WASHINGTON — Eutelsat will replace a trio of satellites with two larger all-electric satellites from Airbus Defence and Space, company officials said Wednesday.
The new spacecraft will replace Paris-based Eutelsat’s most valuable set of broadcast satellites, known as Hotbird, through which the company delivers more than 1,000 television channels to viewers in Europe, the Middle East and Northern Africa.
Rodolphe Belmer, Eutelsat chief executive, said Aug. 1 that the all-electric duo will result in “significant savings relative to the original cost of the constellation,” which he said was 600 million euros ($700 million at current exchange rates) for construction, launch and insurance some 10 to 12 years ago. The company has tightened its three-year capital expenditure plan from 420 million euros per year to 400 million euros. Executives said the company’s “design to cost” strategy — applied to the new Airbus satellites — has been more fruitful than first expected.
The new satellites will launch in 2021 on unspecified vehicles, according to a Eutelsat earnings presentation. They would provide the same amount of Ku-band capacity as the current three satellites, along with improvement like better resistance to signal jamming.
Yohann Leroy, Eutelsat’s chief technical officer and a deputy CEO, said the two greatest cost savers on the new Hotbird satellites are electric propulsion and Airbus’ new Eurostar NEO platform.
Electric propulsion makes it possible to replace three existing satellites with only two, he said.
Electric propulsion systems are lighter and smaller than chemical propulsion, allowing operators to add more revenue-generating transponders on a single satellite. The tradeoff is orbit raising time. An all-electric satellite requires months to travel from a transfer orbit to a geostationary orbit, while a chemically propelled satellite can cover the same distance in days.
Leroy said Eutelsat is the first customer for Eurostar NEO, a platform Airbus developed with funding from the French and European space agencies. Eurostar NEO is “much more cost effective” than Airbus’ standard Eurostar-3000 platform, he said, though as a new program it does risk construction delays. Leroy said Eutelsat received a discount from Airbus for being the first customer, and will have its own engineering team working with Airbus to manage schedule risk.
Video broadcasts generated 897 million euros in annual revenue for Eutelsat, whose fiscal year ended June 30, counting for some 66 percent of revenues. Eutelsat generated a total of 1,408 million euros for the year, down 0.7 percent when removing the effects of currency fluctuations.
Konnect Africa business finally ready to rock
Belmer said the African broadband business Eutelsat has been trying to start since 2016 will officially launch this month using 10 Gbps of capacity on Emirati operator Yahsat’s Al Yah 3 satellite.
Eutelsat encountered roadblocks in its Africa business, first when Spaceom’s Amos-6 satellite it had leased capacity on exploded in a Falcon 9 pad failure, then again when capacity newly contracted on Al Yah 3 was held hostage by construction delays at Orbital ATK (now part of Northrop Grumman), and a third time when Al Yah 3’s Ariane 5 launch vehicle deposited the satellite in the wrong orbit this January.
Using capacity on the all-Ka-band Al Yah 3, Eutelsat will begin rolling out service across 19 Sub-Saharan countries through internet service providers, Belmer said. The company is also seeking partnerships with satellite television broadcasters interested in providing internet, and is eyeing distribution agreements with banks, drugstores and gas stations, he said.
Eutelsat’s Africa business will have another 75 Gbps of Ka-band capacity when the Konnect satellite from Thales Alenia Space launches next year, though the company may point some beams over Europe. Formerly called the African Broadband Satellite, Konnect will enter service in 2020, Belmer said. Eutelsat has indicated it may point some beams over Europe to get a head start over Californian fleet operator Viasat in delivering broadband services to the continent.
Konnect VHTS, a Ka-band satellite Thales Alenia Space is also building, will concentrate 500 Gbps of capacity over Europe after it launches in 2021 with a to-be-announced launch provider.
Sandrine Téran, Eutelsat’s chief financial officer, said the company already made initial payments on Konnect VHTS and the two HotBird replacements while keeping capital expenditures to 358 million euros for the year.
Merger activity
Last month Eutelsat said was mulling a bid to acquire British fleet operator Inmarsat, but halted that effort within 24 hours saying it had no intentions of making an offer.
Belmer said Eutelsat expects consolidation among satellite telecom operators because of an oversupply of capacity in some markets and “because of the difficulties of some of the players in this segment.”
As the world’s third-largest geostationary fleet operator with some 38 satellites, Belmer said Eutelsat is monitoring and evaluating merger and acquisition opportunities. “We look at everything,” he said.
Eutelsat said it is aiming for “slight” revenue growth next year after two years of decline. The company generated a net income of 302.1 million euros for its most recent fiscal year, a decrease of 61.3 million euros.
