A geostationary communications satellite in sunlight, box-shaped bus with solar wings extended above and four deployable reflector dishes on its sides, a feed-horn cluster on the near face with a single chartreuse status light, and the small blue disc of Earth far below.

A satellite's residual value comes down to one question a lessor has to answer before signing: who is the second customer? For most of the industry's history the answer was nobody. A geostationary spacecraft was built for one operator, one orbital slot and one frequency plan, and when that contract ended its earning life ended with it. That is why satellites have been financed against the operator's corporate credit and almost never against the spacecraft.

In April we argued that software-defined payloads break those single-tenant economics, in What flexibility really buys you. That piece asserted the residual. The evidence for it has been in orbit since 2024, and it is worth setting out properly, together with what a second customer costs and who should carry that cost.

The proof came from a fault

Astranis launched its first satellite, Arcturus, as a secondary payload on a Falcon Heavy on 30/04/2023. It was built to serve Alaska from 163° West under a lease to Pacific Dataport, delivering at least 7.5 Gbps of Ka-band capacity. Shortly after launch both of its solar array drive assemblies failed. The arrays could no longer track the sun consistently, leaving six to twelve hours of service a day, too little for the Alaska mission.

The relocation that followed was a recovery from a hardware failure, and it should be read as one. It is still the best public evidence that the capability works. On 01/02/2024 Arcturus left its slot and drifted at about three degrees of longitude a day towards a position over Asia, with arrival planned for mid-March. The new counterparty was Spacecom, the Israeli operator, which held the ITU reservation for that slot. Astranis said the satellite's digital radio processor was working at full capability and could be reprogrammed by a software upload from the ground to send different signals across its assigned bands.

The purpose of the move was regulatory. Under the ITU's procedure, a geostationary frequency assignment is brought into use when a station able to use it has been deployed and maintained at the notified orbital position for a continuous 90 days, confirmed to the Radiocommunication Bureau within 30 days of the end of that period and inside a seven-year regulatory limit. Arcturus was moved to give Spacecom exactly that. A satellite built around a fixed payload for a single frequency plan could not have done it.

From accident to design

Astranis has since built the capability in deliberately. UtilitySat, announced on 10/08/2023, carries both a chemical monopropellant system and an electric ion thruster, and the company says it can relocate dozens of times around the GEO belt over its lifetime. Astranis describes four roles for it: bridge capacity for a customer waiting on a dedicated satellite, an on-orbit spare, disaster response when terrestrial networks fail, and surge capacity. It also reports that customers in early conversations often want to lease the satellite's entire capacity. Those are the manufacturer's claims, and none has yet been tested across a full operating life.

For a lessor the design intent is what counts. A spacecraft specified from the outset to be moved and re-tuned is one where the second customer is part of the product. That is the condition aviation leasing rests on: an A320 holds its value because another airline can fly it within weeks of its return.

What the second customer costs

No public figure exists for what a GEO relocation costs. The components can be listed, and each is something a lease has to price or allocate.

Propellant. Drift and re-stabilisation burn station-keeping fuel, and in geostationary orbit fuel is life. As many as half of GEO communications satellites retire with working subsystems because the tank is empty, as set out in satellite life extension and the lease term. Every move shortens remaining economic life and with it the residual.

Time. Arcturus was scheduled for roughly six weeks in transit and then needed three months on station before the new assignment could be confirmed. What the asset earns in that window depends entirely on what the incoming customer has agreed to pay, and from when.

Spectrum. The new slot needs a filing and coordination with neighbouring operators; Arcturus had the advantage of a counterparty that already held the reservation. The slot being vacated carries its own exposure. The ITU allows use of a GSO assignment to be suspended for up to three years, provided the Bureau is told within six months; notice more than 21 months after the suspension date and the assignment is cancelled. A lessor whose collateral leaves a filed position needs to know whose filing protects the way back.

Ground segment. A reconfigurable payload needs ground infrastructure that reconfigures with it. When Airbus awarded Kratos the ground system for OmanSat-1, a reconfigurable OneSat, in February 2026, Airbus said the satellite "needs a ground system that is just as dynamic to support the reconfiguration of the satellite". The contract value was not disclosed, so the cost of that work cannot yet be benchmarked.

Drafting a lease when the collateral can move

The structure follows from that list. Relocation risk belongs with the party that decides to relocate. A sale-leaseback can give the lessee the right to move the asset within agreed bounds and leave it with the propellant and revenue cost, while lessor consent is required for any move that would take remaining fuel below an agreed reserve. Return conditions then need a propellant floor expressed in years of station-keeping, the same discipline as half-life return conditions on aircraft engines. A residual guarantee written against a satellite that can move should reference fuel remaining and payload capability at return, treat orbital position as a variable, and deal with the filing in its own clause.

All of this is an argument for geostationary orbit. A single LEO satellite inside a constellation has no slot of its own to move to and no second operator who could use it alone; its value is a share of a system. A GEO spacecraft with a software-defined payload and propellant to spare is a separable asset with more than one possible user, and that is what lets a residual be underwritten instead of assumed. It is the asset Caelum finances through finance leases and sale-leaseback. The basics are in Space Assets 101, and how we think the capital behind it should be arranged is set out for institutional investors.

Arcturus figures per SpaceNews reporting of 27/02/2024. UtilitySat capabilities are Astranis's own claims. Bringing-into-use and suspension rules per the ITU Space Services Department. Relocation costs are not publicly disclosed and none are estimated here. Nothing here is investment advice.

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