The post-results analysts call with SES senior management focused on two topics: The possibility of another C-band release of spectrum to the FCC and the state of the Intelsat $3.1 billion (€2.9bn) acquisition by SES and what the consequences would be if one of the parties walked away from the deal.
The FCC is holding a meeting today (February 27th) to discuss its C-band plans.
It was C-band which dominated the Q&A. Analysts heard that the FCC wanted “all it could get” of C-band spectrum (3.98-4.2 GHz) and wanted it speedily. The 2020 FCC-backed auction of 2809 MHz generated billions in revenue for the FCC and the US Treasury, and delivered a multi-billion payout to SES (and Eutelsat, Telesat and Hispasat).
SES CEO Adel Al-Saleh implied that the 2020 transactions might not be a real benchmark as to what might transpire from a new auction, noting: “Today’s spectrum is much more valuable and has grown in the past two years,” he stressed, and added that with good planning and technical engineering it was possible to free up more than 100 MHz of C-band. He said that the freed-up spectrum would not damage SES or Intelsat’s day-to-day operations. It is a very valuable band for everybody — not just the mobile operators. You can see the direct-to-device folks would like to get their hands on it, and our customers think it’s really important,” Al-Saleh said. Hinting at possible use by Elon Musk’s Starlink, he added: “It’s really up to the FCC to decide how they want to allocate that spectrum, knowing that their main objective is to drive incremental revenue to the treasury to fund a lot of the initiatives that the Trump administration is driving.”
In January 2025, Space X’s VP/satellite policy, David Goldman, suggested in a letter to FCC Secretary Marlene Dortch that the C-band should be shared among other players after the SES-Intelsat merger.
Moreover, SES will have a bonus in that anything over 100 MHz freed up would result in revenue gains for SES. (The first 100 MHz of value goes to Intelsat’s existing owners/investors as part of the acquisition agreement). SES received €386 million in FCC reimbursement cash this past year and there was another (about) $90 million still to be received during Q1 2025.
As to the Intelsat acquisition, CFO Sandeep Jalan told analysts that there had been a “shortfall” in Intelsat’s 2024 revenues (and Intelsat is due to release its own financials in the next week or so) but that all the key metrics were still in place to support the deal and that projections for 2025 and beyond were still in place. Various obligatory and regulatory approvals were being received and a H2 2025 closing was still expected.
SES expects that the combined SES + Intelsat combination will free up €2.7 billion in synergies with 70 per cent of those savings in place within three years.
There were questions on the EU-backed IRIS2 multi-orbit highly-secure broadband satellite constellation scheme. Al-Saleh explained that SES would be spending €1.8 billion during 2027-2030 and that CapEx would run at about €400 million per year. SES had received €300 million in advance — and protected — payment from the European Commission for early development of the scheme. SES has an expectation of achieving at least a 10 per cent Internal Rate of Return on IRIS2.
SES enjoyed a share price jump of 6 per cent on February 26th, although there were negative comments from local Luxembourg union leaders anxious about potential job-losses at its Betzdorf HQ.
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