It is not common for a service or technology to result in extreme opinions, like was the case for the LEO satellite constellations. Some people may even say that no constellation has been able to prevent bankruptcy. While other people also think that LEO satellites will get rid of the divide associated with the Global Digital. The LEO satellite constellation will not fail. However, it’s a business case quite delicate, and it will not have unrealistic expectations. They can succeed, but it will require planning, patience, and a careful design. This piece discusses five critical elements that are important for LEO to succeed. Four factors are related to cost, while the remaining one is about the expected number of subscribers contributing to the revenue.
Predictability of costs
Large companies with many satellites, thousands of them, including Kuiper and SpaceX, have a target. It aims to streamline the production process. That enables them to bring the costs personalized to less than $1 million—considering that the satellite life cycle is between 5 to 7 years. Equally important, the business life cycle is 20 years. Plus, the satellites manufactures are at least three to four times the constellation size.
Unpredictability of other costs
Starting any service in another country would require a new country-specific ground station regardless of the subscribers expected in that new base. When you reduce the figure of ground stations and introduce inter-satellite links (ISL), adding weight and the power requirements increases the cost in the long run. It results in a delicate trade-off and is optimized in the use case context like consumer access.
Realization plays a vital role in determining any constellation’s success. In this case, the estimated utilization factor ranges between 4 and 25%. It represents a critical shortcoming of the LEO concept and means that a particular location’s requirement needs a larger constellation to meet the demand.
One stands a chance to win
A great scenario is the LEO satellite 2 GHz downlink user spectrum which supports 3000 to 20000 subscribers. Therefore, having a 4000 satellite constellation that is producing 100 and Mbps service. Its capacity is enough to serve between 3 million to 20 million subscribers. That’s a figure you can bank on for a business case success.
Patience is crucial if you want to win
Patience is not an option for investors as far as the LEO constellations’ business case’s mechanics is concerned. As much as financial capability is good, following your plan to the letter is even more crucial.