The past few years have not been kind to the world’s ‘Big 3’ satellite operators (Intelsat, SES and Eutelsat) because of severe cutbacks by the US government on satellite spending. The US has trimmed its spend (sequestration), in particular on the amount being spent on commercial satellites.
However, President Barrack Obama, in his new budget proposition issued February 2nd, is proposing a 2.8 per cent increase in the budget for the NASA space agency, and a 6 per cent real increase in Dept. of Defense appropriations.
A note from investment banker Exane BNP-Paribas says that while full budget appropriation are likely to be different from those numbers (due to the legislative process and budget caps), “at this stage budget numbers are supportive of our view that Eutelsat and SES operating performance with the US government should improve in FY15/16.”
The bank’s report continues: “Around 5 to 10 per cent of satellite operators revenues are derived from US government spending. Intelsat and SES reported double digit rate of decline in their last quarters. Eutelsat returned to +3 per cent growth in its last reporter quarter.”