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Bank examines Jio, SES deal

February 15, 2022

A major Joint Venture from Reliance Jio, the giant Indian telco, and satellite operator SES, which will see Jio use the SES capacity for broadband connectivity for its Indian customers. Investment bank Exane/BNPP says the move is a major endorsement for SES and in particular its mPower fleet of satellites.

The bank says: “The endorsement of mPower by the largest Indian mobile telco operator (over 35 per cent market share) is a strong positive underpinning our view that SES Network top line growth will accelerate ahead of consensus expectations once mPower enters into service at the end of this year. We forecast 12 per cent top line growth for SES Networks in FY23, well ahead of VA consensus 3.8 per cent. In terms of users, India is the second largest internet market in the world behind China. While number 2 player Bharti Airtel decided to invest in OneWeb, number one Reliance JIO signed a JV and capacity contract with SES mPower. This JV positions SES well to tap into a significant growth opportunity for mPower.”

The report adds: “This positive development for SES happens at a time when SpaceX was ordered by the Indian government to refund all its pre-orders on Starlink as it has not year received regulatory approval. SpaceX’s Starlink head of India resigned last month. SpaceX recently sent its prospective customer an email arguing ‘Unfortunately, the timeline for receiving licences to operate is currently unknown, and there are several issues that must be resolved with the licensing framework to allow us to operate Starlink in India’. SES is making progress in India while Starlink is struggling.”

SES will report its full-year numbers on February 24th.

Categories: Blogs, Business, Inside Satellite, Joint Venture, M&A

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