PARIS—Satellite fleet operator SES on April 29 said it had taken a controlling interest in medium-Earth-orbit broadband constellation O3b Networks, upping its stake to 50.5% from 49.1 percent, for $20 million.

The company said O3b shareholders had agreed to a scenario in which Luxembourg-based SES would purchase the remaining 49.5 percent of O3b for $710 million by October 2017 unless SES decides to do so beforehand or the shareholders agree to an O3b IPO.

SES Chief Executive Karim Michel Sabbagh said consolidating O3b into SES’s financial accounts, which had been expected, was “a game-changer” for SES’s positioning in growth markets including military, maritime, oil and gas, energy and cellular backhaul services. Sabbagh said an O3b role in aeronautical connectivity – recently demonstrated with a U.S. government aircraft using O3b and ViaSat Inc. gear – is likely to come.

Based in Britain’s Channel Islands, O3b operates a fleet of 12 satellites in an equatorial orbit 8,000 kilometers in altitude. The network’s core markets are between 45 degrees north and 45 degrees south of the equator, with limited applications feasible as far as 62 degrees from the equator.

Addressing a conference call with investors, Sabbagh said O3b, which has eight more satellites on order and scheduled to launch by late 2019, eventually would extend its reach to the polar regions by launching satellites in high-inclination orbits.

SES told investors that O3b is expected to report around $100 million in revenue in 2016, double that of 2015, and likely would surpass $500 million in annual revenue by 2021 with a 20-satellite fleet. O3b’s current backlog of firm orders is $350 million.

The $20 million investment taking SES over the 50 percent level in O3b brings SES’s total investment to $323 million. Both the transaction and the $710 million price agreed to by the shareholders for the remaining 49.5 percent gives O3b a valuation of $1.43 billion.

SES officials originally viewed O3b as a mixed blessing, fearing it could cannibalize some of SES’s heritage point-to-point and trunking business.

But that was then. Sabbagh said that after two years’ growth at O3b, SES has concluded that the feared cannibalization “hasn’t materialized. We’re in a much better place.”

The transaction, which SES Chief Financial Officer Padraig McCarthy should close by late this year, is also proof that a core O3b argument – that the low latency offered by low-orbiting satellites has a distinct advantage over geostationary-orbit satellites in certain markets – has been accepted by SES.

SES estimates that up to 20 percent of the global data market for the government, mobility and enterprise markets are latency-sensitive.

Other big fixed satellite service operators have come to the same conclusion. Fleet operators Intelsat and Telesat, in more modest ways so far, are investing in low-orbiting constellations, even if neither has made a commitment on SES’s scale.

McCarthy said O3b’s last 12 satellites in the current constellation configuration – four already in orbit plus the eight on order – would cost $80 million apiece, including construction by Thales Alenia Space of France and Italy, and launch by Europe’s Arianespace consortium aboard Europeanized Russian Soyuz rockets. The figure includes the cost of insurance.

The O3b announcement overshadowed SES’s overall financial results for the three months ending March 31. Here are highlights.

— Revenue from mobility applications, mainly aeronautical, rose 60.5 percent to 22.3 million euros for the three months ending March 31. Mobile now accounts for 5 percent of SES’s total revenue, up from 3 percent a year ago.

SES has signed major capacity contracts with aeronautical connectivity providers Gogo, Panasonic Avionics and GEE for the future SES-12, SES-14 and SES-15 high-throughput satellites, all scheduled for launch in 2017. SES in March launched a maritime service, using Ka-band capacity, initially for the European market.

— The SES-9 satellite launched March for aboard a SpaceX Falcon 9 Full Thrust rocket is expected to enter service by the middle of this year, bringing an additional 53 Ku-band transponders to SES’s capacitiy over the Asia-Pacific.

— High-definition broadcasting now accounts for 32.5 percent of SES’s total channel count, compared to 30 percent a year ago, reaching 2,375 channels worldwide. Broadcasters’ moving from standard-definition to high-definition takes more satellite bandwidth and is crucial for satellite fleet operators to counter the advances in signal compression.

SES also broadcasts 23 ultra-high-definition channels, up from 19 as of Dec. 31.

SES grew its total television channel count by 8.6 percent, to 7,309 channels. Video revenue grew 5 percent in the three months ending March 31, and 3.2 percent at constant euro-U.S. dollar exchange rates, and accounts for 71 percent of total SES revenue.

Peter B. de Selding was the Paris bureau chief for SpaceNews.