Is HAPS Viable for the Next-Generation Telecommunication Platform in Korea?

Abstract

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.