Intelsat Outbids Eutelsat for Protostar-1
KOUROU, French Guiana —has won an auction for the ProtoStar-1 telecommunications satellite with a $210 million all-cash bid that barely exceeded what competitor was willing to pay. The Oct. 29 auction also featured bids from , EchoStar, Thaicom and Measat and demonstrated the continued strength of the satellite telecommunications market, industry officials said.
Several officials involved in the auction said they were surprised by the strength of the bids. Several said they had thought the winner would need to go perhaps to $150 million, but no higher, and that the highest bids might feature a mixed payment of cash and a sharing of future ProtoStar-1 revenue.
One of the bidders that stopped well short of the Intelsat and Eutelsat offers said paying that much for ProtoStar-1, which is healthy and in orbit, was “not just amazing – it’s crazy.”
That is not how Bermuda- and Washington-based Intelsat sees it. Intelsat spokesman Dianne J. VanBeber said Oct. 30 that Intelsat carefully reviewed the capacity of ProtoStar-1 and concluded that, for Intelsat, it is nearly equivalent to purchasing a new satellite.
Intelsat expects to make its payment to ProtoStar, which is in Chapter 11 bankruptcy proceedings, in the coming days. VanBeber said Intelsat is likely to move ProtoStar to a vacant Intelsat slot over the Atlantic Ocean region — with one option being the 328.5 degrees east longitude location — and to use it to bolster its coverage of Africa.
“Our fleet has a fill rate of more than 80 percent and if you look at our current planned capex [capital spending plan] we are expanding our fleet by only about 35 transponders by 2014,” VanBeber said. “Most of the satellites we are building now are for replacement. ProtoStar-1 is almost new and the cost of building and launching a large telecommunications satellite these days is $225 million-$250 million. We think the satellite will help us grow our business in Africa.”
ProtoStar-1 was launched in July 2008. One industry official said an estimate made in July of this year showed the satellite had 15 years of full service remaining. ProtoStar-1 is a-built 1300 platform with 22 Ku-band transponders and 38 C-band transponders.
Bermuda- and San Francisco-based ProtoStar Ltd. filed for Chapter 11 bankruptcy protection earlier this year, succumbing to multiple frequency-coordination issues both for ProtoStar-1, located at 98.5 degrees east, and for ProtoStar-2, which was launched in May into the 107.7 degrees east slot.
An auction for ProtoStar-2 is now scheduled for December, and industry officials are speculating over whether the ProtoStar-1 auction results — far better for ProtoStar’s debt-holders than most observers had expected — are an indication of how the ProtoStar-2 sale will go.