SES-Intelsat Table Consolidation To Combat Starlink Threat

Luxembourg satellite operator SES has confirmed that it is in talks with US rival Intelsat for a consolidation. 

In a statement issued on 29 March, SES wrote: “SES S.A. confirms that the company has engaged in discussions regarding a possible combination with Intelsat. At this stage, there can be no certainty that a transaction would materialise.”

The comments came after Bloomberg reported that the companies were nearing a $10b deal including debt. According to the article, the talks seek to join forces to counter what they see as an “emerging threat from Elon Musk.” The article further adds that SES was seeking an agreement within weeks. 

SES was formed on the initiative and support of the Luxembourg Government in 1985 as Société Européenne des Satellites (SES). The Luxembourg State remains a shareholder.

Intelsat was founded as a public-private consortium in 1964 by telecommunication agencies in 18 nations. The consortium contracted with NASA to launch its satellites, the first of which was Early Bird, the first operational commercial satellite providing regular telecommunications and broadcasting services between North America and Europe.

Industry disruption

Telecom operators are rattled by SpaceX’s Starlink constellation, promising fast internet anywhere. According to Le Monde, the network’s theoretical data transmission rate is similar to a good 4G network while latency is 50 times faster than conventional satellites making them adapted to support video calls and gaming networks.  

Amazon’s planned Kuiper constellation also threatens to further disrupt the sector.

In August 2022, the FT reported that Intelsat and SES were in active discussions with Intelsat. At the time, SES CEO Steve Collard told industry publication Via Satellite, “Industry consolidation is a good thing and I think will result in rationalization of the industry. Of course from an SES standpoint, we will do things only in the best interest of our shareholders.” 

According to Via Satellite, two major satellite consolidation deals are already underway — Viasat and Inmarsat are going through regulatory approval to combine, and Eutelsat is going through a deal to combine with Low-Earth Orbit (LEO) operator OneWeb.

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