Can SES win an advantage over OneWeb?

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Would-be ‘mega-constellation’ OneWeb (which wants to orbit 900 smallish satellite to cover the planet with broadband connectivity) is late with its satellites, which are reportedly costing more to build than estimated, and is giving Wall Street the jitters with its financial forecasts.

Asked whether these problems being experienced by OneWeb would give satellite giant SES a competitive advantage, SES recently appointed CEO Steve Collar admitted it would do SES no harm. “We are not substantially influenced by OneWeb, because fundamentally we firmly believe that we have the right solutions for the market,” he said.

“I am on record as being something of a LEO sceptic, not directed at LEOs themselves but at the current generation and architectures around. It is basically because they are so expensive, and not just the satellites but the whole supporting infrastructure. It has some considerable technical challenges, which are not insurmountable but come with enormous complexity. The delays being suffered at the moment are not surprising to anyone, and I am firmly not critical because the whole concept is challenging. But it comes down to the economics, and I do not see how investing $4-$5 billion up front with no market in place, and having to replace the satellites in 5 years or so.  We did this with O3b, and saw how the business grew and expanded over time, and helped by the scalability of the network. But comparing us with the ‘big bang’ approach and having to ramp up extremely quickly makes no economic sense.”

Collar explained that the SES strategy (and prior to taking up the overall CEO position he headed up the SES Networks division) saying that the satellite operator was fully behind its existing Geostationary and Mid-Earth (MEO) fleet. “[Add in an] intelligent ground component and that same intelligence to manage the network. This means low latency, high throughput, and affordable delivery. And remember it is still video which makes up around 80 per cent of the data networks being carried and you can run that over GEO if you wish.”

“In other words, our clients do not have to put all that video through a low latency network. It is, by some distance, the most economical way to handle traffic,” added Collar. “If the other LEO players start to struggle, is it good for us? Then that answer has to be yes. But in my view, it isn’t the 6-month, or one year or two-year delay that is the problem. It is the fundamental economics of the whole architecture that’s at fault. We assume that some of the projects will get to market, but I wouldn’t be investing our money in them.”


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