The Economics of Satellite Communications

Abstract

In 1965, Intelsat began commercial service with a single Atlantic satellite having a capacity of 240 voice circuits — enough to accommodate 240 telephone conversations, or one television transmission, simultaneously. It charged $32,000 for a one year lease for one-half of the capacity required for a two-way telephone conversation. Twenty years later, the same capacity could be leased for $4,680. In 1987, Intelsat was using fifth generation satellites capable of carrying 15,000 telephone conversations, and was preparing for the 1989 launch of Intelsat VI spacecraft capable of accommodating 30,000 such conversations and three television transmissions at the same time. A similar record of more recent vintage has been achieved by other commercial applications of satellite technology, notably in the domestic communications and remote sensing systems of the US and certain other countries and regions.