AbstractThis paper is partly a tutorial, telling systematically how one goes about calculating the total annual costs of a satellite communications system, and partly the expression of some original ideas on the choice of parameters so as to minimize these costs.The calculation of costs can be divided into two broad categories. The first is technical and is concerned with estimating what particular equipment will cost and what will be the annual expense to maintain and operate it. One starts in the estimation of any new system by listing the principal items of equipment, such as satellites, earth stations of various sizes and functions, telemetry and tracking equipment and terrestrial interfaces, and then estimating how much each item will cost. Methods are presented for generating such estimates, based on a knowledge of the gross parameters, such as antenna size, coverage area, transmitter power and information rate. These parameters determine the system performance and it is usually possible, knowing them, to estimate the costs of the equipment rather well. Some formulae based on regression analyses are presented. Methods are then given for estimating closely related expenses, such as maintenance and operation, and then an approximate method is developed for estimating terrestrial interconnection costs.It is pointed out that in specific cases when tariff and geographical information are available, it is usually better to work with specific data, but nonetheless it is often desirable, especially in global system estimating, to approximate these interconnect costs without recourse to individual tariffs. The procedure results in a set of costs for the purchase of equipment and its maintenance, and a schedule of payments. Some payments will be incurred during the manufacture of the satellite and before any systems operation, but many will not be incurred until the system is no longer in use, e.g. incentives. In any case, with the methods presented in the first section, one arrives at a schedule of costs and payments for all the items and the years in which they will be incurred. The second category of costing problems is one of financing or engineering economics. All the costs are first “present valued” to some reference period using rates of return appropriate to the particular situation.One finally arrives at sets of annual costs which can be used as the basis for setting lease costs or revenue requirements and tariffs. The correspondence between methods using discounted rates of return and capital recovery formulae on one hand and those using various depreciation schedules, such as is typical of regulated industries on the other hand, is discussed.The remainder of the paper is devoted to discussing the relationship between critical parameters, such as replacement schedules, design lifetime, satellite power and Earth station antenna size, and the overall costs.It is shown that optima for these parameters may exist and can be calculated. In particular, the optimization of satellite replacement schedules to minimize the present value of total investment over a very long period is presented, along with simplified versions of the theory suitable for system planning.The choice of EIRP is also discussed and a procedure for choosing the value that minimizes the costs is shown.


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    Title :

    Economics of satellite communications systems


    Contributors:

    Published in:

    Acta Astronautica ; 8 , 11-12 ; 1321-1341


    Publication date :

    1981-05-05


    Size :

    21 pages




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    English



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