Multichoice pre-pays for new satellite

Intelsat is to build and launch a new satellite (Intelsat 36) for South Africa’s Multichoice pay-TV giant. The craft will take 3 years to build and when launched will be placed with Intelsat 20 at 68.5 degrees East, Intelsat’s ‘hot spot’ for Africa.

Multichoice, according to an SEC filing made June 11, will pre-pay its lease payments for the 30 transponders it will take on the craft, estimated at between $75 – $100 million. The satellite will cost no more than $225 million to build, launch and insure.

Multichoice will lease all the Ku-band capacity for the lifetime of the satellite. Intelsat 36 will also have 10 C-band transponders, which Intelsat will itself commercialise.

The commitment to this new satellite, however, could have potentially breached Intelsat’s capital spending forecasts. But Intelsat explained in the SEC filing that while it would be spending around an extra $50 million a year during the next 3 years on the satellite this remained within its overall capital expenditure plan.

Intelsat adds that it remains committed to spending down some $400 million of debt this year, and this new craft will not impact that plan.

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