SES CEO on satellite broadband company’s difference from SpaceX’s Starlink

PARIS — European satellite broadband operator SES wants to distinguish its services from the likes of industry challengers in SpaceX’s Starlink and Amazon’s Kuiper, as the company looks to reinforce its market position.

SES CEO Steve Collar, speaking to CNBC at the annual World Satellite Business Week conference, said his company’s services, supported by satellites orbiting further above the Earth’s surface than the new rivals’, deliver “high-end” connectivity for more demanding enterprise and government uses.

“We deliver effectively the satellite equivalent to dedicated fiber to a commercial building,” he said, as opposed to the “best effort,” “contended service” that consumer households receive.

Collar’s company operates broadband satellites in two different types of orbits: Geosynchronous (GEO) and Medium Earth Orbit (MEO), whereas SpaceX and Amazon’s networks are designed for Low Earth Orbit (LEO) and aim to increase both the speed and coverage area compared with traditional systems.

SpaceX is currently leading among those building LEO broadband networks. Starlink has about 3,000 satellites in orbit and around 500,000 total customers, most of which are individual consumers. Starlink also recently signed an agreement with Royal Caribbean Cruises to offer satellite internet onboard.

But SES has its own partnership with the cruise company, and Collar estimated his company delivers about half of Royal Caribbean’s current satellite services. Starlink, he said, is “not the same service that we deliver.”

“I think what [Royal and Starlink] are looking to do is create a sort of thin layer of connectivity that they can use for all ships, and then have additional services onboard the largest ships that need the high throughput and guaranteed connectivity,” Collar said.

“I’m not sure that architecturally SpaceX can deliver a non-contended service — I think their whole thing is effectively a best effort service,” Collar added.

SES is adding to its existing MEO constellation of satellites with upgraded satellites called mPOWER. The first pair will launch by the end of this year and begin operations next year, Collar said.

The company wants to further build out its MEO network and aims to have satellites orbiting from pole-to-pole, instead of just over equatorial regions.

SES last month reported results for the first half of the year, with revenue of 899 million euros, up about 3% from the year before, and an adjusted EBITDA profit of 545 million euros that was flat year over year.

Collar noted a decline in SES’ core satellite video business, but said that was expected.

A shift is underway in satellite communications – the space industry’s largest market – from video broadcast to data services, highlighted by a flurry of consolidation in the sector. Two major mergers are underway, with European GEO operator Eutelsat merging with British LEO challenger OneWeb, and U.S. GEO operator Viasat buying British GEO operator Inmarsat.

Collar said video “will continue to decline low single digits from now until the end of time … But it’s going to be there along the line and it’s generating all the cash for us.”

On the potential for SES to explore major M&A, having reportedly discussed a deal with U.S. group Intelsat, Collar said that his company is “not in a huge hurry.”

“We’re in great shape. We’ve basically got a new fleet, which is in and of itself interoperable. We’ve got a unique position in MEO, and the strongest balance sheet in the traditional industry,” Collar said.

“If something like this make sense for our shareholders … we’ll do it, but we don’t feel the compelling need in the same way as perhaps some of the other guys would have,” he said.

Source: https://www.cnbc.com/2022/09/13/ses-ceo-on-satellite-broadband-companys-difference-from-spacexs-starlink.html