Intelsat CEO David Wajsgras: 'Consolidation Makes Sense'

VIA SATELLITE: Intelsat is at an interesting inflection point in its history. Why did you decide to take the role at this time? What excites you about the company’s prospects for the future?

Wajsgras: It’s a great fit. I’ve had a leadership role in taking companies to the next level three times over the past 20 years. Intelsat is clearly ready for that next level. We have a great team, and Intelsat is poised to lead change in satellite communications — not be a follower. We are in a solid financial position; we have a promising multi-orbit strategy for the future; we have an exceptional team of experienced and passionate people; and, as I mentioned, we are well positioned to lead the transformation in this industry. That’s really energizing.

I see us having opportunities for growth in all areas of our business — including the more established ones. I’m very excited about the growth prospects in mobility as well. In commercial aviation, we have exposure to a strongly growing aero market. This is both through the vertically integrated commercial aviation business as well as through partnerships that give us a differentiated position in business aviation. Defense and mobility will be major growth drivers and durable customer bases for Intelsat. Having years of experience in defense, I can definitely help here. These exciting trends and prospects are why I took this role.

VIA SATELLITE: The big talk in the industry right now is consolidation and scale. Eutelsat has just done a deal with OneWeb. There have been reports of Intelsat in talks with SES. Do you believe that going forward, Intelsat will need to partner/merge with another operator in order to compete with the likes of SpaceX and Amazon?

Wajsgras: I can’t comment on speculation of a merger with SES or on other companies for that matter, but consolidation in the industry makes sense. We believe that partnerships among satellite communications companies and bringing together complementary capabilities can drive competition and innovation. This benefits customers and people around the world who rely on seamless connectivity. It is clear that our industry is transforming, with new capabilities and technologies being brought to the market. Intelsat is focused on being a leader in that transformation.

VIA SATELLITE: SES bought O3b. Telesat is building Lightspeed. Eutelsat is acquiring OneWeb. Can Intelsat survive and thrive just with a GEO play? Has it been left behind considering where the industry is moving?

Wajsgras: No. I’m confident that we’re leading the industry in innovation, performance, coverage, and reliability — and we don’t see our future as ‘just a GEO play.’ When it comes to space technology, there is much talk of Low-Earth Orbit satellites, Geostationary satellites, competing bandwidths, and the pros and cons of all these rival technologies. But space innovation is not in the hands of a few individual operators, and anyone claiming a monopoly on disruption is playing yesterday’s space game.

For example, our partnership with OneWeb will leverage the best capabilities of both companies’ networks, relying on hundreds of satellites — in both GEO and LEO made possible by our advanced [electronically steered array] ESA-based terminals.

Intelsat has invested $2 billion to build this next-generation unified network, and we are building partnerships within the industry to benefit customers and our end users. In the MEO [Medium-Earth Orbit], we have some very exciting plans, and our business case will focus on new, as well as existing markets. We are broadening our coverage, increasing capacity, and offering new products to an expanding set of customers. We are on the cusp of expanding 5G into space, merging the power of terrestrial with space capacity, to deliver seamless connectivity. We believe we have to act with the mindset that no one player or one proprietary technology can deliver on this promise. Ultimately, it’s not about which orbit or technology is the solution, but rather delivering for our customers.

VIA SATELLITE: What are your views on a non-GEO play for Intelsat?

Wajsgras: There are very real trade-offs between orbits. GEO will continue to have the best capacity density and unit costs while non-GEO adds improved global coverage, lower latency, and the ability to support smaller terminals for certain applications. Our collaboration with OneWeb will create a better and more reliable in-flight internet connection for airline passengers and crews.

Combining the advantages of Intelsat’s Geostationary satellite network with OneWeb’s Low-Earth Orbit satellites, we companies can provide a solution for end users that is superior to those offered by any single in-flight connectivity company. We have submitted spectrum filings for a new MEO constellation which will give us additional options to expand on our multi-orbit vision. The network of the future needs to integrate all these technologies and that’s why we are embracing 3GPP standards – so that we can integrate services across orbits and across providers with the same seamlessness that users expect from their telecom devices and applications.

VIA SATELLITE: When you look at the potential growth segments for Intelsat, which ones do you believe offer the most opportunity for growth?

Wajsgras: I hope this doesn’t sound like a cop-out – it isn’t. There are remarkable growth opportunities in all areas of our business. In the past, the more mature verticals have provided dependable cash flows; however, there are many opportunities to expand and grow, particularly with our managed services offering, which is becoming an increasingly important part of our business. These types of services provide strategic value, both through yield resiliency and customer stickiness. So, these are a priority.

The Commercial Aviation (CA) acquisition and the managed services tailwind (coupled with ongoing hardware developments for both CA and Government) will enable us to innovate more in the next three to five years than I believe Intelsat has ever done before. We are also looking holistically at the customer’s strategy, and innovation goes beyond the technology itself; we’ve developed a full portfolio of value-added services to make the adoption of satellite services even easier.

Across all vertical markets that we serve, we deliver turnkey solutions including capacity, hardware and professional services, including strategy, network audits, equipment installation and maintenance, and network management. For example, in the past year, we’ve directly managed the deployment of over 10,000 VSAT terminals globally for our MNOs and enterprise customers and we recently set up a business area to go further and support the entire lifecycle of satellite operations. The value-added services we offer eliminate complexity while providing optimized economics for our customers.

Another example is an agreement we just executed with a leading mobile network operator in the Democratic Republic of Congo to manage their entire satellite transmission network as they transition from 2G to 4G.

We serve the most discerning customers around the world across leading media, telecom, technology, enterprise, mobility, and government segments. All of them have rapidly evolving needs, and we are working on extending our ability to add value for them to build on our longstanding, trusted customer relationships.

VIA SATELLITE: You have signed some interesting deals with the likes of Air Canada, Alaska Airlines for example. Is IFC still a main engine of growth for the company?

Wajsgras: Absolutely. Since the acquisition of Gogo Aviation (now called Commercial Aviation), in-flight connectivity and the broader commercial aviation sector is a key part of our ongoing strategy. It is our best example of a vertically integrated sector at Intelsat where we provide everything from the hardware throughput to the capacity and customer connectivity.

Our new IFC and CA operations serve our strategic goal of differentiating competitive advantage. The combination of commercial aviation and Intelsat more broadly gives us experience and insight at both the end-user and satcom levels that no other company can match. This is most definitely a growth area for us going forward.

VIA SATELLITE: The company has made many headlines in recent years due to its financial position. How would you describe the company’s financial position right now? Is it positioned for long-term success?

Wajsgras: Perhaps better positioned than we’ve ever been. Intelsat emerged from restructuring as a private company and reduced our debt by more than half with expectations of further reductions upon receiving the final C-band relocation payments. With a strengthened balance sheet and strong operating model, Intelsat is extremely well positioned for long-term success. In the past six months since I have been leading Intelsat, we have wasted no time building on the strong foundation laid over the last few years. Intelsat is thriving, and to date, we are exceeding our internal targets for both revenues and earnings and seeing a stable financial foothold.

VIA SATELLITE: We are seeing some interesting investment plays when it comes to new satellites. How will Intelsat stay at the cutting edge when investing into new satellites?

Wajsgras: We are always pushing for new technologies and opportunities to serve our customers more effectively. We continue to partner with manufacturers to innovate and keep up with our views of what next-generation capabilities could and should be in order to maximize the benefits we can offer to our customers. Given we operate one of the largest GEO satellite fleets, Intelsat works closely with a number of large and small satellite manufacturers, including large A&D companies, as well as startups. We are continuously innovating because satellite developers see Intelsat as an essential, long-standing customer.

We are among the first to bring high-throughput satellites into the industry. We purchased four software defined satellites, which will enable us to add new capabilities to our existing Ku-band global network. We are the first and only commercial satellite operator to adopt MEVs [mission-extension vehicles] to extend the station/kept life of satellites in orbit.

VIA SATELLITE: Can you outline your investment plans when it comes to technology, satellites and building networks?

Wajsgras: We are investing $2 billion to build the next-generation Unified Network, which will use software-defined space and ground assets, faster-to-deploy satellites and a 5G mobile core. Essentially, we are taking the terrestrial connectivity model and putting it into space with 5G to provide total connectivity. The new network embraces standards and open architecture because the satellite network is no longer a separate system, operating on bespoke hardware and standards. I’m confident that our Unified Network will deliver much better economics and transform the way connectivity is accessed and delivered for our customers.

VIA SATELLITE: What do you see as the balance between video and other businesses going forward as traditional GEO operators start to move away from video?

Wajsgras: Today, a significant portion of our cash flow comes from the distribution of linear video to cable systems, digital terrestrial towers, and directly to viewers’ homes [DTH]. While capacity needed to support these distribution models has dropped in recent years due to enhanced compression and channel consolidation, distribution remains critical to support revenue streams for programmers, broadcasters and DTH operators.

Recently, programmers have invested in direct-to-consumer platforms and engaged in M&A. In parallel, they are re-focusing on their core business and evaluating outsourcing options. We have the ground facilities, as well as the technical and operational expertise needed to manage their distribution infrastructure. Managed services are increasingly important to our business.

Intelsat operates across different market segments, with video representing a majority of all data traffic for most of these segments. For example, video traffic accounted for nearly 70 percent of mobile traffic globally last year. We see the same trend in the Maritime and Aero segments, where video is central to passenger entertainment, in the Enterprise segment for video conferencing, in tele-education, telemedicine, etc. We can leverage our Media expertise to drive revenue for our Media segment but also across all of our other market segments.

VIA SATELLITE: What do you see as the 5G opportunity for an Intelsat? How do you see our industry becoming part of the overall ecosystem going forward?

Wajsgras: 5G isn’t just a standard for the mobile communications industry. It’s becoming a standard for the entire telecommunications industry. Intelsat is a leader in the development of the new 5G NTN [non-terrestrial network] standards which incorporate satellites into the 3rd Generation Partnership Project [3GPP] standards.

We are also developing our next-generation Unified Network based on 5G. It will become easier to interoperate with other 5G networks. Our network will interface with end-user terminals and enable user terminals from other 5G networks to ‘roam’ into our network. We’ll also benefit from the automation, scaling and security features that 5G enables. For too long satellites were seen as an adjunct or not part of mainstream mobility. That’s in part because, in space communications, there has been fragmentation and a lack of standards that slowed seamless connectivity. We’re convinced our Unified Network will change all of this and will reshape the global communications landscape.

VIA SATELLITE: Are we seeing innovation in the ground segment area for the likes of Intelsat?

Wajsgras: As we shift towards software-defined networking, innovation in the ground segment is critical. Let me tell you about some of the key aspects of ground segment innovation. Virtualization of ground segment both at the hub and at the remote site, so the ground segment can be seamlessly integrated into the software-defined solution. This will enable automation, ease of use and end-to-end service management. Innovations in remote-side terminals and antennas. These next generation antennas will support compact and easy-to-use terminals. The delivery of new cloud-native applications and intelligence to the remote sites via the terminals. This helps new services such as Private 5G, IoT and content delivery. As an example of the new cloud-based solutions we can deliver, earlier this year we executed a proof-of-concept demonstration with Microsoft where we connected a private LTE edge solution directly to the Azure Cloud over our Flex Network. This demonstrates our ability to connect customers to major public clouds from anywhere in the world.

VIA SATELLITE: Intelsat has a rich and storied history in our sector. It is synonymous with the satellite industry in many ways. How can it remain relevant in a sector where there is more disruption than ever right now?

Wajsgras: Intelsat is an innovative leader and disrupter. This leadership is built on 50 years of growth and partnerships, which have earned the trust of our customers around the world. Our muti-orbit, software-defined-satellite network will differentiate us from single-orbit alternatives. Our balance sheet restructuring creates opportunities to accelerate investment in growth verticals. We have the opportunity to bring together an alliance of Ku-band partners to capture demand in key growth verticals. Furthermore, our new leadership is invested in redefining how we take our capabilities to market – in the government service sector, for example.

VIA SATELLITE: Have the likes of SpaceX and Amazon been a force for good for the satellite industry? By 2030, how many big global operators do you expect there to be?

Wajsgras: We are only at the beginning of some transformational moves and new technologies in our industry. SpaceX and Amazon have been disruptors, but so has Intelsat. When it comes to providers, a binary discussion misses the reality of our industry. No one company or technology can meet all global communication needs. The future of our industry is defined by the partnerships and collaboration that operators like Intelsat develop and grow.

VIA SATELLITE: Finally, as the new CEO of Intelsat, how do you hope to position the company in your first two years as the CEO? What are your short-term goals?

Wajsgras: There are too many people and places lacking connectivity. I see Intelsat bringing carrier-grade connectivity to address these gaps. There is a large opportunity to extend the role of satcom in the global telecom ecosystem. In the short to medium term, my priorities are returning to profitable growth and maximizing the potential of our people, operational capabilities, and strong balance sheet. We’re reinvesting in growth by focusing on meeting customer needs, today and in the future, in all of our key segments. Looking five years ahead, Intelsat will be an end-to-end provider of seamless and secure services across a multi-orbit, multi-band, and multi-mission network. We will connect the remote and mobile locations that terrestrial technologies can’t easily reach, bringing a seamless extension of the telecom ecosystem to government and commercial users everywhere. I realize all of that is ambitious, but I’m convinced this team can bring it home. VS