Top Fixed Satellite Service Operators: Intelsat
Luxembourg- and Washington-basedreported a 3 percent increase in revenue for the three months ending March 31 and reaffirmed that spending on fleet replenishment and expansion likely will peak this year and then fall sharply in the two coming years.
Intelsat has launched two new satellites since late 2010 and has another seven on order. Capital spending on the new spacecraft is expected to be between $725 million and $800 million in 2011 before falling to between $575 million and $600 million in 2012, and then to $175 million and $250 million in 2013.
Launch delays may result in some expected charges being transferred from 2011 to 2012, but the trend is clear: After the current satellites are safely in orbit, Intelsat will divert more of its cash flow to debt repayment.
Intelsat has shown itself capable of building new satellites without incurring the full up-front charge, notably in its joint venture with Convergence Partners in South Africa for the Intelsat New Dawn satellite, and with the IS-22 satellite being built with a UHF-band payload financed by the Australian Defence Force.
If the company can continue to create such opportunities, the planned sharp reduction in capital expenditure may not translate into a one-to-one reduction in Intelsat’s fleet size. Intelsat has been among the most active satellite fleet operators in promoting the idea of hosted payloads, especially payloads owned by the U.S. government.
In Intelsat’s view, every one of its satellites should carry at least one such payload.
Intelsat in the past has said that in the coming years it may trim the size of its fleet to around 45 satellites. With an average service life of 15 years per satellite, that would imply launching three satellites per year at a total cost of around $600 million.