Space

Satellite operators weigh strategies for an industry in transformation

PARIS — The satellite industry’s largest and most established operators are bracing for major disruption as consolidation and new entrants shake up the state of play.

“The way the industry looks today with the core players may or may not look the same in the next couple of years,” Intelsat CEO David Wajsgras said during a Sept. 13 World Satellite Business Week panel here.

The entry of Starlink’s low Earth orbit constellation is increasing competition in the broadband market, which has become an important source of growth for the industry amid declining revenues from broadcast services.

Eutelsat is seeking to merge its business in geostationary orbit with OneWeb to compete more effectively in connectivity markets. Viasat is also in the middle of acquiring Inmarsat as part of a multi-orbit plan to build scale internationally.

Wajsgras did not specifically address industry speculation that Intelsat is in talks about merging with SES but said Intelsat is “considering various types of opportunities that will help support our growth path” in response to this changing landscape.

“I can tell you with absolute certitude in the next three to four years there’ll be other new players that will also be disruptive companies [that] most of us have never heard of yet,” he said.

“And companies that we’re looking at today that we think are on the right glide path may just drop off, drop out of existence for one reason or another.”

He said the ability to manage the supply chain issues in the industry, which could last “another couple of years before things really settled down,” will be crucial.

“The companies that execute managing the supply chain best will be the companies that end up on top,” according to Wajsgras.

SES CEO Steve Collar said worsening macroeconomic conditions will create winners and losers in the industry. Inflation and recessionary pressures will also make investors more discerning about the projects they support, Collar said.

While he declined to comment specifically on whether SES is negotiating a merger with Intelsat, he has previously discussed consolidation in general terms as a positive move to help make the industry more sustainable.

Telesat CEO Dan Goldberg said consolidation is “good for the sector” during the conference session.  

He said the scale of investments needed to be competitive in bringing customers the connectivity they are demanding is partly driving the activity.

“And some of it’s coming from … two new big entrants that we’re having in the sector: SpaceX/Starlink being one and Amazon the other — and here again, they are bringing very large, very capital-intensive broadband connectivity infrastructures to market.”

He said Telesat remains hopeful of securing the remaining funds the GEO operator needs for its planned Lightspeed LEO constellation, despite the project’s manufacturing delays and rising costs.

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