Satellites: “Admit you have a problem”
C-band won’t help much
A negative report on the satellite industry from equity analysts at Deutsche Bank does not pull any punches in its 22-page report on the sector, saying bluntly “The first step is admitting you have a problem”.
Analyst Laurie Davison opens the bank’s report with a summary of the past month’s results season on the ‘Big Three’ players (SES, Intelsat and Eutelsat), saying; “Another set of results and yet another round of downgrades. SES misses on dividend, guides to heavy Video declines in 2018; ETL beats on results but only after consensus downgrades into numbers, Intelsat misses and guides down. Time to call the floor on valuation and earnings? Far from it. 4Q results deepens our concerns over Video decline following the belated acknowledgement from SES that western European Video is now seeing pricing decline.”
Focusing on SES and Eutelsat in particular, Davison adds that both operators are at the limits of investment grade and heavily exposed to higher interest and dividend cuts with higher rates. This is not the time to BUY either SES or Eutelsat.
Space “rescue tugs” get closer
The correct industry name for an orbiting “Space Tug” and its functionality is for In-Orbit Servicing (IoS) of existing satellites. They can also be called ‘Mission Extension Vehicles’, and quite a few technology companies are building suitable spacecraft capable of rescuing and servicing orbiting satellites.
With a typical geo-satellite costing around $250-400m to build, launch (and insure) it makes perfect sense to consider the huge potential savings available from using something that is already orbiting.
A new report from Northern Sky Research (NSR) says – in theory – IoS presents diverse opportunities, from extending satellite life and transporting it to the correct orbit in the near term, to repairs and potentially even for in-orbit assembly in the longer term.
Sat-operators facing “industry oversupply”
The world’s major satellite operators are facing continuing revenue problems because of an oversupply of orbital capacity, says a report from Northern Sky Research (NSR). The researchers add that the decline is far from over and could extend into 2019.
NSR says that capacity leasing prices have fallen, on average, for the third year in a row. “On average, capacity price declines for the period 2016-2018 ranged from 32-57% across various applications & regions, and the road ahead appears unclear as greater supply enters the scene, demand lags in some markets and competition intensifies,” stated NSR.