How Satellites Work

How Much Do Satellites Cost?

In the years following Sputnik and Explorer 1, satellites grew larger and more complicated. Consider TerreStar-1, a commercial satellite designed to provide mobile voice and data communications in North America to smartphone-size handsets. Launched in 2009, TerreStar-1 weighed in at 15,233 pounds (6,910 kilograms). And when it was fully deployed, it unfurled an S-band antenna measuring 60 feet (18 meters) across and massive solar panels giving the final device a wingspan of 106 feet (32 meters) [source: de Selding].

Building such a complex machine requires lots of resources, which is why, historically, only government agencies and corporations with deep pockets have been able to get into the satellite business. Much of the cost is wrapped up in the equipment carried by a satellite -- transponders, computers and cameras. A typical weather satellite carries a price tag of $290 million; a spy satellite might cost an additional $100 million [source: GlobalCom]. Then there's the expense of maintaining and repairing satellites. Companies must pay for satellite bandwidth just like cell phone owners must pay to transmit voice and data. Those bandwidth costs could top $1.5 million a year [source: GlobalCom]!


Another important factor with satellites is the cost of the launch. Launching a single satellite into space can cost anywhere between $10 million and $400 million, depending on the vehicle used. A small launch vehicle such as the Pegasus XL rocket can lift 976 pounds (443 kilograms) into low-Earth orbit for about $13.5 million. That works out to be almost $14,000 per pound. A heavy launch vehicle, on the other hand, costs more to launch but also provides a greater lifting force. For example, the Ariane 5G rocket can lift 39,648 pounds (18,000 kilograms) into low-Earth orbit at a cost of $165 million. That works out to $4,162 per pound, making it more cost-effective on a per-pound basis [source: Futron Corporation]. (Note that all monetary figures are in 2000 U.S. dollars.)

Despite the costs and risks associated with building, launching and operating satellites, some companies have managed to grow their space technology business. Boeing is one of those companies. Its Defense, Space and Security division managed to deliver 10 satellites in 2012 and acquire orders for seven more, contributing to the business unit's nearly $32 billion in revenue [source: The Boeing Company].