In part two of Satellite News’ interview with SES CEO Romain Bausch, the executive leader talks about some of the key challenges and issues facing the operator, including the potential for more hosted payload deals, the launch services market and the potential threat of Over-The-Top (OTT) television to satellite operators.

 

Bausch: There are more hosted payload deals around the corner. We have seen activity from the U.S. government, as well as from the European Union (EU), and I see hosted payloads in both commercial frequency bands and in military frequency bands. We already have EGNOS on SES-5, Astra-5B and CHIRP on SES-2. When planning for future satellites, we’re planning on some of them carrying hosted payloads. For all of these growth satellite opportunities, there are hosted payload opportunities to consider. At the end of the day, decisions will be made on the relative interest for us based on the potential restrictions that could be in place for the final make-up of the satellite. The more payloads you are adding, the more sophisticated the satellite you are building becomes. We have to make a decision on how complex we want to make the satellite, but we have to look at the level of technology and the potential risks we are running into while the satellites are being built. There is also a schedule risk we could face and potential limitations to the flexibility of managing the satellite as part of a global fleet.

 

Bausch: We don’t disclose exact terms and conditions of any contract, but we have contracted the first GTO launch of the Falcon-9 launch vehicle and this is obviously not the pricing that SpaceX will offer once the vehicle has fully demonstrated its capabilities. We have a policy where we go for multiple contracts for Ariane 5 and ILS Proton launch vehicles. Using SpaceX gives us more flexibility in how we can bring satellites to orbit. You are really reducing the costs of launching a satellite by not needing these very capable launch vehicles such as the Proton and Ariane 5 for the launch of small- or medium-sized spacecraft.

 

Bausch: Both Arianespace and ILS have full launch manifests. In terms of whether there will be more or less commercial launches in the next few years, I am not sure. There are also non-GEO constellations that will be launched in addition to geostationary satellites. These new constellations are requiring quite a few launches. You also have some large government programs, which also require launch capabilities. Having said this, it is very clear that there will always be a market for these vehicles, but there will also be opportunities to have smaller satellites launched in a more efficient way. The cost of the launch vehicle, in particular, for small- to medium-sized satellites is very high. So, satellite operators are looking for different ways to optimize the cost of investment programs. That is good for launch service providers, as they will have to find solutions that better meet the needs of operators.

 

Bausch: I think these will mostly, if not exclusively, be non-linear offers. But this is a development that will go at a speed that is not threatening satellite — at least not in the foreseeable future. I am not worried about it all. The terrestrial networks are not able to support all of this video traffic. I see more and more scenarios where you will be combining terrestrial and satellite infrastructure. For example, we now have the Deutsche Telekom Entertain (IPTV) package being offered via satellite. The same is true for France Telecom’s IPTV offer on Astra. This is showing that the telecom operators recognize that in order to have the terrestrial bandwidth available for their subscribers, and to be in a position to offer value-added services on the terrestrial network, they need to offload the linear video content to satellite. The more video that is distributed, the more requests there will be for satellite video distribution.