OVERVIEW Founded in 1994 . Idea conceived by Craig McCaw.Purpose: Create a commercial broadband satellite constellation to bridge the digital divide.Key Stakeholders: Craig McCaw 21% Bill Gates 21% Motorola 26% Alwaleed 11% Boeing 4% Others 11%
THE PROJECTTechnology 288 LEO satellites in near polar orbits 12 orbital planes with 24 satellites each. Altitude – 700 miles 1200 Mbps downlink; 800 T1 lines per satellite. Satellite- satellite communication through fast packet switched ISLs. Nine ground stations for telemetry & satellite control. Lifetime – 10 years Contd…
Fast Packet ISL Uplink Downlink (1200 Mbps) Earth EarthINTERNET Station Station Gateway Terminal 2Mbps 64Mbps PSTN PC
KEY MARKETS Residential users of developed countries. Telephony and internet access in developing countries. Maritime and aviation industries. Multinational businesses with remote production and distribution facilities. Government : Telemedicine, Distance Learning, Military applications.
COMPETITOR ANALYSIS Skybridge • 80 LEO at 913 miles • Did not use ISL • Zero investment in R&D for inter-satellite links. Disadvantage: Extensive ground segment using bent pipe structures. Contd..
TECHNOLOGY COMPETITOR Geo-satellites • Less satellites required for coverage. • High latency (500ms) as compared to LEO (100ms). • Good for broadcast applications. HALO • Low latency. • Easy maintenance & upgrade. • Regulatory clearance to operate above major cities. Fiber Optics • High bandwidth & low latency • Deployment is time consuming & costly.
ADVANTAGES High Quality of service. Bandwidth on demand. High elevation prevents rain fade. Wide coverage area.
Back of envelope financialsFixed Cost Cost of satellites =$5.8bn Launching of satellites = $2.5bn Ground station cost = $90mn Terminal cost = $1000(Other costs like project cost are to be included too)Variable Costs/Operating costsInstallation, Maintenance & BillingThird party trainingLoss of assets /Depreciation Contd..
One satellite capacity ≈ 800 T1 lines User to modem ratio = 10:1 Maximum customers per satellite = 8000 Revenue per customer per month =$1000 Expected revenue ≈ 8000x12x1000 = $96mn
Opportunities Challenges• Large untapped markets • High entry barriers• consumers of existing • High launching costs service provider. • Billing & commissions • Optimizing cost
RECOMENDATION Bring in more technological partners who can help in making the system efficient ,affordable & mutually beneficial for both. Create a target oriented commission model to increase the market share. Actively lobby with various government agencies & key investors.
CONCLUSION• Teledesic had a good vision but it was not financially feasible.