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Eutelsat is to build a new High-Throughput Satellite especially for sub-Saharan Africa, and to be in place during 2019. The satellite will be a multiple spot-beam craft delivering up to 75 Gb/s of bandwidth, and targeting SMEs in Africa. Moreover Eutelsat has an option with sat-builder Thales Alenia to double up and so accelerate the satellite’s capacity and impact over Africa.
The craft is seen as a follow-on, and potential replacement, for the recent deal with Israel’s Spacecom for short-term space on its AMOS-6 satellites. Eutelsat explained October 28th that the Spacecom deal sees half of the capacity booked and sold to Facebook with zero profit margins. The other half will be used by Eutelsat to seek profitable business in Africa. AMOS-6 launches next year.
The as yet unnamed Thales satellite will be an ‘all-electric’ craft and take around 6 months to get to orbit, once launched.
Eutelsat also revealed their Q1 revenue numbers which, by and large, pleased the market. The downside news which overshadowed the results, however, concerned a “significant” contract from a customer which had lost its US government Department of Defense (DoD) business. Eutelsat re-structured its contract with this unnamed client from a multi-year deal to a single-year contract. Eutelsat received a termination fee to cover this lost business of some €8-€10 million overall. This one-time termination fee helped deliver overall revenues of €387.7 million, some 2 per cent ahead of consensus.
However, analysts focused on Eutelsat’s government business. Typical was a note to clients from equity analysts at Exane/BNP-Paribas, which said: “Government services accounts for 14 per cent of group revenues of which 70 per cent is from the US DoD. The remainder comes from non-US governments and administrations. Management guided for lower renewal rates (in volume and prices) on its US DoD capacity, but we expect some growth from non-US government services as witnessed in Q1 and at SES in H1 15. Unlike in previous years, the US DoD now puts every contract renewal out to tender for competitive bids. This has led to increased pricing pressure for all satellite operators.”
Eutelsat reported that the number of operational transponders on its fleet had fallen by two (to 1175) and that its all-important contract backlog had fallen by around €300 million (to €6 billion).