So many beams, so little time: Revenue Management in the next generation of flexible communication satellites

Abstract

In this paper we present a proof of concept of how satellite operators can monetize the available resources granted by the latest advancements in satellite payloads, which provide customers with unprecedented levels of flexibility when it comes to resource allocation. The degrees of flexibility range from adjustable power only to full control over frequency assignment, routing, beam pointing and beam shape.Furthermore, the current satcom landscape is expected to be governed by highly variable demand, making old and new satellite operators face a new challenge in how to manage demand and capacity. Previous literature has pointed out the similarities of the current satcom market with highly established industries, like Airline or Car Rental, remarking its huge potential for a new Revenue Management strategy.We present two different strategies that can leverage a satcom-adapted Revenue Management framework to lift the revenues of satcom operators by more than 20%. Both strategies are based on monetizing the available capacity through existing customers: either selling more capacity or selling additional products. We outline the complete process: we first detail the general and specific assumptions of each monetizing approach and the pricing optimization strategy employed. We then set up a simulation that contains actual demand data and quantify the benefit of dynamic power allocation in terms of available capacity, compared to fixed-by-design allocation. Finally, we present the results of applying the two mentioned strategies and provide a comparison between them.