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Funny how I was promptly getting attacked earlier for not posting evidence to back up some of my claims and speculation, but when I posted evidence on the most significant factor of money ($500M-$1B total costs to rent half of a Ku-band satellite from the Canadians) the post evoked no response.
Not the most friendly environment I'm encountering here considering I'm just trying to contribute.
As with any lease deal, you have to look at the
present value of leasing vs the
owning and operating cost over the life of the asset (satellite). The figures you quoted:
"- Initial lease payment = $50 Million USD
- Monthly Charges - medium-power mode = $175,000 USD Per Transponder Per Month ($31.5 Million per transponder over their 15-year contract, or $504 Million for 16 transponders)
- Monthly Charges - high-power mode = $350,000 USD Per Transponder Per Month ($63 Million per transponder over their 15-year contract, or $1.008 Billion for 16 transponders)
- Late Payment fee - 1.5% compounded monthly, or 19.56% per year
So, Dish can lease HALF of the Canadian satellite for the 15-year term for a minimum of $554 Million, and as much as $1.058 Billion (EXCLUDING taxes, Government-related fees, and any of the many other kinds of fees that can be billed to Echostar). If they are allowed to lease more than that, just watch those figures rise even higher."
don't take present value into consideration. I did the math, using an interest rate of 7%, and the present value of leasing 16 medium power transponders for 15 years is about $361 million. 16 full-power transponders would be $672 million. Unless you have full access to the lease terms, I don't know how you could assume that Dish would be responsible for taxes and fees on top of lease payments. They may be, but we don't know.
I personally don't know what the present value of the 15-year owning and operating cost of a $250-300 million spacecraft is (including the launch, testing, monitoring, and debt service, and ????), but I would bet that it's similar to or more than the $672 million that Dish might pay for 16 full-power transponders over that time. I'll leave that exercise to someone who knows more about what it takes to operate a satellite.
I certainly don't fault you for asking these questions, but I don't think any of us on this board have all the inside information necessary to completely analyze the lease vs own question.
Brad