The SES Global-New Skies and Intelsat-PanAmSat mergers reshape the industry landscape. When its merger with PanAmSat is finalized in a couple of weeks, Intelsat will become the world’s largest operator of Fixed Satellite Services and Japan’s JSAT will join the top 5. Below is a list of the top 5 companies in this post-merger world, and a summary of the major issues each faces.

Intelsat’s purchase of PanAmSat in the coming weeks will create the world’s largest commercial satellite-fleet operator by revenue . The combined company will have 52 satellites in orbit, and in 2005 would have had revenues of $2 billion.

The regulatory review of the merger was never viewed as much of an issue. But questions have been raised about whether the new combined company will be able to offer investors much of a dividend once it conducts an expected initial public offering of stock in the United States.

Estimates indicate Intelsat’s post-PanAmSat debt will be seven times the combined company’s EBITDA, or earnings before interest, taxes, depreciation and amortization.

The massive fleet, with commercial operations in 200 nations and territories, likely will be rationalized in regions where PanAmSat and Intelsat have overlapping coverage. This will permit Intelsat to seek new markets with freed-up satellite capacity without having to incur new capital expenditure.

Nonetheless, it is fair to ask whether the new behemoth, once subject to the demands of the public equity markets, will be able to pay down its debt, offer an attractive dividend and invest in the business.

Intelsat Chief Executive Dave McGlade says the cash generated by the business is sufficient to handle all these tasks, especially since the combined Intelsat-PanAmSat fleets are relatively young.

SES Global Chairman Romain Bausch says it doesn’t bother him a bit that his company, even after the $1.1 billion purchase of New Skies, will be bumped from first to second place in the rankings of global satellite operators by the new Intelsat-PanAmSat merger.

In fact, while SES Global’s fleet of 35 satellites, counting the New Skies assets , is substantially smaller than that of the new Intelsat, the revenue distinction is not as sharp, especially once the annual gyrations of the U.S. dollar are spread over several years.

Of greater concern to SES in recent months has been what appears to be a dialogue of the deaf with the stock market over SES’s move into satellite services.

Despite the Luxembourg-based company’s commitment to generating annual revenue increases of 10 percent in 2006 and 2007, SES’s stock on the Paris-based Euronext exchange has suffered declines independent of broader market downdrafts in recent months.

SES Global says entering into the services sector gives the company ownership of businesses that will drive traffic to SES’s fleet that might otherwise have gone to competitors. SES also thinks it can boost the profitability of the satellite-services companies it purchases, but it concedes that this line of work will never generate the EBITDA margins of the satellite-fleet operating business.

Blending the two types of businesses into a single financial picture depresses SES’s historically high EBITDA and worries investors.

Bausch says it’s all a problem of communication, and that once the market understands what SES is doing, the stock will rebound. In any event, he says, SES has no intention of changing its strategy.

All of a sudden, Eutelsat looks small. What used to be a quartet at the top of the satellite operations business — SES Global, Intelsat, PanAmSat and Eutelsat — is now a duo, with Paris-based Eutelsat relegated to second-tier rank.

Does it matter? Eutelsat Chief Executive Giuliano Berretta — who helped whip up French government opposition to Intelsat’s proposed purchase of Eutelsat in 2003 — says size is not an issue.

Consolidation for its own sake, Berretta says, is a game for investment bankers and not necessarily one in which customers and shareholders win.

With its core European television audience seemingly untouchable and modest growth in the near term, Eutelsat would not appear to be desperate for a partner. Eutelsat’s attempts to take a majority stake in Hispasat of Spain have been rebuffed by the Spanish government, suggesting that Eutelsat is not alone in thinking that bigger is not always better.

Telesat is one of the few high-growth stories among satellite operators and its financial results made it perhaps inevitable that its parent company, BCE Inc., would want to monetize its investment.

Sometime this year, BCE will recapitalize Telesat, loading the company with an undetermined amount of new debt ahead of a planned stock-market introduction in which BCE will sell a minority stake in Telesat.

The availability of a big chunk of Telesat — as a common carrier it must remain majority Canadian-owned by law — has attracted the interest of several private equity companies and at least initial interest from other satellite-fleet operators.

But BCE Chief Executive Michael J. Sabia said in May that a stock offering remains the most likely scenario, without closing any doors.

“[T]he approach of taking this company public does offer us the most significant value-creation potential,” Sabia told investors in May. “That being said, we are aware that there has been some interest that surfaced among some strategic and financial investors. But nonetheless, we continue to be of the view that the public process is the value-maximizing approach to moving forward with Telesat. And we’re on track … to take that company to the public markets in the fall.”

Telesat Chief Financial Officer Ted Ignacy said these maneuvers should not upset Telesat’s expansion plans, including a possible all-Ka-band satellite to add capacity for the consumer-broadband service now served by the Anik F2 satellite.

JSAT Chief Executive Kiyoshi Isozaki is bracing investors for a possible dip in revenues this year but says the company’s underlying business, and especially its Horizons U.S. venture with PanAmSat, is robust.

JSAT has suffered from the expiration of certain NTT Group contracts and in 2005 also was obliged to pay some $28 million in compensation to customers following an in-orbit anomaly on the JCSAT-1B satellite. The loss of control of the satellite forced JSAT customers to move their antennas to other JSAT satellites, and JSAT compensated them for this.

On the positive side of the ledger, JSAT says its Horizons-1 satellite, a Boeing 601 model launched in September 2003 into the 127 degrees west orbital slot, has proved even more popular than predicted. JSAT says sales of Horizons-1 have made the business profitable less than two years after it went into operation.

Owned jointly with PanAmSat, the Horizons business will be increased in mid-2007 with the launch of a smaller, Orbital Sciences-built Horizons-2 satellite. Horizons-2 will be placed at the 74 degrees west orbital location, with JSAT incurring most of the initial capital expenditure.

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