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Opportunity Assessment
Solution
for European Government
| Challenge |
A
prospective operator of Ka-band broadband satellite services that would
serve customers in Europe, extending eastwards to India, approached a
European Government seeking to use two Ka-band orbital slots that earlier
had been assigned by the ITU to the Government but were still unused. The European government was
looking for guidance concerning the terms under which the orbital slots
would be made available to the proposed operator.
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| Solution |
We
reviewed current trends in the broadband satellite market, the proposed
venture’s market strategy, and its competitive strengths and weaknesses.
We considered information provided by the venture and interviewed its
intended satellite manufacturer, as well as obtaining other industry
inputs. We referred to examples of compensation arrangements obtained by
other countries for use of their Ku-band orbit/spectrum resources, and
noted relevant similarities and differences versus the current proposed
system. We identified factors to be taken into account including the high
risk associated with the venture, the opportunity cost likely to be
incurred by the Government in delegating the use of its Ka-band slots to
this particular venture while, at the same time, the important benefits
the country would obtain if the venture were successful. We recommended
that the Government should not seek upfront cash compensation, but should
require the venture to establish a bank guarantee that would become
payable if the venture failed to meet certain milestones. Further, if the
broadband satellite venture did achieve the milestones and reach
commercial viability, the Government would receive a percentage of its
gross revenues. Government is negotiating an agreement with the venture
based on our recommended approach. |
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