Perspectives on the satellite services industry : analysis of challenges and opportunities in the market, policy and regulatory environments

Abstract

This thesis focuses on Space Communications and combines engineering, economics, market, and policy analyses to identify challenges and opportunities in the industry that are beyond the scope of any one isolated discipline. This work is divided in two parts. The first part begins by discussing the background of the communications satellite industry, its value-chain, service applications, history and evolution, and then explores two questions of significant importance to the survival and sustained growth of this industry: 1) are satellite communications solutions competing or complementary alternatives to terrestrial networks-in what context and for what service applications? And 2) what are the characteristics of the regulatory and policy environments and how do they affect the satellite communications industry? In order to address the first question, a framework to analyze the tradeoffs associated with satellite versus terrestrial solutions is developed around three axes: type of solution, service application, and geographic market. It is then argued that satellite solutions and terrestrial networks have a dual character: they are simultaneously competing and complementary technologies. The case is made that satellite solutions have important competitive advantages for voice and data transmission in rural markets and urban areas where terrestrial networks are not available. It is found that consumer video applications represent the most dynamic market with the highest potential of growth for satellite operators. Then, to assess the impact of the regulatory and policy environments, two key regulatory issues are discussed: spectrum/orbit allocation and spacecraft disposal. First, major conflicting issues in frequency bandwidth allocation are discussed.

(cont.) Second, it is argued that there is a critical need to enforce space debris regulations, even though such regulations would have short-term negative financial implications for satellite operators. The case is made that a single collision in geostationary orbit (GEO) is likely to create a cascading debris field that can impact the entire fleet of spacecraft in GEO, resulting in significant loss of satellite communications services. In addition, it is found that the U.S. space communications policy is highly flexible, while on the European side there is a need to consolidate and further ease the regulatory environment in order to promote competition. It is argued that more international cooperation in regulatory issues is desirable. The second part of this thesis focuses on the lifeblood of the satellite industry: the satellite itself (as opposed to the industry-context explored in Part 1). In particular, part II explores issues associated with satellite design lifetime. Qualitative arguments are presented for reducing or extending a spacecraft design lifetime, as seen from different stakeholders' perspectives (the manufacturer, the customer, and society at large). Quantitative analyses are then conducted from an operator's perspective, and preliminary results indicate that optimal design lifetimes do exist that maximize a satellite financial/value metric. These results disprove the traditional assumption that satellite operators (customers) are always better off acquiring spacecraft designed for the maximum technically achievable lifetime. Additionally, it is argued that design lifetime is a powerful lever that can impact the market size as well as the financials of the key players in the space sector. Overall, it is shown that the specification of a system's design lifetime requires much more attention than it has received so far in the literature, as it can impact an entire industry value chain.