The satellite communications industry witnessed a monumental shift today as Luxembourg-based SES announced the acquisition of its US counterpart, Intelsat. This strategic move consolidates the market landscape, creating a dominant player with a combined fleet exceeding 126 satellites.
The combined entity boasts an impressive portfolio of over 100 geostationary Earth orbit (GEO) satellites and 26 medium Earth orbit (MEO) satellites, with an additional 15 launches scheduled by 2026. This vast network will operate and hold spectrum rights across various frequencies, including C-, Ku-, Ka-, Military Ka-, X-band, and Ultra High Frequency.
SES will pay $3.1 billion to acquire all of Intelsat’s equity in an all-cash transaction. The acquisition is funded using existing cash resources of about $2.6 billion and new debt, supported by a committed bridge facility. Additionally, SES will issue contingent value rights for any potential future monetization of the combined collective usage rights for up to 100 MHz of C-band spectrum.
Commenting on the merger, SES CEO Adel Al-Saleh said it would bring the companies together to create a player with a stronger multi-orbit position in the market to deliver better offerings in high-value markets like government and mobility. “This is a highly dynamic market. There’s new competition. This market is moving very fast, new LEO [Low-Earth Orbit] entrants are launching constellations. Having scale and a multi-orbit capability is critical to success. Being isolated or cornered into one part of the market without having the breadth and capability to compete is a difficult way to compete in this market,” Al-Saleh said.
This acquisition marks the latest chapter in a wave of consolidation sweeping the satellite industry. Recent examples include Eutelsat’s acquisition of Low Earth Orbit (LEO) operator OneWeb in 2023 and the merger of Viasat and Inmarsat, which closed in the same year. This trend reflects the industry’s strategic shift towards optimizing investments in both GEO and MEO satellite constellations while maximizing operational efficiency.
While the rise of Low Earth Orbit connectivity has attracted numerous players, recent discussions with industry leaders suggest a potential saturation point in the market. This scenario further underscores the likelihood of continued mergers, acquisitions, and market consolidation within the satellite industry.
Partnerships between satellite operators and traditional telecom service providers are also becoming increasingly common, driven by the recognition of complementary capabilities. In December 2023, we announced that MTN, via its partnerships with Eutelsat and Starlink, is joining the increasing trend of collaborations between terrestrial and satellite providers, and expect to see more, as they contribute to enhanced connectivity and narrowing the global digital divide in the years ahead.
