SES CEO Steve Collar, speaking exclusively to Advanced Television, says that while the company is waiting for the FCC’s final text of its Order in regard to C-band, he was confident that the core terms outlined by the FCC would stay in place, and that SES could totally meet its obligations.
He said he was disappointed by the market’s March 2nd reaction to the planned changes at SES. “The market’s reaction was pretty extreme for two reasons: We had not updated our [financial] guidance since 2018, and as far as the Dividend cut, we had articulated pretty clearly the reasons and how we were going into a big CapEx demand in 2021. The market has probably not totally understood our commitment to long-term dividends and a return [of cash] to shareholders. But the news we rolled out was positive and exciting and certainly so in respect to C-band. Everything there has moved forward meaningfully, but perhaps our strategic transformation has got a little lost in the narrative.”
Collar explained how the US would be populated with its new satellites to address the changes demanded by the FCC. “Going from 500 MHz of spectrum to 200 MHz means a lot more orbital slots. We have those slots. We will re-populate slots that we have consolidated over the past 15 years or so. The good news is that there are plenty of clients who still have dishes pointing to those old positions.”
He added: “Our consolidation was focused on the C-band neighbourhoods, and those serving the Western half of the US have been reduced. Part of the plan is to now re-initiate services from these old orbital positions. But we are going to work with our customers to upgrade their equipment, much of which is old and perhaps not the most efficient. This includes fibre services as well as modulation and coding aspects. Improving efficiencies at the head-ends has never been that necessary until now but now is a good time to improve and rationalise.”
By the end of 2023, Collar said that while it was true that this new fleet of satellites would be paid for by the winning bidders of the 5G auction, “it was not the new fleet that we would ideally design”.
He said the new satellites would be relatively small, with fewer transponders than normally would be the case. “It only makes sense to do this as part of the FCC plan but we are not able to leverage the sort of scale that we might do normally. These will be eligible expenses and eligible costs as part of the C-band replacement scheme. They will remain as C-band, and it isn’t our plan to add other frequencies simply because the time frame that we have to meet requires [the new satellites] to be simple, plain vanilla, C-band dedicated and standardised satellites that can launch quickly.”
Collar addressed the recent relationship with Intelsat, and again expressed his feelings. “We were disappointed at Intelsat’s 11th-hour change of direction and change of heart. It was in our view transparently motivated and regrettable after having worked with them for some two-and-a-half years at the C-Band Alliance. But we fully intend to hold Intelsat to their commitments to the Alliance and that they made to SES over this period.”