TAMPA, Fla. — SES is preparing to drastically expand its medium Earth orbit (MEO) network after closing its acquisition of United States-based rival Intelsat July 17, building on a deal that forged an unmatched geostationary satellite fleet.
Their combination gives Luxembourg-based SES a fleet of around 90 satellites in geostationary orbit (GEO), with six more on the way. That’s about a third more than competitors Eutelsat, Viasat and Telesat combined.
Although GEO businesses have been declining amid the rise of non-geostationary constellations, SES CEO Adel Al-Saleh told SpaceNews he expects the market will stabilize over the next few years as demand consolidates around video distribution, government communications and guaranteed broadband coverage.
Meanwhile, he said a major growth opportunity lies in MEO, where SES already operates nearly 30 satellites and plans to deploy another pair next week for its next-generation O3b mPower constellation.
There are currently eight O3b mPower satellites in orbit under a Boeing contract for 13 in total. Each is designed to deliver multiple gigabits per second, or roughly 10 times the throughput of the operator’s first-generation fleet of 20 O3b satellites.
But with the Intelsat deal now closed, bringing in a company that had been exploring its own MEO network, SES is preparing to shift from launching one next-generation constellation at a time to building a continuously expanding fleet.
“We’re going to scale that network significantly,” Al-Saleh said in an interview, “think about MEO in the hundreds” of satellites.
The combined group has the financial resources to invest more aggressively, he said, with plans to spend close to $700 million annually on capital expenditures over the next three years, excluding commitments to Europe’s IRIS² sovereign broadband constellation.
“It doesn’t happen all in one day,” he continued. “It happens gradually and systematically every year,” adding that more details about its continuous build plans for MEO will be shared in the coming months.
SES also has access to low Earth orbit (LEO) broadband through its partnership with Eutelsat’s OneWeb network. Both SES and Intelsat had also previously invested in Lynk Global, and through their combination now hold the largest strategic stake in the direct-to-device LEO venture.
According to Al-Saleh, this multi-orbit reach positions SES to better challenge Starlink and other LEO broadband constellations on the way.
“This is not going to be legacy Intelsat, legacy SES, let’s bring them together,” Al-Saleh said.
“The leadership team is committed to drive a new company … that does things differently,” he said, focusing on operating with a new level of speed and innovation to keep up with the rapidly evolving market.
New culture, new markets
The increasingly competitive landscape, driven by Starlink’s rapid growth and Amazon’s looming Project Kuiper constellation that recently deployed its third batch of operational LEO satellites, has made scale and agility more critical than ever.
The increasingly competitive landscape is driven by Starlink and Amazon’s Project Kuiper, which recently launched its third batch of operational LEO satellites. This has made scale and agility more critical than ever.
“Just standing still for us was no option,” Al-Saleh said, “we had to do something, and the something is to create more scale ourselves, to be able to invest without having to go into deep debt and be able to bring new capabilities to the market continuously.”
SES is also beginning to broaden its focus beyond secure communications and video distribution, positioning itself for growth in emerging areas such as direct-to-device connectivity, hosted payloads and real-time data relay services.
Its stake in Lynk offers a path into a fledgling market where players like Starlink and AST SpaceMobile are also racing to connect standard smartphones beyond the reach of terrestrial networks.
According to Al-Saleh, Lynk’s capabilities could also support SES’ expansion into Internet of Things (IoT) and sensor-driven applications.
Another area of opportunity is hosted payloads, he said, where governments, weather services and space situational awareness providers are increasingly looking to place sensors and instruments aboard commercial satellites to reduce costs and deployment times.
“That is a whole new area for us that’s emerging,” he said, “and as we build this massive MEO network, we’ve got plenty of real estate on our satellites to start adding these hosted payloads.”
Equipped with inter-satellite links, SES’ expanding multi-orbit network also opens up new possibilities for real-time data relay, such as transmitting Earth observation imagery more quickly and securely. Rather than waiting for a LEO satellite to pass over a ground station, data could be routed through MEO and other orbits to be delivered where and when the customer needs it.
“We want to be a space company,” he added, “and this integration … opens up an aperture much broader than what we had before.”
Financial synergies
SES announced plans to buy Intelsat in April 2024 for $3.1 billion in cash, along with contingent payments tied to the potential monetization of Intelsat’s C-band spectrum. The deal recently completed a lengthy regulatory review process that culminated in U.S. Federal Communications Commission approval last week.
In total, the Luxembourg operator estimated it will cost 3.5 billion euros ($4.07 billion) to acquire the company.
SES projects 2.4 billion euros in total long-term savings from the merger, with 70% of those expected to be realized within three years.
According to the operator, most efficiencies will come from streamlined operations, optimized capacity use, procurement leverage and the strategic integration of satellite fleets and ground infrastructure, including rationalization in GEO.
SES says about 60% of the combined group’s pro forma 3.7 billion euro in annual revenue is tied to high-growth segments, such as inflight connectivity.
It expects revenue to grow at a low- to mid-single-digit compound annual growth rate (CAGR) between 2024 and 2028. Pro forma adjusted EBITDA — or earnings before interest, taxes, depreciation and amortization — is forecast at 1.8 billion euros, with mid-single-digit CAGR growth over the same period.