Intelsat expects record revenues; American Eagle deal
December 4, 2023
By Chris Forrester
Intelsat’s CEO David Wajsgras, speaking at the company’s investor day, said that the company expects record revenues this year, of about $2.1 billion (€1.9bn), up slightly on the $2.084 billion from 2022. Intelsat is considering creating a Medium Earth orbiting fleet of satellites. It had issued a ‘Request for Proposals’ this summer. Intelsat will decide whether to make the investment by mid-2024.
Wajsgras said that Intelsat was transitioning from a simple bandwidth supplier and focusing more on end-to-end solutions for its clients.
“We were wholesale bandwidth providers, we’ve evolved with our customer group,” Wajsgras told investors. “The folks that can execute and deliver end-to-end connectivity are the companies that are going to win in this new industry. We’re now looking at about a $50 billion total addressable market — three to four times the size of what we were looking at before.”
He added that Intelsat was now in a very good place and the best financial position for a long time. Eighteen months ago, Intelsat emerged from Chapter 11 bankruptcy and a debt burden of $16 billion. Its post-bankruptcy position was debts of $7 billion. In October it received more than $3 billion in compensation from the FCC and taking the overall FCC payments to $3.8 billion for having released certain C-band frequencies.
Intelsat expects annual growth of some 5 per cent for the next few years
CFO Toby O’Brien amplified the financials saying that Intelsat had begun 2023 with some $5.8 billion in debt. Since then it had paid down about $2.8 billion of that debt and paid off the balance of an $840 million term loan. By the end of this financial year it expects net debt to be $2.1 billion.
“[This is] clearly the best position the company has been in a long, long time, with flexibility to create value as we move forward,” O’Brien said.
A December 13th shareholder meeting is expected to confirm resumption of dividends (of about $1.2 billion) and a $200 million share repurchase scheme.
Confirmed backlog is about $4.5 billion. Importantly, and in a bright spot compared with many other operators, Intelsat expects to see some stabilisation in its Video business in 2024 and 2025.
Intelsat is also working with Eutelsat’s OneWeb low Earth orbiting fleet and explained that competition from SpaceX’s Starlink system had “raised everyone’s game” and that Intelsat was competitive. However, Wajsgras said that Intelsat might well end up competing with OneWeb and Starlink.
Meanwhile, Intelsat is to equip almost 500 jets operated by America Eagle with its In Flight Communications (IFC) and broadband connectivity. Delivery of the equipment will start in 2024 and take two years to complete.
Intelsat is providing dual-function aircraft terminals that can connect to its own geostationary fleet in addition to low Earth orbit craft operated by Eutelsat OneWeb.
Intelsat has similar orders in place with Alaska Airlines, Air Canada and last week confirmed an order with Aerolineas Argentina.
American Airlines, in its announcement, said it had also made ICE equipment available on 900 aircraft across its main fleet earlier in 2023, using geostationary satellites from Intelsat and other operators.
The Intelsat/OneWeb service would enable passengers to stream content, browse and check emails while in-flight.