Latin America News

Eutelsat Acquires Satmex, Orders New Satellite from SSL

Satmex’s control center in Hermosillo, Sonora, Mexico, will soon be acquired by Eutelsat. Credit: Satmex

Eutelsat will pay more than $1.1 billion to acquire 100 percent of Satélites Mexicanos (Satmex), one of Latin America’s leading satellite operators. The deal was driven by changes in the Mexican legal framework, which made a deal much easier to do, according to Richard Roithner, director of satcom at Euroconsult.

“Our understanding is that the timing of the deal has been primarily driven by the change in Mexican ownership restrictions that has occurred very recently, which provided a good window of opportunity for the company to go ahead with a transaction. The company was already close to being sold to Echostar a few years ago and it was more a question of when rather than if it would come to the market again,” he told Via Satellite.

The deal is made of $831 million of capital and Eutelsat taking on a net debt of around $311 million. Eutelsat expects the deal to close by the end of the year.

“The valuation seems to be at the higher end in terms of EBITDA multiples but would seem to be justified given the growth prospects of Satmex and the strategic importance of the Latin American market,” Roithner said.

Satmex has around an 11 percent market share in the region, which puts it on a similar level to SES and Hispasat – Intelsat and Star One are the two biggest players in the region. The company plans to launch its Satmex 7 and Satmex 9 satellites in 2015. The deal though suddenly positions Eutelsat as a major force in Latin America. The company has also announced it is ordering a new high-capacity satellite (Eutelsat 65 West A) from Space Systems/Loral (SSL) designed to serve dynamically expanding video and broadband markets in Brazil and across Latin America.

“The acquisition is definitely showing Eutelsat’s intent to grow its business aggressively and to focus more on emerging regions such as Latin America, as well as the company’s willingness to take some risk and invest in growth opportunities where and when it makes sense. In terms of size, Satmex’s revenue was still less than 10 percent of Eutelsat’s revenue in 2012. However, in terms of growth perspectives and strategic positioning of Eutelsat in Latin America, the acquisition is certainly very significant for the company. Eutelsat seems to send a message to its competitors saying that it will not leave high growth markets such as Latin America or Asia to others, but that it is ready to fight for its piece of the cake,” said Roithner.

Hughes Seminar Addresses Future of Satellite Broadband in Mexico

Hughes Network Systems conducted a seminar in Mexico where more than 100 senior-level satellite industry executives including operators, service providers and government officials discussed the industry’s latest technological developments. During the event, Hughes service provider customers Enlaces Integra, Pegaso Banda Ancha and SSL Digital shared their experiences, case studies and market offerings.

Also, Hughes introduced its latest Ka-band products and presented its roadmap of future developments, including its recently announced plan to launch Jupiter 2/Echostar 19 in mid-2016, with more than 150 Gbps of capacity.

Embratel Partners with PromonLogicalis

Embratel, a telecommunications operator in Brazil has partnered with PromonLogicalis, a provider of services and solutions for information technology and communication in Latin America. Together the companies will offer new telepresence solutions in HD. The target market of the new service is made up of companies with geographically dispersed offices and branches, as multinationals, universities and hospitals that need efficiency in their internal and external processes, involving interaction of people and teams.

With telepresence solutions, participants can gather from various places, as if they were in the same room. Embratel integrates controls and collaboration applications from Cisco technology, into an infrastructure that even allows access from mobile devices. The service integrates supply endpoint connectivity, scheduling interface, managed servers in the Data Center Embratel, transaction services, and media platform and endpoints.