Advanced Television

SES will not follow Eutelsat into Ka-Band (except that it will)

May 25, 2012

In one respect the headline is not new. The fact that Luxembourg-based satellite operator SES will not adopt arch-rival Eutelsat’s adventurous Ka-band strategy has been known for some time. But what is new is the determination that SES president Romain Bausch now re-states the SES message.

Addressing investors and analysts this week Bausch stated bluntly that SES will not invest in an ‘all-Ka’ satellite. Eutelsat has done exactly that and somewhat ‘bet the farm’ – certainly investing well over €300 million on a new Ka-band craft, plus its expensive ground infrastructure. The satellite entered service mid-2011.

SES’s policy, he said, is to gently increase its Ka-band capacity, adding a few of these specialised transponders to many of its European satellites as need dictates. In fact SES will add Ka-band bandwidth to four new satellites over the next two years or so. But such is SES’s antipathy to the supply of consumer–related ‘broadband by satellite’ over Europe that it used this aspect as one of its principle financial attributes at the investor’s session this week, thereby emphasising that in its view Eutelsat’s much-lauded strategy is wrong.

He told analysts that the cost-per-satellite for adding this incremental Ka-band capacity worked out at about €6 million per satellite, a fraction of Eutelsat’s investment.

“We deliberately decided not to invest in a dedicated Ka-band satellite,” Bausch told delegates. “We do not believe [that consumer satellite broadband] is a sustainable business over the life of the satellite. A satellite takes about three years to build and then is in operation for about 15 years. You need a good feeling about the business for 18 years,” Bausch added. “The last mile for broadband for consumers is best done by terrestrial, not by satellite.”

SES’ ASTRA2Connect, despite the availability of Eutelsat’s rival TooWay, broadband service, is Europe’s largest satellite broadband supplier with a claimed 80,000 users. Eutelsat has not yet revealed its numbers and the lack of hard data has hurt confidence in Eutelsat as far as investors are concerned. Eutelsat’s share price is well down on its 52-week ‘high’ of €31.49 at €22 earlier on Friday. Eutelsat has promised data on its Ka-band status in July.

Bausch also told analysts that it was planning “at least” an additional two satellites, and “possibly” four, for launch by 2017, and will place them to serve the Latino and Asian markets. He also said that 03b, an all-new Ka- band communications constellation designed to serve ‘the other 3 billion’ of the world’s under-served population as far as broadband data and communications are concerned, and which SES owns a current 46 per cent, would end up being a 100 per cent-SES business.

Thus, SES is somewhat contradicting its own policy. No Ka-band, perhaps wisely, for Europe or North America, but plenty of Ka-band for the Earth’s underserved via its O3b strategy.

Categories: Blogs, DTH/Satellite, Inside Satellite