dailywireless.org » Global Satellite Providers Now Three

Global Satellite Providers Now Three

SES Global, the world’s largest operator of satellites, has agreed to buy rival New Skies Satellites for $760 million in cash to boost its presence in Latin America and the Indian Ocean region.

SES Global said on Wednesday it would pay $22.52 per share, or $760 million, for New Skies and refinance the company’s estimated $400 million of debt, bringing the deal’s enterprise value to about $1.2 billion. SES Global operates, SES ASTRA in the EMEA region (Europe, Middle East and Africa) and SES AMERICOM in the Americas and hold strategic participations in satellite operators AsiaSat, SES SIRIUS, Nahuelsat and Star One as well as in a number of satellite service provision companies.

The satellite industry has been undergoing rapid consolidation and attracting large investment over the past two years, with Intelsats proposed $3.2 billion purchase of PanAmSat expected to close next year, creating an operator that will overtake SES Global as the world’s largest. A combined Intelsat/Panamsat would have 53 satellites with customers in over 220 countries and more than $1.9 billion in annual revenue say industry observers.

That deal is under review by regulators.

The integration of New Skies’ satellite assets will extend SES’ presence in India, the Middle East and Africa as well as Latin America. About 80 percent of SES Global’s 1.1 billion euros ($1.3 billion) of revenue in 2004 came from video transmission for TV broadcasters including BSkyB and Time Warner.

New Skies is registered in Bermuda, but its main operating subsidiary is based at The Hague in the Netherlands. It has five satellites and annual revenue of about $233 million. New Skies was formed by a 1998 spin-off from Intelsat when Intelsat was going private.

The New Skies satellites are:

NSS-7 at 22.0 degrees West, a high-capacity satellite featuring 97 transponders and 11 C- and Ku-band beams interconnecting the Americas, Europe, Africa and the Middle East. This spacecraft was launched in April 2002 with an expected End of Life (EOL) of 2015.
NSS-6 at 95.0 degrees East, another high-capacity satellite (60 transponders) with 6 Ku-band beams interconnecting Europe, Africa, the Middle East, the Indian subcontinent, Asia and Australia. This spacecraft was launched in December 2002 with an EOL of 2019.
NSS-806 at 40.5 degrees West, a satellite with 36 C-band and 6 Ku-band transponders, was launched in February 1998. This spacecraft is used principally for Direct-To-Cable services in the Americas with an expected EOL of 2016.
NSS-5 at 177.0 degrees West, a Pacific Ocean satellite featuring 55 C-band and 12 Ku-band transponders, was launched in September 1997 with an expected EOL of 2015.
NSS-703 at 57.0 degrees East, a spacecraft with 38 C-band and 20-Ku-band transponders was launched in October 1994. This satellite’s expected EOL is 2009 and will be replaced by NSS-8, scheduled for launch next year.

In addition, NSS-8 is currently under construction by Boeing and slated for launch aboard a SeaLaunch in the second half of 2006 to 57.0 degrees East, replacing NSS-703 with increased performance and coverage. NSS-8 will feature 92 transponders with 9 C- and Ku-band beams interconnecting Europe, Africa, the Middle East, India and Asia.

New Skies Satellites NV was acquired by The Blackstone Group, a private investment and advisory firm, for $956 million in cash. The Dutch satellite company, New Skies Satellites NV, one of only four fixed satellite communications companies with global coverage, has five satellites in orbit and ground facilities around the world.

Today, some 200 geostationary satellites are in service. And there’s a new sheriff in town with the takeover of Intelsat, PanAmSat, Eutelsat and New Skies — the biggest satellite operators in the world — by private equity bean counters.

The Top Fixed Satellite Operators, include Intelsat, SES GLOBAL and PanAmSat. They may soon be joined by a new generation of powerful cellular satellites using terrestrial repeaters which will compete with cellular providers as well as LEO-based Iridium and Globestar. Inmarsat, provides maritime communcations.

European-based SES GLOBAL is the largest satellite company, operating a fleet of some 35 satellites. It rests on a more traditional shareholder base, which includes GE Capital, international financial institutions, and communications groups. It was born out of the combination of ASTRA, Europe’s leading provider of satellite capacity for direct-to-home reception, and US-based AMERICOM. Their network holds interests in; AsiaSat, Nordic Satellite AB, Nahuelsat, Star One, SATLYNX and WORLDSAT. The largest supplier of satellite services in the U.S., SES AMERICOM currently operates a fleet of 16 spacecraft in orbital positions predominantly providing service throughout the Americas. They also run AMERICOM Government Services to provide services for the military. SES ASTRA is the leading Direct-to-Home (DTH) satellite system in Europe, delivering services to some 103 million Direct-to-Home and cable households. The ASTRA satellite fleet currently comprises 13 satellites, transmitting more than 1400 analogue and digital television and radio channels as well Internet services.
Intelsat, the second-largest global satellite operator with 28 satellites in orbit, also leases capacity on two others. They delayed the launch of its Intelsat Americas-8 satellite after a recent failure. Intelsat did a $3 billion deal with Apax Partners and Zeus Holdings Limited. Lockheed Martin owns a 24 percent stake in Intelsat, which is incorporated in Bermuda but headquartered in Washington, D.C.
PanAmSat, the third largest operator with a fleet of 25 satellites, sold out to affiliates of Kohlberg Kravis Roberts & Co., L.P., The Carlyle Group and Providence Equity Partners, for approximately $2.6 billion. KKR now has 43.5 percent stake while Carlyle and Providence each hold 26.9 percent stake. PanAmSat owns and operates satellites worldwide as well as the AMC-16, a hybrid Ku- and Ka-band satellite will be ready for high-speed data and digital video services throughout the U.S.. Their Americom 2Home customer, EchoStar Dish Network, may market it.
Inmarsat is replacing their Inmarsat-2 and Inmarsat-3 spacecraft for martime communcations with Inmarsat’s new Broadband Global Area Network (BGAN), their global broadband service for mobile devices. BGAN is the world’s first mobile communications service to provide both voice and broadband data simultaneously through a truly portable device on a global basis. Following the successful launch of Inmarsat’s second I-4 satellite, November 8, network coverage will be extended to North and South America from Q2, 2006. The two I-4 satellites will deliver seamless broadband coverage across 85 per cent of the world’s landmass and be available to 98 per cent of the world’s population. A call from an Inmarsat mobile terminal goes directly to the satellite overhead, which routes it back down to a gateway on the ground called a land earth station (LES). From there the call is passed into the public phone network.
British Telecom, the UK’s largest telecom company, sold its 15.8 percent stake in Eutelsat, to a Goldman Sachs Group for $690 million in cash. Eutelsat has capacity on some 24 satellites that provide coverage from North and South America to Far East Asia.
Rupert Murdock, with a studio and a network, is not a satellite operator but a major user of their services. He picked up controlling interest in DirecTV for $6.6 billion. Murdock’s reach is breathtaking. His pay satellites include BSkyB (United Kingdom and Ireland), Fox Sports (Australia), Foxtel (Australia), Sky PerfecTV (Japan), Star (Asia), and Stream (Italy). Murdock plays to win and HDTV may be the new battleground. Two-way satellite access, the only real option for many islanders, is getting pushed aside.

Direct-to-home satellite television companies such as DirecTV Group and EchoStar are not considered Fixed Satellite Providers. Likewise, Inmarsat of London and Mobile Satellite Ventures of the United States, operate geostationary-orbiting spacecraft for mobile satellite services and are not considered Fixed Operators. Only SES Global, Panamsat, Intelsat and Inmarsat have a truly global reach. If Intelsats proposed $3.2 billion purchase of PanAmSat goes through there would be just two global FSS satellite providers; SES Global and Intelsat.

The US is currently the top Internet hub country, reports Om Malik, with 1.4 terabits/second of bandwidth. World’s fattest pipes are between London and New York, about 320 GB/s of bandwidth.

Fiber wins the capacity war — no contest. Satellites are often restricted to 500 MHz of bandwidth in the C and Ku bands. That’s less bandwidth than modern residential cable televison systems.