Staged Deployment of LEO Communication Satellite Constellation Based on Real Option Theory

In this article, the deployment problem of LEO satellite communication is investigated and analyzed by the financial tool, i.e. real option theory. Traditional methods often neglect the existence of uncertainty and underestimates the value of staged deployment decisions. Real option theory pays more attention to the value of flexibility in large-scale complex engineering system, such as satellite constellation. The objective of this work is to analyze the flexible approach of staged deployment for mega-constellation and deduce the option price equations. Finally, a simple example is given to demonstrate the fact that staged deployment brings the flexibility for the system and real option theory can evaluate this value more exactly.