According to a report by Advanced Television Intelsat has calculated the loss of IS-29e at 50 degrees West (which failed in April) to represent a $70 million EBITDA hit, or $50 million of revenues.

It is planning to move a satellite to replace the missing one temporarily, but will order a new one by the end of 2019. CEO Steve Spengler also said that C-Band Alliance members were likely to spend between $1 billion and $2 billion to place new satellites into orbit, plus the cost of filters to cable and IP clients, if they got a favourable decision from the FCC to auction some C-band frequencies. The Alliance also expects to buy 8 small satellites from Intelsat and SES to replace lost capacity.

The news comes days after it was announced that Intelsat has filed a lawsuit against OneWeb and its investor SoftBank. The suit claims that the defendants
committed fraud and conspired to steal confidential and proprietary information. It stems from Intelsat’s $25 million investment in OneWeb in 2015 and the subsequent unsuccessful merger of the two companies. The investment, Intelsat says, was contingent upon its customers getting access to OneWeb’s communications services, with a commercial agreement making Intelsat the “sole and exclusive worldwide and regional distributor” of OneWeb communications services to customers in four markets: aviation, maritime, oil & gas, and US government.

Subsequently, SoftBank invested $1 billion in OneWeb for 40% of the company. SoftBank then negotiated 100% of OneWeb’s future satellite capacity and became the exclusive global distributor of the company’s communications services. Intelsat objected in 2016 and the three companies agreed that Intelsat could have exclusive distribution, so long as it purchased OneWeb services through SoftBank.

In 2017, SoftBank proposed investing $1.5 billion in Intelsat and combining both Intelsat’s and OneWeb’s assets. This deal fell through in June 2017.

The companies then talked about other commercial arrangements. However, by April 2018, Intelsat alleges that SoftBank “was actively seeking to sell its investment in OneWeb”. In July 2019, Intelsat received a cease-and-desist letter from OneWeb, demanding that it “refrain from representing to distributors that Intelsat possessed any exclusive distribution rights”. Intelsat says it discovered that OneWeb had already begun negotiating the resale of its capacity with distributors and customers.

OneWeb now targets four markets – aviation, maritime, enterprise and government customers – which look remarkable similar to those it agreed Intelsat could sell into in the earlier agreement.

In March 2019, OneWeb announced it had received a further $1.5 billion in funding from SoftBank and other investors, and recently announced its rollout schedule for Arctic coverage (see Greenland says no to Trump, but yes to OneWeb). It has also signed a MoU with Iridium to bundle and market their services.

Satco’s:

  • OneWeb is backed by SoftBank, Airbus, Airtel, Intelsat and Virgin, and plans to have a full constellation of 650 LEO satellites by 2021
  • SpaceX is launching thousands of Starlink LEO satellites
  • Amazon is working on Project Kuiper, a broadband satellite constellation
  • Telesat is building a constellation for business, telecom and government broadband applications
  • Iridium spent $3 billion to replace its constellation of 66 satellites and plans to provide access to customers of AWS in autumn 2019.

 

Posted by Teresa Cottam

Teresa is the Chief Analyst at Omnisperience and has over 25 years' experience in the telecoms and technology markets. She is an expert on SME and enterprise telecoms, and has considerable vertical market expertise. Her research focus lies in helping B2B telecoms firms become more commercially successful by better understanding and meeting their customers' needs. She is a judge of the GSMA Global Mobile Awards (GloMo's) for customer experience and enterprise innovation, and for the UK Cloud awards. You can follow her on Twitter @teresacottam

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