| Year | AeroLink SRS | SkyReach SRS | OrbitNet SRS | Wholesale Bandwidth Cost* |
|---|---|---|---|---|
| 2015 | £480 | £460 | £470 | £220 |
| 2017 | £510 | £490 | £495 | £190 |
| 2019 | £550 | £520 | £530 | £160 |
| 2021 | £600 | £560 | £570 | £130 |
| 2023 | £660 | £610 | £620 | £100 |
| 2025 | £730 | £670 | £680 | £70 |
*Wholesale Bandwidth Cost – the wholesale cost of backhaul capacity allocated per active subscriber.
AeroLink, the satellite division of Altis Group, reported a significant increase in operating profits following its successful integration of the smart-routing software developer, "PathFinder Tech". Altis Group completed the acquisition of PathFinder in late 2022, boosting its share of the rural high-speed broadband market to a dominant 32%. The operating profit of the consumer retail division in the financial year ending 2025 rose to £340 million.
The Chief Executive of Altis Group commented: "We are leveraging a multi-tier bundling strategy. By offering packages that combine AeroLink satellite connections with PathFinder smart-routing optimization, we deliver high-margin, premium services to subscribers. This integration of software and hardware is a key driver of our returns as we establish ourselves in underserved regions."
Annual bills for remote households on legacy Standard Rolling Subscriptions (SRSs) with no bundled discounts will be capped, following the telecom regulator's investigation into practices described as 'exploitative of inactive rural consumers'. This price intervention is expected to save millions of households up to £90 a year.
The regulator NetWatch stepped in because SRS rates have steadily climbed over the last decade. This rise has occurred despite major providers benefiting from dramatic cost reductions in global wholesale bandwidth, which represent the primary raw cost of service delivery. A large portion of these legacy subscribers are elderly or live in deep rural areas with no alternative physical infrastructure, many of whom have stayed with AeroLink for over a decade. NetWatch has focused on AeroLink because it holds over 35% of the UK's legacy satellite and wireless subscriber segment.
A NetWatch spokesperson remarked: "A severe lack of active consumer switching has allowed AeroLink and other major providers to steadily inflate margins on passive accounts without fearing loss of market share. Smaller local operators have merely mirrored this upward trend. Over 65% of SRS customers have never compared or switched providers, rendering them highly profitable targets for regular price hikes while underlying wholesale capacity costs have plummeted by more than 65%."
Discuss one likely reason for the rise in AeroLink’s profit (Table 1, Extracts B and C). Use a cost and revenue diagram to support your answer.
