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Application of Revenue Management to Satellite Communications
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The satellite communication (SatCom) industry is rapidly expanding, with supply growing much faster than demand, potentially straining market prices and company stability. Effective revenue management (RM) can help operators optimize the use of limited and expensive satellite resources. Current SatCom RM methods fail to account for both the temporal and spatial nature of satellite services. This paper presents a multizone displacement‐adjusted virtual nesting (DAVN) RM method to create booking limits that guide operators in determining which products to accept to maximize revenue. By incorporating spatial interzone effects, the multizone method improves revenue compared to the separate zones method by 2%–10%. The results demonstrate that under varying pricing structures, the multizone approach increases the acceptance of high‐revenue mobile products by approximately 10%, with a corresponding reduction in the sale of longer duration stationary products.
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