SES and Eutelsat End Long-Running Dispute

SES Eutelsat 28.5 east

Screens showing channels of each transponder in the Digital Network Operations room. Photo: SES

[Via Satellite 01-30-14] SES and Eutelsat have resolved their long-running dispute related to the 28.5 degrees east orbital location. The two companies announced a series of agreements related to this position. Late last year, SES was granted rights by the German Chamber of Commerce to use German Ku-band orbital frequencies at the 28.5 degrees east orbital position from the start of October, effectively giving it the edge in the conflict. The dispute began in 2012 and has lasted the best part of 18 months.

One leading satellite equity analyst who requested anonymity told Via Satellite that the deal, while a “positive” for both parties, was a “sticking plaster type” solution for Eutelsat, with the main benefit being the company will not have to downgrade its revenues. Via Satellite’s source said Eutelsat had done “quite well” given the circumstances, even though SES was the ultimate winner.

The Eutelsat 28A satellite will now be freed up and will be relocated to another orbital location. However, the deal did come at a price, and our source said there will be a financial impact on the company.

Eric Beaudet, a satellite equity analyst at Natixis Securities wrote in a research note, “Eutelsat estimates the total impact will therefore be 5 million of sales for 2014 fiscal year (end-June) and nil thereafter. This is much better than the 20 million maximum impact the group had guided for until now.”

SES and Eutelsat announced three agreements today. The first relates to the right of use of the 500MHz spectrum at 28.5 degrees east. Eutelsat ceased to operate this spectrum on Oct. 3, 2013 and SES has operated there since the aforementioned date. The dispute over this right of use has now been resolved, with SES continuing to operate its satellites at this location and Eutelsat independently commercializing part of the capacity of the previously disputed frequencies.

In the second part of the agreement, Eutelsat contracted long-term satellite capacity on the SES satellite fleet at the 28.5 degrees east orbital position. This will allow Eutelsat to commercialize 125MHz (eight transponders) of the formerly disputed 500MHz over Europe on the SES fleet. Eutelsat will also commercialize the 250MHz (12 transponders) on the SES fleet that were not subject of the legal proceedings. The 20 transponders will be operated on three new satellites, which SES is deploying at the 28.2/28.5 degrees east neighborhood: Astra 2F, Astra 2E and Astra 2G.

The third agreement addresses technical frequency coordination under the rules of the International Telecommunication Union (ITU). It will allow both parties an optimized use of their respective spectrum at a number of orbital positions over Europe, the Middle East and Africa. It confirms and clarifies, in technical terms, the geographic coverage and transmission power levels for frequencies at these positions.

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