Bank: “C-band close to finish line”

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A report from investment bank Exane/BNPP suggests that ‘decision day’ for the C-Band Alliance (CBA) will soon hear from the Federal Communications Commission (FCC) with its verdict on the CBA’s proposals.

“Our review of the FCC record suggests that alternative proposals to the CBA are not gaining traction. With the likes of Altice, Dish and Comcast likely to bid for C-band, the number of bidders looks greater than expected. This bodes well for pricing and suggests that market expectations on the C band outcome remains too conservative in our view. FCC newsflow on October 4th, 29th or November 21st could be a catalyst,” says the bank’s satellite analyst Sami Kassab.

The bank says it remains confident that satellite operators will soon be able to monetise their C-band spectrum usage rights. “Our review of the FCC record shows that alternative proposals are not gaining traction and have been opposed by major stakeholders such as Disney, ATT, Verizon or the Church of Jesus Christ (a major operator of C-band earth stations).”

Kassab adds: “We also believe that Eutelsat is unlikely to hold out on the auction. It is not in its financial interest, in our view, and we believe its legal case to challenge a license modification under Section 316 looks thin. We argue that the number of large bidders for C-band spectrum could also surprise on the upside. In addition to Verizon, ATT we see Comcast, Charter, Altice and Dish as interested in a large number of geographic areas (PEAs). This bodes well for pricing.”

“Based on our C-band valuation analysis we believe that the market is currently far from pricing the favourable scenario we see for satellite operators. We argue that the market is currently assuming C-band price realisation of around USD0.15 per Mhz POP (assuming SES core business is valued at 7.5x). We believe the large number of bidders could push prices towards our assumption of USD0.30 per Mhz POP,” says the bank.

The report says that publication of the agenda of the FCC monthly meetings on October 4th (for the October 25th meeting), October 29th (for the November 19th meeting) or November 21st (for the December 12th meeting) could include reference to the C band proceeding and act as a positive catalyst for satellite share prices.


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