SES closer to $4 billion payout after ULA launch to near-geostationary orbit
TAMPA, Fla. — United Launch Alliance launched a pair of satellites for SES Oct. 4 that are vital to the operator’s bid to claim nearly $4 billion in C-band clearing proceeds.
SES-20 and SES-21 lifted off 5:36 p.m. Eastern from Cape Canaveral Space Force Station, Florida, and separated from their Atlas 5 rocket around six hours later.
The lengthy mission dropped the Boeing-built satellites off at 35,888 kilometers above the equator at 1.9 degrees of inclination, much closer than a typical launch of spacecraft to geostationary transfer orbit.
The companies said this will cut several months off the time it will take these satellites to reach their final orbit destinations using onboard electric propulsion.
“We didn’t want to wait longer than we absolutely had to to get our hands on the satellites,” SES CEO Steve Collar said in a call with journalists, and SES-20 and SES-21 will “be operational in November, which given that we’re sitting here in October is pretty impressive.”
Having already launched SES-22 in June as part of its shift out of C-band, the Oct. 4 mission leaves SES with just two more satellites it plans to deploy by early next year to stay on pace to claim the maximum payout from the Federal Communications Commission.
SES is paying for these satellites with proceeds from the FCC’s C-band auction last year, which fetched more than $80 billion from Verizon, AT&T, T-Mobile, and other U.S. wireless carriers who need more spectrum for 5G.
In addition to covering costs to vacate C-band for terrestrial 5G, the FCC is offering satellite operators nearly $10 billion in total incentive payments if they can meet the regulator’s spectrum-clearing deadlines.
SES and Intelsat hold the majority of C-band in the United States and are in line for a maximum of $3.97 billion and $4.9 billion, respectively, if they can fully vacate the lower 300 MHz slice of C-band by Dec. 5, 2023, by moving broadcast customers to the upper 200 MHz of the band.
They unlocked more than $2 billion in combined proceeds from the FCC last year after meeting the regulator’s first major C-band clearing deadline, however, hitting the regulator’s final deadline will require new satellites in orbit.
SES loses C-band battle against Intelsat
SES lost its bid Sept. 30 to convince a court overseeing Intelsat’s recent bankruptcy that it was owed $1.8 billion over a broken agreement to equally share C-band clearing proceeds.
SES brought the claim to the U.S. Bankruptcy Court for the Eastern District of Virginia two months after Intelsat filed for Chapter 11 in May 2020, and was one of its largest creditors.
The operator made the claim to cover damages resulting from Intelsat’s departure from a pact to equally share the compensation they would get from the FCC.
Intelsat argued the agreement was nullified once the FCC decided to reallocate satellite C-band spectrum to 5G cellular network carriers via a public auction, rather than a private process run by the satellite operators.
After more than two years of legal action, the court decided Sept. 30 to sustain Intelsat’s objection and disallow the claims from SES.
In a Memorandum Opinion, Judge Keith Phillips wrote that SES could have objected to the FCC’s draft order if it thought its split was unfair.
The satellite operator could have also “refused to participate in the accelerated clearing; it did neither,” he added.
“In short, the Court does not see anything ‘unjust’ about allowing the split of accelerated relocation payments set by the FCC based on objective criteria to determine the amounts available to SES and Intelsat.”
SES spokesperson Suzanne One said it is “disappointed with the ruling,” and “is reviewing with outside counsel its options to appeal.”
Intelsat, which emerged from bankruptcy in February and is looking to use C-band proceeds to pay off more debt and fuel its return to growth, “is pleased to have resolved this matter with a ruling in our favor based on the clear and convincing evidence presented,” Intelsat spokesperson Clay McConnell said.
The court’s decision likely lessens the need to rush any merger talks between the two satellite operators.
The Financial Times reported Aug. 4. that SES and Intelsat were in active talks about combining their companies amid consolidation deals elsewhere in the industry.
While SES and Intelsat have not explicitly commented on the rumor, they have each touted the benefits of satellite operator consolidation to help rationalize the industry.
“If the opportunity of consolidation is there, and it makes sense for our shareholders, we’ll grab it and execute hard,” Collar in a Sept. 14 SpaceNews interview during World Satellite Business Week in Paris.
“If not, we’ve got a fantastic plan … using the cash flows that we’re generating from video to invest meaningfully in” SES’ data-focused networks business.
More replacement satellites needed
SES and Intelsat have ordered 13 C-band replacement satellites between them to clear the spectrum for mobile operators.
SpaceX is slated to launch two more for SES on Falcon 9 rocket toward the end of the year.
Collar said in the media call that “we may end up pushing into early next year depending on the manifest,” but the satellites are essentially “more or less ready to go.”
The operator’s remaining work to vacate C-band following this launch will be on the ground as the operator moves customers and filters antennas across the United States.
SES ordered six C-band replacement satellites in total, and the sixth will be used as a ground spare.
Intelsat has ordered seven satellites for its C-band clearing plan, with none of them intended as ground spares, and has lined up Arianespace and SpaceX for launches starting Oct. 6.
SpaceX is slated to launch Galaxy 33 and Galaxy 34 on a Falcon 9 from Cape Canaveral, Florida, at 7:07 p.m. Eastern.