During its results call with analysts, SES explained that its “unparalleled reach” continued to expand. Back in 2016, it reached some 325 million homes (more than a billion people) and was delivering about 7,741 channels. By Q3/2020 its channel count had expanded to 8,157, the Number 1 supplier of channels in the industry.
Drilling down into that picture, SES said that it was carrying about 3000 HD and UHD channels (out of that 8,157 total) and the prospects for Ultra-HD were growing. SES quoted Dataxis forecasts for UHD expansion in Europe and North America which suggested that
UHD channels would be about 60 per cent of the overall total by 2024. Standard Definition transmissions would vanish.
SES spent some time updating the market on the prospects from the FCC’s incentive payments. CEO Steve Collar said that the operator was looking to similar C-band activity in Canada and Brazil, and was also in discussions with US telcos about other benefits from potentially early access to C-band spectrum. Collar explained that this extra monetisation was too early to be specific about but now that the FCC auction results were known it did create opportunities for further dialogue with the auction winners.
Collar also said besides Canada and Brazil and their C-band plans there were two or three other markets where C-band plans were “promising”. He added that the US auction results and their importance to 5G meant that opportunities were being created.
Even under the current FCC incentive payments, Collar said that the first $1 billion would flow by the end of this year (and due December 1st 2021). That cash would be used to “strengthen the company’s balance sheet”. The larger Phase II payments ($2.99 billion) would become due on December 1st 2023 and to be used for a “mix between return to shareholders, strong balance sheet and any disciplined value-accretive Investment”.
The market didn’t much care for the overall results and the likelihood of flat Video revenues (-6 to -9 per cent falls this year, and “flat to low single-digit growth in 2022”). SES shares fell from €6.90 to €6.48 in early trading.
Collar touched on the prospects for industry consolidation, which he said were open to SES but always with the overall intention to be financially prudent.