EchoStar Teams with SES To Pursue Mexican Market

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WASHINGTON — Satellite fleet operators EchoStar Corp. and SES on March 19 announced that they would use an SES affiliate in Mexico to sell capacity on three satellites — a total of 48 Ku-band transponders — to the Mexican market following Mexican government approval.

For Englewood, Colo.-based EchoStar, the transaction has the appearance of a rejected suitor coming back to compete with its sought-after partner. EchoStar had bid to purchase Mexican satellite operator Satmex in a deal that was rejected by Satmex bondholders and terminated March 16 by EchoStar. EchoStar will now compete more directly with Satmex for business in Mexico.

For its new approach to the Mexican market, EchoStar will be using capacity on the SES-owned AMC-15 and AMC-16 satellites, located at 105 degrees west and 85 degrees west, respectively. EchoStar has leased the full capacity of these satellites for 10 years but up to now has had trouble filling them. Sistemas Satelitales de México (SSM), a Mexican subsidiary of Luxembourg-based SES, is the company to which the Mexican government granted the operating license, and EchoStar will be offering the satellite capacity through SSM.

In 2008, EchoStar wrote down the value of its AMC-15 satellite by $138 million and the value of its AMC-16 investment by $80 million. EchoStar said the satellites today are used by U.S. business customers and have “full coverage of Mexico and the United States.” In addition to these two satellites, EchoStar’s Mexican business through SSM will use capacity on the QuetzSat-1 satellite SES has scheduled for launch in 2011 into the 77 degrees west orbital slot. EchoStar’s principal customer and former owner, satellite-television provider Dish Network, will be using much of the QuetzSat capacity, as will the Dish-owned Dish Mexico satellite-television service, which has reported fast growth in the past year, its first year of operations.

EchoStar had already contracted with SES to use the QuetzSat capacity.

“EchoStar is well positioned to leverage its satellite operations and uplink expertise in the U.S. to expand its fixed satellite services throughout Mexico, including the delivery of satellite Internet services to rural communities,” EchoStar Satellite Services President Dean Olmstead said in a March 19 statement.