Investment bankers Credit Suisse, in a note to clients this week, has helped boost share prices for the main satellite operators to near-record levels. The report focuses on “the 4K revolution” likely to have a major impact on satellite capacity over the next year or two.
Credit Suisse says: “4K, the next generation of HD, will require twice as much transponder capacity per channel vs. current HD. The timetable for 4K adoption has accelerated over 2014, with prices for 4K TV sets falling significantly; we estimate 4K is now standard in over a third of new large-screen TV sets on sale in US & Europe. Netflix is already streaming content in 4K and DirecTV has launched its first 4K satellite. We raise our forecasts for 4K satellite transponder demand, an important growth driver for the global satellite industry.”
“We view OTT providers, such as Netflix, leading the Media & Telcos industries efforts to bring 4k content into the home as a positive for the global satellite operators as OTT could, and should, boost overall global demand for 4K content, requiring satellite broadcasters (e.g. BSkyB in the UK) to move more quickly to transmit content in 4K.”
The bank then raises its share price targets for two of the three global – and listed – operators. It puts a target on Eutelsat (“Outperform”) from €23 to an impressive €32. Similarly with Luxembourg-based SES (“Outperform”) which it also raises from €27 to €33. However, the bank advises clients it is “Neutral” on Intelsat and marks the operator down from $23 to $21.