Photo: Via Satellite archive

It has been a busy start to the year for a number of the big operators in the satellite sector, with a slew of capacity deals already announced, and some major news in context of the industry as a whole. Over the last two weeks, Eutelsat reached a major new European deal worth 100 million euros ($121.2 million), Intelsat announced plans to emerge from Chapter 11 bankruptcy with its debt cut in half, and Viasat released an update on ViaSat-3. However, it is clear that over the last two weeks, there really is only once place to start.

Telesat

Telesat, the Canadian satellite operator, has for many years been seen as maybe the smaller member of the “Big Operators” club. However, over the next few years, this could really change as it has perhaps the most ambitious strategy of all the major operators when it comes to its non-Geostationary (GEO) play (SES might disagree with that assessment). The operator unveiled plans years ago to launch a near-300-satellite Low-Earth Orbit (LEO) constellation as it looks to become a key player on the global broadband landscape. While the operator’s plans were delayed (Telesat originally planned for the first satellites to be launched this year), it has now taken a key step toward making its ambitious plans a reality.

It was little secret the deal to build Telesat’s constellation was going to be perhaps the biggest single deal in 2021, given the breadth and the scope of the network. It was always thought Thales Alenia Space would be the frontrunner and it was proven out, when Telesat announced Feb. 9 that the French satellite manufacturer will build the constellation, in a deal worth $3 billion. Telesat is investing $5 billion in this project. This was a huge milestone for Telesat as it looks to become one of the winners in the new LEO space. CEO Dan Goldberg made clear this is the company’s largest capital investment to date.

Commercial services are likely to begin in late 2023, with a full global service targeted for the second half of 2024. With the space race heating up, and many targeting new verticals and customers, it is hard to predict the winners and losers over the next few years. But we can say that Telesat is definitely not lacking in ambition, and the coming decade will be a defining one for the company.

Viasat

Viasat has started the year at a rapid pace with a slew of deals, as Rick Baldridge looks to make a mark as the company’s new CEO. However, despite the impressive dealflow, the big Viasat news concerns the latest with its first ViaSat-3 satellite, which will now see a delayed launch. This satellite will now not likely launch until early 2022. ViaSat-3 is a constellation of three ultra-high-capacity satellites that will deliver broadband service to residential, aviation, and government transport users. In the previous quarter, Viasat had targeted a late 2021 launch. Baldridge said during the company’s Third Quarter (Q3) 2021 financial report call on Feb. 4 that work on the program has been hindered by a wave of COVID-19 cases in Arizona.

In its most recent results, Viasat reported $576 million in revenue in Q3 2021, a 2% decrease from the same quarter in 2020. Revenue grew sequentially, up from $554 million in Q2. Net income in Q3 was $6.8 million, an increase of 4.6% during the quarter in the year prior.

Viasat has started 2021 strong in the In-Flight Connectivity (IFC) sector, and after a recent deal with Delta Airlines, has followed that with a new deal to bring IFC services to Russia. Viasat has joined forces with Gazprom Space Systems and Russian telecoms operator TMC LLC (TMC) and signed an MoU to bring better IFC services across Russia, and its 11 time zones.

Also, over the last two weeks, Viasat announced that Airbus has awarded Viasat’s United Kingdom entity an $8.5 million contract to upgrade the Ultra High Frequency (UHF) satellite communications Network Control Stations (NCS), delivering the UHF Skynet capability to the U.K. Ministry of Defence (MOD). This upgrade will leverage Viasat’s Visual Integrated Satellite communications Information, Operation and Networking (VISION) software platform, enabling the MOD to comply with the latest Integrated Waveform (IW) requirements, known as IW Phase 2. Viasat also announced that it has successfully demonstrated through-the-blades Beyond Line of Sight (BLOS) Ka-band satellite communications connectivity to a U.S. Army UH-60M rotary-wing helicopter.

Eutelsat

Eutelsat received a new contract worth over 100 million euros over the last two weeks, a highlight for the operator. The European GNSS Agency (GSA) has contracted with Eutelsat for the development, integration and operation of its next-generation EGNOS GEO-4 service. EGNOS is the European Geostationary Navigation Overlay Service that acts as an augmentation service to global positioning systems, to improve the reliability of positioning information. Eutelsat already operates the EGNOS GEO-3 payload on its EUTELSAT 5 West B satellite which entered into service in February 2020. Built by Airbus Defence and Space, EUTELSAT HOTBIRD 13G satellite, which will host the EGNOS GEO-4 payload, is scheduled to be launched in the first half of 2022.

Eutelsat also released its latest financial results. The company saw revenues and profits fall slightly in the six months to the end of December 2020. For the six months to the end of December, the operator achieved revenues of 628.5 million euros ($762.2 million), a 1.3% decrease compared to the same stage last year. The company reported profits of 137.4 million euros ($166.7 million), a 2.3% decrease compared to the same stage last year.

Eutelsat also said the pandemic has continued to affect operations for satellite manufacturers and launchers, causing it to push back the target launch dates for three satellites. QUANTUM is now expected to launch in the Second Quarter (Q2) of 2021, pushed back from Q1 2021. HOTBIRD 13G is now expected to launch in H1 of 2022, pushed back from H2 2021, and KONNECT VHTS is now expected to launch in H1 2022, pushed back from the very end of H2 2021.

Intelsat

Intelsat announced Feb. 12 that it has put forward a plan to emerge from Chapter 11 bankruptcy with its debt cut by more than half – from nearly $15 billion to $7 billion. The operator has filed a plan of reorganization after negotiations with creditors. According to the plan, 95% of the company’s new shares will go to Intelsat Jackson unsecured debt holders.

The company said in a Feb. 12 announcement that the plan has the support of holders of approximately $3.8 billion of the company’s funded debt. The company has requested a hearing on March 17, 2021 to seek court approval of the disclosure statement and establish procedures to solicit votes on the plan. Intelsat expects to emerge from Chapter 11 in the second half of 2021.

Intelsat filed for Chapter 11 on May 13, 2020, in order to restructure its debt so that it could participate in the FCC’s C-band clearing initiative and receive accelerated relocation payments for doing so. Intelsat is eligible to receive $4.87 billion, about half of the total payments, in addition to relocation cost reimbursement.

Iridium

Iridium released a strong financial result for 2020, capping off a year of subscriber growth, reporting a record total revenue in 2020 of $583.4 million. The company also initiated a $300 million share repurchase program to reward shareholders. Iridium’s financial results released Feb. 12 reported $146.5 million in Q4 revenue, a 5% increase compared to the same time period in 2019. The company ended the quarter with 1,476,000 total billable subscribers, a growth of 14% year-over-year, driven by growth in commercial Internet of Things (IoT) and government business.

CEO Matt Desch said on Thursday’s investor call that the financial transformation Iridium undertook over the past few years updating its network is now complete, as the operator just hit the two-year anniversary of the completion of the Iridium NEXT constellation. Desch said the company is now a strong, profitable, and growing cash flow generator, and its enterprise-to-EBITDA multiple differentiates Iridium “from the traditional financial profile and competitive position of other satellite companies.”