Eutelsat, Hispasat and SES Affiliates Pick up Brazilian Orbital Slots at Auction

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Some industry officials have started to question whether too much capacity is being directed to Brazil given the foreseeable future demand once the excitement from this summer’s World Cup soccer tournament and the 2016 Summer Olympics, both to be held in Brazil, passes. Above is Rio de Janeiro's Maracana Stadium. Credit: Image courtesy of Brazil's government
Some industry officials have started to question whether too much capacity is being directed to Brazil given the foreseeable future demand once the excitement from this summer’s World Cup soccer tournament and the 2016 Summer Olympics, both to be held in Brazil, passes. Above is Rio de Janeiro’s Maracana Stadium. Credit: Image courtesy of Brazil’s government

PARIS — A Brazilian government auction of four satellite slots has garnered $67.6 million in winning bids from satellite operators in Spain, Luxembourg and France, Brazil’s Anatel telecommunications regulator announced May 7.

The bidding, which concluded May 6, elicited interest from seven satellite fleet operators, including participants from Britain, Canada, Brazil and the United Arab Emirates.

Hispamar, an arm of Hispasat of Spain, was high bidder for one of the Ku-band slots, with a bid of 65 million Brazilian reals ($28.6 million), which Anatel said exceeded the minimum bid set for the slot by 432 percent.

SES DTH do Brasil LTDA, affiliated with SES of Luxembourg, was high bidder for two slots. The company submitted a bid of 33 million reals — 170 percent over the minimum — for a slot offering C-, Ku- and Ka-band frequencies and rights to a broadband service. SES bid 26.8 million reals for a second slot, 119 percent over the bid floor, which offers Ku-band only, Anatel said.

Paris-based Eutelsat’s Eutelsat Brasil LTDA bid 28.35 million reals, 132 percent over the bid minimum, for a slot that Anatel said will use frequencies Brazil plans to use from authorizations under Appendix 30B of the International Telecommunication Union. This category covers a broad range of fixed satellite services.

The auction process promised winners 15 years of rights to the slots, with a 15-year renewal period.

In addition to the winning bids, four companies came away empty-handed from the auction. Star One SA, Brazil’s domestic satellite operator, was one of them.

Telesat Satellite Capacity Brasil LTDA, affiliated with Telesat of Canada; Inmarsat Navigation Ventures Ltd., associated with mobile satellite services operator Inmarsat of London; and Star Satellite Communications Co. of the United Arab Emirates, part of the Al Yah Satellite Communications Co., Yahsat, also submitted losing bids for one or more of the slots.

Brazil has been one of the hottest satellite bandwidth markets in recent years. But some industry officials have started to question whether too much capacity is being directed there given the foreseeable future demand once the excitement from this summer’s World Cup soccer tournament and the 2016 Summer Olympics, both to be held in Brazil, passes.

The bidding offered industry observers an opportunity to make an early assessment of SES’s strategy under the company’s new chief executive, Karim Michel Sabbagh, who replaced retiring Romain Bausch in March.

Sabbagh was selected by SES in part because of his knowledge of emerging markets, where SES and other satellite operators believe most of their growth will be in the coming years. Coming away with two slots from the auction, including a Ka-band broadband option, suggests that Sabbagh remains a believer in the long-term potential of the Latin American market.