Intelsat has launched the first of six next-generation HTS EpicNG satellites, as part of a project that it believes represents a US$3bn incremental revenue opportunity by 2020.
Intelsat (NYSE:I) has launched the first of six next-generation HTS EpicNG satellites, as part of a project that it believes represents a US$3bn incremental revenue opportunity by 2020.
An Ariane 5 lofted Intelsat 29e from French Guiana on 27 January and is making its way to 310E, where it will cover the Americas and North Atlantic region when it becomes operational in the middle of the year.
The new bird will replace Intelsat 1R and has significantly more C- and Ku-band capacity, enabling the FSS operator to pursue customers demanding satellite connectivity for applications such as IOT, enterprise, wireless infrastructure, aeronautical and maritime mobility, and government services.
When the Epic programme was announced in 2012, Harris CapRock, Panasonic and EMC were named as anchor tenants, signing on to pay a combined US$500m for 10 years of Ku-band capacity.
Alongside these three companies, Intelsat has said Axesat and telecom operators in Latin America will be among the first to deploy services on the new satellite.
Intelsat has declined to disclose the expected fill rate but, speaking on the company’s Q3 2015 results call, then CFO Mike McDonnell said that uptake was “going well … in line with our expectations”, and that it was starting to get very good momentum in closing capacity deals ahead of the launch date.
Boeing built Intelsat 29e and is working on the second EpicNG satellite, Intelsat 33e, which is set to be launched by Arianespace in the second half of the year.
The operator envisages it becoming operational in early 2017, when it will cover Africa, Europe and Asia, meaning EpicNG will reach all populated continents.
Intelsat has ordered another four EpicNG satellites, according to Boeing, which will provide further capacity in the future.
Raymond James analyst Chris Quilty commented: “For Intelsat, the Epic programme represents an ambitious betthe- farm gamble on the company’s ability to penetrate new markets and ride the growth wave in the maritime/aviation markets.”
In a note to investors, Quilty said that EpicNG would face competition from Inmarsat’s recently launched Global Xpress constellation, and ViaSat’s proposed 3 Tbps network, but concluded that Intelsat could still be prosperous.
“While the competitive environment has evolved more rapidly than we could have imagined four years ago, we nonetheless believe Intelsat’s Epic programme will prove successful and generate sufficient revenue to help reverse the company’s painful streak of revenue declines (nine consecutive quarters),” he said.
SatelliteFinance understands that Intelsat hired Goldman Sachs last year to examine market appetite for some of its assets, as it looked to whittle down its US$15bn debt pile, but without jeopardising its position as a top four operator. Since listing in April 2013, Intelsat’s share price has gradually fallen from US$53.60 to around the US$3 mark at the start of February.
