SES, Yahsat to Create Joint Venture Company

by

PARIS — Satellite fleet operator SES of Luxembourg and start-up operator Yahsat of Abu Dhabi will create a joint-venture company that will own 23 Ku-band transponders on the Yahsat 1A satellite to be launched in late 2010. The capacity will be leased to regional television broadcasters, the two companies announced April 20. SES is investing $50 million in cash in the new venture.

Under the agreement, which clarifies the competitive landscape in the still-hot Middle East satellite television market, SES will have 35 percent of the equity in the new company, called YahLive, but will have management control of the venture and will consolidate its earnings into SES’ financial accounts, according to the companies and a financial analyst following the deal.

In addition to its $50 million cash investment, SES has agreed to settle the outstanding broadcast frequency coordination issues with Yahsat relating to existing SES Ku-band frequency reservations with international regulators for 51 degrees east longitude. Yahsat 1A will be located at 52.5 degrees east, just 1.5 degrees away, which would have made it difficult for Yahsat to make maximum use of its Ku-band capacity if SES had developed the 51 degree slot.

Yahsat spokeswoman Jehan Eltigi said settling the frequency coordination issue was part of the overall accord that helped create YahLive. She said Yahsat and SES have agreed that the proposed Ku-band coverage for Yahsat 1A is as it should be and will not be changed to reflect the creation of the joint venture.

SES Astra spokesman Markus Payer said the agreement gives SES “significant new capacity in a region where we see dynamic growth.”

It is also a region in which Eutelsat of Paris, Arabsat of Riyadh, Saudi Arabia, and Nilesat of Egypt, among others, have announced new satellite capacity.

The SES-Yahsat partnership settles the long-open question of how Yahsat, which has a second satellite, Yahsat 1B, also under construction, would position itself as the new entrant in the market. Yahsat 1B is mainly a Ka-band satellite for regional government and military users and is not part of the YahLive venture, Eltigi and Payer said.

YahLive will be headquartered in Abu Dhabi. Officials from the two parent companies said April 20 that they are still evaluating options for providing backup capacity for Yahsat 1A.