Sat Wars: a new chapter Incumbents facing the broadband revolution and the rise of mega-constellations
Satellite communications have entered the NewSpace age, where a tech-investment boom and the emergence of massive non-geostationary constellations are likely to reshuffle the cards between established players and deep-pocketed new entrants. In this report, we review market opportunities in the sector, as well as technological disruptions and the challenges facing incumbents, while extending our coverage to initiate SES and Eutelsat.We initiate Eutelsat with a Sell recommendation, with the acquisition of OneWeb heavily weighing on financials and the risk profile.
We initiate SES with a Neutral recommendation: rising LEO initiatives are adding new and credible competition to SES’s low-latency MEO constellation. While expectations from C-band proceeds cannot be ignored in the share price, capital allocation remains uncertain in a context of growing competitive threats.
Eutelsat Communications is a private telecommunications satellite operator involved in the design, establishment, operation and maintenance of satellite telecommunications systems covering a large geographical area (extended Europe (including North Africa and the Middle East), sub-Saharan Africa, parts of America and Asia). Co. provides its customers broadcasting capacity and associated services to transmit TV programmes via satellite, cable or Internet Protocol (IP) networks. As of June 30, 2013, Co. owned and operated 31 satellites in geostationary orbit and 4 satellites in inclined orbit.
SES is engaged as a provider of satellite-delivered services. As a strategic management company, Co. operates through a unique network of leading satellite operators around the world. This network comprises the fully-owned SES ASTRA in Europe and SES AMERICOM in the U.S., as well as participations in regional satellite operators. SES ASTRA is European direct-to-home satellite operator. SES AMERICOM operates a fleet of 17 satellites serving the Americas, Europe and the Asia-Pacific region. AsiaSat provides transponder capacity for broadcast, broadband and telecommunications services in the Asia-Pacific region.
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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