Intelsat’s extra $4bn target
May 1, 2019
Intelsat’s CEO Steve Spengler, talking to analysts following on from the company’s Q1 results, said that newly introduced managed services are expected to provide $4 billion of increased revenue opportunity industry-wide through 2023.
One of the extra services is a “blended satellite wireless Internet service that provides reliable cloud access regardless of location”. Spengler said that these managed services are an operational priority for the company throughout 2019.
Spengler also addressed the ‘C-band question’ which is the hottest of hot topics for members of the C-Band Alliance (which as well as Intelsat includes SES, Eutelsat and Telesat). “Based upon comments made by the FCC, accelerating the deployment of 5G remains a top priority for the administration. The FCC controls the timing of the order be it a month from now or later this year. Regardless we’re completing all of the work necessary to implement our proposal the moment the FCC issues an order. As we said in our last quarter call, we’ll be ready to deliver on our commitment.”
Spengler said that if the FCC came out with a demand that 300 MHz of spectrum to be freed up for 5G, then “there is a potential path to clearing more in the future that path requires that new technology be implemented in our customers networks specifically HEVC, which is a higher efficiency coding method for television in content transmission. That technology is not necessarily viewed mature and we understand that there are also some intellectual property challenges with its implementation.”
The C-Band Alliance’s workflow timeframe for an overall 300 MHz release would be “five years plus,” said Spengler.
As to Intelsat’s financials, the new guidance given by the company for the rest of the year ahead are for revenues to be about $60-$70 million less. Around $45-$50 million of this shortfall is a direct result of the loss of Intelsat IS-29e which was declared a total loss last month.
Intelsat will replace the lost IS-29e satellite at 310 degrees East and is now studying how best to fill the slot pending a longer-term solution.
CFO Jacques Kerrest explained that the loss of IS-29e represented a ‘triple hit’ in terms of income. “One, we are losing current customer on the 29e satellite. Two, we had some new revenue expectation on that satellite. So that’s the second bucket of loss. Then, the third bucket of losses, we are obviously using capacity on our own satellite to restore our customers and therefore we will not be able to sell this.”