Telesat, Hispasat and YahSat Prevail in Brazilian Slot Auction

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ABU DHABI, United Arab Emirates – Telesat of Canada, Hispasat of Spain and YahSat of the United Arab Emirates on May 26 were the high bidders at a Brazil auction of satellite orbital slots and associated frequencies, winning four licenses at three orbital slots, according to Brazil’s telecommunications regulator, Anatel.

The auction was Brazil’s second in 12 months. In 2014, Hispasat, SES of Luxembourg and Paris-based Eutelsat won slots in different frequency bands.

Ottawa-based Telesat, which lost out a year ago, this year won two licenses, both at 63 degrees west. One is for Ka-band services and the other for what is called Appendix 30B services, referring to a section of the satellite frequency regulations that applies to a variety of fixed satellite services.

YahSat, which also came up empty in last year’s auction, won Ka-band rights to a Brazilian slot at 20 degrees west longitude to serve Africa and Latin America. YahSat already has its Al Yah 3 satellite under construction for this business.

Hispasat’s Hispamar affiliate won rights for Ka-band transmissions from 74 degrees west longitude in Ku-band. Hispasat outbid Eutelsat in this year’s auction.

As was the case last year, Brazil’s domestic satellite operator, Star One, was not awarded an orbital slot. Brazil has prided itself on an open-skies policy that gives wide leeway to foreign companies to compete with Star One.

Anatel said the auction resulted in a cash harvest of 183.7 million Brazilian reals, or $63.6 million, which was nearly 70 percent more than the minimum bidding floor set for each slot.

Telesat is paying about 90 million reals for its two licenses. YahSat, which bid through its Star Satellite Communications Co. subsidiary, paid 44.1 million reals. Hispasat’s Hispamar paid 50.3 million reals for its slot.

The licenses are for 15 years, renewable for a second 15-year period.

Each company will now have about four years to show progress on building the satellite intended for its newly acquired orbital position, with the risk of forfeiting the auction payment if it decides not to proceed.

Depending on what satellite businesses are proposed – high-capacity or not, or perhaps nothing more than a payload hosted on another satellite, and where the satellite beams are pointing – the auction will only accelerate concerns that Latin America may be approaching an oversupply situation.

“The result of the bid shows that investors believe in the potential of the telecommunications market in Brazil,” Anatel President John Rao said in a statement on the auction results.