehiclesInterconnections

Gateway Terminals

Capacity

Build or buy?

Newvs.

Tested?

Qualityvs.

Cost?

International (ITU)and Domestic

RegulatoryFramework

Spectrumand Orbit

Availability?

SpectrumLicence

Service Licence

(landing rights)

Strategic Alliances

Joint Ventures

Partners

Equity

Quasi-Equity

Debt

Cash Flow

Risk

Solution

CustomerRequirements

MarketSize

Marketing

Price

Competition

Distribution

Billing

CorporateGovernance

LocationTax

Structure


(5) The Market

• Understanding the market is a key part of the planning process

• Analysing the market means understanding:– The demand for your product or service– Your ability to satisfy the market demand– The competition– Your expected share of the addressable market– Price sensitivity– Launch timing


(5) Market Analysis Steps

• Marketing audit– Internal factors – the company environment– External factors – market research

• SLEPT analysis• SWOT analysis• Strategic marketing plan

– Product performance– Pricing and profitability– Product positioning– Launch activities and timing– Advertising and promotion


(5) SLEPT Analysis – The market environment

• Social and cultural– Structure of society– Family life, education– Demographics, language, values, beliefs

• Legal and institutional– Operating restrictions– Licensing regulations– Spectrum allocation policy

• Economic– GDP, state of economic development– Per capita income, disposable income– Currency & exchange rate stability


(5) SLEPT Analysis (2)

• Political– Political risk factors (e.g. stability of government… very

important)– Trade barriers– Tariff barriers– For satellite projects local sensitivities to non-domestic

broadcasts are very important

• Technical– How the service will be used– Infrastructure support– Specific local conditions


(5) SWOT Analysis

• Strengths– The internal strengths of the organisation

• Weaknesses– The internal weaknesses of the organisation

• Opportunities– The external opportunities of the business

• Threats– The external threats to the business


There are many marketing tools…

• Balanced score cards• Benchmarking• BCG matrix• Competitor profiling• Concurrent engineering• Core competencies• Customer satisfaction surveys• Discounted cash flow• Delphi techniques• Dynamic simulation models• Environmental scanning• Experience curves• Gap analysis• Integrated value chain analysis• Kaizen and Kanban• Learning organisation• Life cycle analysis• Market value added

• Mission statements

• Nominal group technique

• 4-Ps

• 5-Forces (Porter)

• 6-Sigma

• 7-Ss

• PIMS analysis

• Portfolio analysis

• Psychographics

• Quality circles

• Re-engineering

• Scenario planning

• Shareholder value analysis

• Strategic planning

• SWOT analysis

• Technology S-curves

• Value chain analysis

• Visioning

Source: Management Tools & Techniques, Bain & Co. & Strategic Planning Society, 1994


(5) Creating Market Space

Present Needs

Latent Needs(customer unaware)

Future Needs

Manifest Needs(customer aware)

Lead UserStudies

SatisfactionSurvey

ObservationalStudies


(5) Putting it all together…

• Having done al this analysis and work sit down and write the…

Business Plan


(5) The Business Plan (1)

Typical Business Plan headings…• 1. Introduction • 2. Business objectives

– 2.1 Have all the relevant factors been considered and has the business been defined in a sufficiently specific manner?

– 2.2 Can the business compete in the marketplace? – 2.3 Can operations be initiated in a timely fashion to

meet the aspirations of the most attractive markets?



• 3. SWOT analysis • 4. Strategic marketing plan

– 4.1 Market drivers and inhibitors • 4.1.1 Market drivers - supply side

• 4.1.2 Market drivers - demand side

• 4.1.3 Market inhibitors - supply side

• 4.1.4 Market inhibitors - demand side

– 4.2 Target addressable markets – 4.3 Market size and trends – 4.4 Market assessment assumptions / total addressable markets – 4.5 Competition, satellite addressable markets and market share



– 4.6 Estimated market share achievable – 4.7 Strategic marketing plan

• 5. Summary of service and network definitions – 5.1 Traffic models – 5.2 Total traffic estimates – 5.3 Space segment resource estimates

• 6. Financial analysis – 6.1 Highlights – 6.2 Projected capital requirements – 6.3 Pricing – 6.4 Projected gross annual revenue, costs, profit and loss

• 6.4.1 Projected gross annual revenues 6.4.1.1 Cost of Revenue 6.4.1.2 Gross margin

• 6.4.2 Projected gross annual operating expenses



– 6.5 Price flexibility – 6.6 Projected cash flow statements, NPV and

IRR – 6.7 Sensitivity analyses

• 7. Overall conclusions and recommendations


(5) Conclusions

• Planning is the key to success

• Make use of relevant and appropriate tools and techniques

• BUT be aware of their limitations

• Develop plans appropriate to your needs

• Be aware of and plan for the risks

• Follow the planning cycle

• Keep plans up-to-date


Exercise C – Business Case

• A developing country wishes to provide telephone capacity over a 5 year period as follows

• The two options are– (i) a dedicated satellite system (NEWSAT)– (ii) leasing capacity from INTELSAT

• The characteristics of the two options are as follows:– Dedicated Satellite (NEWSAT)

• Transponder bandwidth = 36MHz• No of transponders/satellite = 24• Transponders are bandwidth limited• Satellite cost = $150M/satellite• Launch cost = $100M/satellite• Insurance cost = 25% of satellite + launch costs• Operations cost = $1.2M/year

Year 0 1 2 3 4 5

Circuits 2,411 5,125 7,840 10,550 13,270 15,984


Exercise C – Business Case (cont.)

– INTELSAT Lease• Transponder bandwidth = 36MHz• No of carriers supported/transponder = 280• Annual lease charge =$1.5M

• The communications are via SCPC carriers with 30kHz allocated bandwidth.

• Assuming a financial discount rate of 14% as follows:

• Determine which solution is to be preferred.

Year 0 1 2 3 4 5

Value of 1 unit 1 0.88 0.77 0.67 0.59 0.52

autumn2004 © university of surrey satcomms a - part 5 - b g evans 5.1 satellite communications a...

Documents

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b revenues

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b satellite service

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satellite business

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