PARIS – European satellite broadband operator SES wants to differentiate its services from similar industry challengers in Starlink and SpaceX. Amazons Kuiper, as the company seeks to strengthen its market position.
In an interview with CNBC at the annual World Satellite Business Week conference, SES CEO Steve Collar said his company’s services, supported by satellites orbiting further above the Earth’s surface than new competitors, provide “premium” connectivity for more demanding businesses and government. using.
“We’re effectively delivering the satellite equivalent of dedicated fiber to a commercial building,” he said, as opposed to the “best-effort,” “hard service” that consumer homes receive.
Collar’s company operates broadband satellites in two different types of orbits: Geosynchronous (GEO) and Medium Earth Orbit (MEO), while SpaceX and Amazon’s networks are designed for Low Earth Orbit (LEO) and aim to increase both speed and coverage area in compared to traditional systems.
SpaceX is currently leading the way in building broadband LEO networks. Starlink has about 3,000 satellites in orbit and a total of about 500,000 customers, most of whom are individual consumers. Starlink also recently signed a deal with Royal Caribbean Cruises will offer satellite internet on board.
However, SES has its own cruise line partnership, and Collar estimates that his company provides about half of Royal Caribbean’s current satellite service. Starlink, he said, “is not the same service we provide.”
“I mean what [Royal and Starlink] they want to create a kind of thin layer of connectivity that they can use for all ships, and then have other services on board the largest ships that need high throughput and guaranteed connectivity,” Collar said.
“I’m not sure that architecturally SpaceX can provide an uncontested service — I think their whole thing is really a best-effort service,” Collar added.
SES is adding enhanced satellites called mPOWER to its existing MEO satellite constellation. The first pair will be up and running by the end of this year and will begin operations next year, Collar said.
The company wants to continue to build out its MEO network, aiming to have satellites orbit from pole to pole instead of just over the equatorial regions.
SES reported H1 results last month with revenues of €899 million, up 3% year-on-year, and adjusted EBITDA of €545 million, flat year-on-year.
Collar noted the decline in SES’s core satellite video business, but said that was to be expected.
Satellite communications – the space industry’s largest market – is undergoing a shift from video broadcasting to data services, highlighted by a flurry of consolidation in the sector. Two major mergers underway, European GEO operator Eutelsat merged with UK LEO challenger OneWeb and US GEO operator Viasat purchase of British GEO operator Inmarsat.
Collar said video “will continue to decline in the low single digits from now until the end of time… But it will be there along the line generating all the cash for us.”
On SES’s potential to explore major mergers and acquisitions reportedly negotiated a deal with the US Intelsat groupCollar said his company is “not in a huge rush.”
“We’re in great shape. We basically have a new fleet that’s inherently interoperable. We have a unique position in MEO and the strongest balance sheet in the legacy industry,” Collar said.
“If something like that makes sense to our shareholders … we’ll do it, but we don’t feel a compelling need in the same way that some others might,” he said.