After two scrubbed launch attempts, SpaceX successfully launched the heavy Intelsat 35e EPIC Next Generation satellite to geosynchronous orbit aboard a Falcon 9 rocket from NASA's Kennedy Space Center in Florida. SpaceX, which did not attempt to land the first stage of the Falcon 9 rocket onto a drone ship due to the mission requirements, has now completed ten launches this year and three in the past 13 days.
For Intelsat, the successful launch is especially good news. With over $14 billion in debt and a market capitalisation of under $400 million (its shares are currently trading in the $3 range) Intelsat is racing to migrate customers off an aging fleet of legacy satellites and onto its EPIC NG satellites. After the launch, Stephen Spengler, CEO of Intelsat, stated that the successful launch of Intelsat 35e was a major milestone in its business plan for 2017, furthering the footprint and resilience of Intelsat's EPIC NG infrastructure.
These new satellites are the future of Intelsat, at least that is the plan now that a previously announced plan to merge with OneWeb, a hot new venture backed by Softbank, the Virgin Group, Airbus, Cocacola, Qualcomm and others, was unexpectedly dropped last month. OneWeb aims to transform space communications with hundreds of low-earth orbit (LEO) satellites. Merging with Intelsat would bring the possibility of combining LEO and GEO satellite constellations. The deal was also expected to bring in much needed cash to Intelsat, which for now really needs its EPIC NG satellites to meet or exceed its technical and economic expectations.
Intelsat EPIC Next Generation
The newly-launched Intelsat 35e satellite is the fourth of seven planned EPIC NG high throughput satellites. Intelsat 29e, launched in January 2016 from French Guiana aboard an Ariane 5 launch vehicle, brings high throughput capacity in both C- and Ku-band over the Americas and North Atlantic Ocean region.
Intelsat 32e
Intelsat 32e, launched February 2017 from French Guiana aboard an Ariane 5 launch vehicle, while part of the EPIC fleet, is operated by Intelsat on behalf of SKY Brasil.
Intelsat 33e
Intelsat 33e, launched in August 2016 from French Guiana aboard an Ariane 5 launch vehicle, brings high throughput capacity in both C- and Ku-band to the Africa, Europe, Middle East and Asia regions from 60°E. Customers include maritime broadband providers GEE, Speedcast and Marlink; in-flight providers Gogo and Panasonic Avionics, a Pakistan ISP called SuperNet, Telkom South Africa, Orange Cameroon, IP Planet, Vodacom, Djibouti Telecom and Africell RDC SPRL, Russian network service providers Romantis and RuSat and several TV and radio broadcasting companies, including Television and Radio Broadcasting of Armenia and MultiChoice of South Africa.
Intelsat 35e
Intelsat 35e will cover the Americas, Europe and sub-Sahara Africa from the 34.5° west longitude. It carries a unique payload of C-band wide- and spot-beams for applications including wireless backhaul, enterprise and mobility services. A customised high power wide beam will be used for DTH service delivery by Canal+, with additional confirmed customers including Orange, INWI, Tele Greenland, Sonatel, Marlink, Speedcast, ETECSA and eProcess.
Intelsat 37e
Intelsat 37e is scheduled for launch in August 2017 from French Guuiana aboard an Arianne 5 launch vehicle. Its orbital location has not yet been listed.
Two additional satellites in the EPIC NG line have been mentioned but so far the company has not reported a production contract, a launch partner contract or even a timeline for when these might enter service.
Intelsat first unveiled its EpicNG platform in 2012. It is based on a new approach to satellite and network architecture utilising multiple frequency bands, wide beams, spot beams and frequency reuse technology. Epic NG is the company's next generation of satellites, promising higher throughputs and lower cost per bit. It will be a complementary overlay to the company's existing constellation of satellites and global IntelsatONE terrestrial network.
Intelsat’s Epic NG satellites were designed and manufactured by Boeing on the Boeing 702MP satellite bus, a platform that weighs up to 6,100 kg (13,400 lb) and supports power outputs from 3 to 18 kW. Compatible launch rockets for the Boeing 702MP include the Atlas V, Ariane 5, Delta IV, Falcon 9, Proton and Sea Launch systems, although for the EPIC program Intelsat has contracted with Ariane Space and SpaceX. The EPIC satellites have a design life of 15 years, so the current generation of Intelsat satellites could remain in commercial service until the early 2030s if they have not been superseded by other platforms.
Company profile and its legacy fleet
Intelsat was founded in 1964 as an inter-government organisation for managing the new field of space communications. Its first satellite went into service over the north Atlantic a year later. In July 2001, Intelsat became a private company. In 2005, it was acquired for $3.1 billion by four private equity firms: Madison Dearborn Partners, Apax Partners, Permira and Apollo Global Management. In 2006, Intelsat acquired PanAmSat, then the largest satellite carrier of TV channels, in a deal valued at $4.3 billion. In 2013, Intelsat was relisted as a public company and its shares are traded on the NYSE under the symbol 'I'. Intelsat maintains its headquarters in Luxembourg and an administrative office in Tysons Corner, Virginia.
Intelsat currently has a fleet of approximately 50 in-service satellites, 8 teleports and the IntelsatOne terrestrial network. The in-service satellites cover 99% of the world's populated regions, including market access in approximately 200 countries and territories.
How much traffic is carried over this network?
At an investor event at the end of April 2017, Intelsat disclosed that its fleet is currently carrying over 5,600 video channels, including approximately 900 high definition channels. System utilization is listed at 78% of total available capacity of approximately 2,050 station-kept units (36 MHz). (NB: this station-kept transponder count does not include Intelsat EPIC NG capacity).
Financial profile
For Q1 2017, Intelsat reported total revenue of $538.5 million and net loss of $34.6 million. EBITDA amounted to $398.1 million and adjusted EBITDA was $409.8 million, or 76% of revenue for the three months ended March 31, 2017. The Q1 revenue total represented a 3% decline compared to $553 million in the first quarter of 2016. Net loss attributable to Intelsat was $35 million for the three months ended March 31, 2017, compared to net income of $15 million in the prior year period. Intelsat said the net loss reflects lower revenues, an increase in interest expense and greater depreciation related to the satellites placed into service over the course of 2016.
At the same investor event on April 27, 2017, Intelsat affirmed its full-year 2017 guidance, saying its revenue is projected to be in a range of $2.180 to $2.225 billion. Full-year 2017 adjusted EBITDA is expected in a range of $1.655 to $1.700 billion. Recently, Intelsat disclosed that the U.S. government has contracted capacity on both Intelsat 29e and 33e, representing a total capacity of approximately 180 MHz.
In April 2017, Liquid Telecom signed a new, multi-year agreement for dedicated services on Intelsat 33e including a ground networking solution based upon technology developed under the European Space Agency-funded Project Indigo. The new Intelsat Epic NG services will expand Liquid Telecom's coverage and network capabilities across the Democratic Republic of Congo, Kenya, Malawi, South Africa, Tanzania, Uganda, Zambia and Zimbabwe, where demand has grown for VSAT technology to deliver connectivity to underserved remote or rural areas.
(Part 2 will discuss the abandoned OneWeb transaction and other key trends in satellite networking.)
