Abstract
HAPS is a promising technology capable of providing broadband multimedia services as an alternative to the satellite communication system or terrestrial network. In this study, economic aspects of HAPS service are analyzed, HAPS services are defined, and revenues from the defined services are forecasted assuming nine scenarios. Capital expenditure as well as operating expenditure is estimated. To evaluate the profitability of HAPS service, the net present value (NPV), payback period, and the internal rate of return (IRR) are calculated. The results show that HAPS is economically justifiable in all the scenarios. Assuming that ARPU for the service is $35 per month in the average scenario, NPV is calculated as $2964 million, IRR becomes 31.9%, and payback occurs in 2017, which implies that HAPS service is profitable in Korea. In addition, the results of the sensitivity analysis show that the results are fairly robust.
Highlights
Recent trends in the telecommunication and broadcasting market can be summarized as the digital convergence of broadband multimedia services [1]
In Europe, CAPANINA project is going on to develop broadband telecommunication system based on HAPS [3, 8, 9], and a consortium called as USE HAAS which consists of more than 100 stakeholders has been organized to analyze the world state of the art including HAAS aeronautical uses, to develop tentative research objectives, and to define a technological roadmap based on the inputs given by the end-users and the possible industrial partners [8, 10]
general and administrative (G&A) cost is estimated by multiplying the sales estimation with the average ratio of G&A cost to total sales quoted from the balance sheet of Korean Telecommunication (KT) for the recent 3 years
Summary
Recent trends in the telecommunication and broadcasting market can be summarized as the digital convergence of broadband multimedia services [1]. There are lots of technical risks identified during the stage of platform development, and these risks could increase the development time to reach the full broadband HAPS services, but the appropriate steppingstone-based strategy should help mitigate this problem [7]. Perceiving those possibilities, many countries are researching related technologies enabling HAPS to be practical alternatives. By estimating the cost of providing the HAPS services as well as the revenues obtainable from the business, the profitability of the HAPS services is examined
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