[10-31-07 – Satellite News] SES Global is likely to order two new satellites over the next few weeks, SES Global CEO, Romain Bausch said Oct. 29 during a conference call to discuss the operator’s third quarter results.
One of the new satellites will be an SES New Skies spacecraft which Bausch said the company needed ahead of schedule. The second spacecraft will be Quetzsat, which will be used to provide service to Mexico. Bausch also said any interest SES Global had in Satmex has been put on the backburner with the news that Mexican satellite operator will not continue with the sale process.   
    In terms of its actual results, SES Global saw a fall in overall revenues but an increase it its net profits. For the quarter ending Sept. 30, SES Global reported revenues of 406.9 million euros ($585.9 million), down from 481.6 million euros ($693.5 million) in the same quarter a year ago, when SES benefited from one-time payments, totaling 83 million euros ($119.5 million) from Connexion by Boeing and Star One.    
    Net profits for the most recent quarter reached 138.8 million euros ($199.9 million), up from 132 million euros ($190.06 million).           
    SES Global’s fleet utilization remains at around 75 percent. SES Astra’s fleet utilization rate is about 85 percent, while SES Americom’s is at 74 percent and SES News Skies at 69 percent.
SES said it expects to deliver revenue growth in excess of 6 percent in 2008. One of the reasons for the optimism is the U.S. market, both in terms of the operators IPTV initiative, IP Prime, as well as opportunities in the overall pay-TV market with both satellite and cable players.
    "It was confirmed that takeup of IPTV in the three telcos which have launched IP Prime has been well over 50 percent — a strong indicator of demand that is likely to prompt the launch of the service by other small telcos,”Sarah Simon, a media equity analyst at Morgan Stanley said in a research note. "Indeed, last week the National Rural Telecommunications Cooperative (NRTC) announced that three further member companies will launch IP Prime, taking the total number to six. Meanwhile, a tier two telco has also announced that it intends to launch IP Prime. We note that our estimates take no account of potential demand from telcos other than those represented by the NRTC. The fact that a Tier 2 telco has signed up is thus a) a strong endorsement of the product and b) an indication that our medium estimates for IP Prime could be too low.”
    Eric Beaudet, a satellite equity analyst at Natixis Securities also pinpointed the U.S. as a key to SES Global’s growth prospects throughout the next few years. "In the U.S., TV bouquets already broadcast over a hundred channels on average and growth over the next few years will mainly be driven by the deployment of HDTV," he said in a research note. "SES is well placed to benefit from this development via its two business models in the region: direct broadcasting by satellite and the broadcasting of channels to cable head-ends.”
    In terms of the cable side, Beaudet noted that SES distributes TV content to more than 10,000 cable head-ends across the United States. A September ruling by the U.S. Federal Communication Commission that cable operators will have to distribute HD signals for local channels in more than 200 regions following the end to the transmission of the analog signal means these cable operators also will  have to lease extra capacity from SES to distribute these HD channels to their network head-ends. “To meet this surge in demand, SES intends to launch four satellites over the U.S. by the end of 2009 to lift its capacity in orbit by 25 percent. We have no doubt that the latter will rapidly reach high utilisation levels,” he said.