A few weeks ago Romain Bausch, the CEO of satellite operator SES, spoke ambitiously of further expansion for SES. He specifically mentioned two possible target operators: Intelsat, a similarly huge supplier of satellite capacity and services, and Telesat of Canada. Telesat is part-owned by Canadian pension interests and the investors behind Space Systems Loral. Evidently both Intelsat and Telesat/SS-L might come up for sale in the next year or two as investors seek a profitable exit strategy.
Bausch is well aware that any move by SES on Intelsat would run into a brick wall built of anti-monopoly elements that might prove impossible to climb over. But the situation could be a little different as far as Telesat is concerned. Helping matters along for SES in Canada could be the existing relationship SES has with the Ciel satellite operation. Of course, Bausch stressed that there had to be a willing seller and buyer, and price was all-important.
However, any further major consolidation in the wholesale satellite capacity market is likely to be fought tooth and nail by some of the world’s smaller players. Spacenet, in comments to the FCC regulator in the US, said the wholesale market is “dominated” by Intelsat and SES World Skies, which “now control some 83 percent of the data network services transponders serving the US.”
Spacenet buys wholesale capacity from operators. New entrants to this global market are unlikely since Intelsat and SES World Skies already control or have rights to two-thirds of the 31 orbital slots able to provide service to the US, argued Spacenet to the FCC.
The agency shouldn’t treat all satellite capacity as available since a change in satellite providers is a difficult process, requiring major adjustments to terminals and earth stations, Spacenet said in their submission.
CapRock Communications suggested that the FCC should begin proceedings to address problems in the provision of international space segment capacity. Near-term competitive concerns could be helped by preventing operators from selling satellite capacity of other satellite operators and stopping any further consolidation in the satellite industry, it said. Also, satellite operators shouldn’t be able to sell capacity in pre-determined bundles, it said, repeating several points it made during the Open-Market Reorganization for the Betterment of International Telecommunications Act proceeding.
Satellite operators themselves remain concerned about having “very limited options for choosing a launch provider,” said EchoStar, Intelsat, SES World Skies and Telesat Canada in joint comments (which itself is perhaps telling) to the FCC. US launch services aren’t seen as providing a reliable access to space since many launches are often specifically tailored to the government’s timing needs and aren’t easily changed for commercial launches, they said.
American launchers also lack scheduling reliability due to government launches receiving priority, sometimes pushing commercial launches out of launch slots, they said. US policies prevent access to many international launchers, leaving Arianespace and International Launch Services as the only “near-term” options for US operators who want to launch satellites, they said.
Which is all very well – and fair comment – but does little to boost capacity above North America, which, Spacecom suggests, could generate extra satellite competition at a wholesale level.