Eutelsat, SES - comment

Good news for satellite operators. According to a Reuters article now approved by the FCC, the latter has set a $6.3bn incentive pool to clear the long-discussed 160 megahertz of upper C-band spectrum for 5G mobile services. The total is approx. $1bn more than the market expected. Proceeds will take time to flow (2029?), but the math breaks down as follows: SES receives 89% or $5.6m, of which 42.5% would go to the CVRs issued to the former Intelsat shareholders. SES puts its own costs for the transition at $3.6bn, including “new, specifically designed Ku-band satellites with C-band uplink capabilities to support services currently provided solely using the C-band” for $2.6bn, and Terrestrial Recovery Network and IRDs will cost about $777 million. The list goes on from there, but since this is communication towards the government, we expect it is a generous calculation. Meanwhile, Eutelsat can expect to receive $504m.