How Tonga Made $100 Million Renting Space in Outer Space | Half as Interesting

The Gist

Tonga capitalized on unclaimed geostationary satellite slots by filing for them through the International Telecommunications Union, then leasing those orbital spaces to foreign countries and corporations for hundreds of thousands of dollars each year. This scheme generated millions in revenue for the Tongan government and royal family.

Quick Overview

Tonga made millions of dollars by exploiting unclaimed orbital slots in geostationary space through the International Telecommunications Union and leasing them to international entities. In the late 1980s, retired satellite industry worker Dr. Matt Nilson noticed that many orbital slots above the Pacific Ocean remained unclaimed. He persuaded King Taufaahau Tupou IV to file claims for sixteen available slots, which Tonga then leased out at seven hundred thousand dollars per year. The scheme ultimately brought substantial revenue to the nation and the royal family before facing negotiations that reduced Tonga's holdings to six slots.

Key Points: Geostationary satellites orbit Earth at an altitude of 22,236 miles above the equator, requiring specific frequency slots to prevent signal interference. The International Telecommunications Union divides Earth's geostationary orbit into 180 different frequency and position slots to manage global satellite broadcasting. In the late 1980s, Tonga lacked basic internet and telephone infrastructure while struggling to export tropical agricultural products. Dr. Matt Nilson, a retired satellite industry worker from San Diego, realized that the orbital slots above Tonga and much of the Pacific Ocean were completely unclaimed. King Taufaahau Tupou IV met with Dr. Nilson and agreed to file claims for all sixteen remaining unallocated orbital slots above Tonga. Tonga established a satellite leasing model that charged corporations and governments 700000 dollars annually to park satellites in its slots. International protests from the United States, Intelsat, and five other countries led the ITU to pressure Tonga, eventually reducing its claim down to six slots. The revenue generated by these orbital leases brought millions of dollars to the Tongan government and the royal family through a secondary financial mechanism.