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Internet VSAT access via satellite: Costs

The numbers below are all approximate assumptions. The figures given are not intended to be representative of any particular system. Contact appropriate service providers in your satellite beam coverage areas for quotations.

1. Space segment charges

Assumption: Satellite costs $300 million to build, launch and operate and has 15 transponders.

Over 10 years the cost is then $2 million per annum per transponder, or $58,823 per MHz per year or $4,901 per MHz per month.

In July 2003, in ViaSatellite, SATMEX V at Phoenix Teleport, was advertising C band bandwidth at $3,500 per MHz per month. (equivalent to $1,512,000 per annum for a 36 MHz bandwidth) so the above estimates are not far out but you should be aware of large variations due to power, frequency band, length of lease, pre-emptibility, priority in the rare event of transponder failure etc.

In 2015 transponder prices were $3,000 to $4000 per MHz per month. In 2017 $1500 per Mbit/s per month.

2018-2019: Average $2,000 per MHz per month. Min $800 per MHz per month.

3. Mbit/s per MHz bandwidth

The number of Mbit/s that you can get out of 1 MHz of bandwidth varies according to beam coverage, frequency band, satellite EIRP, receive earth station size, modulation method, FEC coding, and reliability required.

Bits/Hz varies from about 0.31 bit/Hz to about 3.5 bit/Hz.

For point to point service between two sites in same coverage, more than 5 bit/Hz may be possible.

Assumed below is 1 bit/Hz which is conservative.

Overall, 2 bit/Hz is typical.

4. VSAT network costs and cost per VSAT remote site

One transponder is leased and used to provide a high power 34 Mbit/s outlink carrier (teleport hub to remotes). Cost = $2,000,000 per annum.

One quarter of another transponder is leased to provide a low power high sensitivity return link capacity (remotes to teleport hub). Cost = $500,000 per annum.

Assume that dedicated capacity is assigned to each of 34 remote sites = 1 Mbit/s outlink, 250 kbit/s return link. The remote VSAT would have a quite a few PCs connected in its local wired or wireless LAN and management of congestion would be by the VSAT owner (e.g business or internet cafe).

Cost per remote (1 Mbit/s outlink) = $2,000,000 / 34 = $58,823 per annum plus:
Cost per remote (250 kbit/s return link) = $500,000 / 34 = $14,705 per annum
So..
1000k/250k dedicated links will cost $73,528 per annum (dedicated)

Substantial price reduction per VSAT is possible if the satellite bit rate is shared, for example with contention ratio of 1:33 giving costs like:

1000k/250k shared links will cost $2228 per year (shared, contention ratio 1:33)
1000k/250k shared links will cost $185 per month (shared, contention ratio 1:33)

These examples show 33 VSAT sites all sharing the same 1 Mbit/s from the satellite, and sharing the 250kbit/s uplink also.

Total number of sites = 34 x 33 = 1,122 sites.

These costs do not include marketing, advertising, sales, installers, hardware, site maintainers and teleport hub network management staff.
The calculation assumes you have the full number of customers from day 1 right through to the end of the 10 years. If your number of customers ramps up from zero then costs per user will be higher.

Bits/sec per VSAT terminal

The above assumes an allowance of 30kbit/s down and 7.5kbit/s up per VSAT terminals.

An allowance of 10kbit/s per customer pre 2005 was better than nothing. By 2015 customers' expectations increased to at least 30 kbit/s each due to downloading of video, youtube, facebook, larger file size images etc. Software updates need to be done at night.

Added 24th November 2005:

Assume satellite transponder bandwidth costs $5000 per MHz per month.

So, if you rent 100 kHz of bandwidth the monthly charge is $500 per month. You could use your 100 kHz for two dedicated carriers, one each way. The first carrier would be the outlink, the second carrier the return link.

Added 30 April 2008:

Example end user charges: around $6500 - $7000 per month per Mbit/s including termination into the terrestrial internet and assuming QPSK modulation, 3/4rate FEC and operation on a highly reliable Ku Band spot beam satellite. If you use a large dish obviously you get to to use higher order modulation methods like 8PSK or 16QAM and perhaps higher FEC ratios like 7/8, 0.95 which result is much lower space segment charges. Choosing less popular beams, C band an inclined satellite will also get the cost down, as will longer lease periods, like 1 or several year lease contracts.

If you have capacity to sell please say in the transponder capacity for sale section of the satellite internet forum.

Added 1 April 2016:

Transponder prices have been falling over last few years as a result of pressure from lower cost per MHz for new Ka band high throughput satellites (HTS). These HTS satellite have very many tiny spot beams and provide internet access via a limited number of gateway beams.

Traditional broader area Ku band satellite beams, provide the possibility of direct point-to-point connectivity between all earth stations within a beam. Approximate price for these Ku beams is $3000 per month per MHz. Exceptionally $1000 per MHz per month has been seen, perhaps for un-backed up capacity on an inclined orbit satellite nearing the end of its useful life.

Added 14 Feb 2019

For Ka band HTS satellites, the cost per Mbit/s is now just under about $200 per Mbit/s per month !

What bit rates are possible?.

If you use (1/2 rate FEC QPSK) and smallest dish then you may squeeze in is about 80 ksps or 80 kbit/s information rate (note: 2 transmission bits per symbol and 1 information bit per symbol).

If you spend more on a large antenna (say 10 times larger) and buy an advanced modern 16-QAM modem with 0.95 turbo FEC then you may be able to achieve 4 transmission bits per symbol and 3 information bits per symbol. So you might get a total of 240 kbit/s information rate.

You could use 240 kbit/s to provide 200 kbit/s downlink speed and 40 kbits/s return uplink speed. This would be good for 1 VoIP phone call (12k each way) plus 28k/188k for web browsing using up to 18 PCs.

Assume hub costs and internet connection amount to $100 per 100kbit/ per month.

Summary: 200k downlink + 40k uplink = $700 per month

There is a further improvement possible. Your outlink should be a tiny share of a giant outlink carrier that occupies a whole transponder, operating at saturation (output back off approx 0.5 dB). Such a carrier is approx twice the power of a multitude of small carriers when the transponder has to be operated backed off to keep intermodulation noise down.

So please use high cost bigger dishes, high cost low phase noise LNBs, high cost PLL locked BUCs and high cost modern modems, and everyone will benefit from the lower monthly costs.

If you agree or disagree with this logic please don't keep quiet about it - contribute your views to my forum at cgi-bin/yabb/YaBB.pl?board=any1

2. Remote terminal vsat equipment costs - price list - for sale

Indoor Electronics (indoor RCST box, cables) = $900

Outdoor dish and RF equipment: Dish, plus feed, omt, transmit reject filter, LNB and BUC = $900 (typical)
Prices will vary with dish size and transmit power (0.5, 1, 1.5, 2, 4, 5W) required.

Delivery, install, taxes etc: $1500 (rough estimate) - makes total = $3300 !

Notes:

Mount: You need a mount pole or non-penetrating (non-pen) mount. A non-pen mount typically has a rectangular frame on which you need to lay many concrete blocks. Is is suitable for a strong flat roof in area without excessive wind speeds.

Polarisation: Some C band systems use circular polarisation in which case you need a C band polariser between the feed horn and the OMT.

Frequency band: Ka, Ku and C band feed parts and LNBs and BUCs are all quite different.

LNB s need to be selected according to frequency sub-band and according to the frequency stability of the local down-converter oscillator e.g. +/- 150 kHz to +/- 500kHz for DRO types or +/- 5 kHz to +/- 25kHz for PLL types.

DRO means Dielectric Resonator Oscillator, which is a free running oscillator depending on the resonant properties of a short cylinder dielectric material. PLL means Phase Locked Loop, this is where transistor circuitry oscillates at the high microwave frequency and by dividing down and comparing with a very stable lower frequency reference oscillator (e.g quartz crystal) a high stability on the microwave frequency is achieved. You need the low stability DRO type to receive high bit rate wide band DVB-S type carriers. You need the PLL type if you are receiving low bit rate low bandwidth SCPC type carriers - otherwise you may never find the carrier ! +/- 500 kHz stability is pretty useless if you are searching for a 10 kHz wide SCPC voice carrier !

Installation: If you are really patient and skilful at setting the elevation angle accurately by calculation and inclinometer (or weight on string) measurement you can find the satellite with the receiver alone. A simple satellite finder signal detector ($75) is the next best thing but does not tell you if you have the right satellite.- If you can afford it a spectrum analysers, e.g. AVcom at $2800, you can easily find the satellite and peak up perfectly and rotate the feed polarisation perfectly which is essential if the uplink cross polar interference performance is to be acceptable.

3. Teleport Hub charges

The cost of the large teleport hub dish, hub rack equipment, site land, buildings, staff, power, internet backbone connection, government licence etc all need to be added and divided over the lifetime of the project. Licensing of the remote terminals (if required) may be either paid centrally by the service provider or by each individual remote user according to the local country tax arrangements. In the above assumption the cost of the hub, network licence etc is approx the same as the space segment charge, but the ratio will vary a great deal according to use.

Typical hub prices are: 8.1m dia antenna $200K
Hub equipment racks and control computers: TDM/TDMA Hub $450K
Remote terminals (wholesale price) 200 VSATs $200K ($1000 each)

Please send suggested new text to be added to this page to me eric@satsig.net

Page started 28 Feb 2005. Updated: 4 April 2021