Europe’s two satellite giants SES and Eutelsat have not enjoyed the best of times on the stock market these past few trading days. Their prospects have not been helped by news from AT&T-owned DirecTV which says that it will not be ordering any more DTH satellites for the US.
DirecTV has some 19.6 million subscribers and is the largest DTH provider in the US. AT&T believe that over the next 15 years they will migrate their customers to an OTT-based (and mostly fibre) service.
While Echostar/Dish have yet to make a comment on their position regarding their DTH services, the business proposition for Dish has always been materially different to DirecTV, in that Dish has a considerable focus on rural delivery.
However, both SES and Eutelsat suffered last week. Equity analysts at investment bank Exane/BNPP summed up the position with a note to clients on December 7th, confirming that the news was “negative” for SES and Eutelsat. “[We note] Eutelsat does not operate in the US and that SES operates cable distribution only. Cable distribution is declining, and should it completely disappear (a very unlikely scenario in the eyes of cable operators), we note that SES could free up more spectrum to resell to 5G networks.”
The bank also says that most of the world’s pay-TV operators are not owned by telephone companies, and the DTH players have different strategies to that of AT&T.
“We continue to argue that in most countries, fibre ubiquity is unlikely and that a fringe of population is likely to remain outside of super-fast broadband and is likely to continue to require satellite broadcasting infrastructure. Our view is more convincing in low infrastructure countries than in more advanced markets,” adds the bank’s note.