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TAMPA, Fla. — Intelsat said Aug. 14 it is due for a $3.7 billion windfall late this year after becoming the latest satellite operator to clear C-band spectrum ahead of schedule for terrestrial 5G telcos in the United States.
Weeks after launching its seventh and final C-band clearing satellite, the company said it had achieved certification for work to move broadcast customers into a narrower swath of the spectrum.
The Federal Communications Commission set a deadline for satellite operators to clear the spectrum by December 2025, but offered them nearly $10 billion in incentive payments if they could make the frequencies available for telcos before Dec. 5, 2023.
Intelsat was awarded about $1.2 billion after hitting an interim 2021 clearing milestone under the FCC’s transition plan, meaning the operator will receive nearly $5 billion in total incentive clearing payments.
The proceeds come from the more than $81 billion the FCC raised from auctioning off C-band in 2020 to telcos such as Verizon, which spent $45 billion to snap up the largest share of the frequencies.
The FCC is also separately reimbursing C-band incumbents for any replacement geostationary satellites they had to deploy to clear the spectrum.
While Intelsat was able to compress and re-group C-band services within existing satellites, they were all reaching the end of their operational lives during the transition plan.
Intelsat’s recently launched Galaxy-37 C-band replacement satellite is slated to come online later this year to replace Galaxy-13.
Tom McNamara, senior vice president of commercial programs at Intelsat, who led its C-band clearing project, said the company finished clearing the frequencies and protecting ground earth stations from interfering with telcos in June.
The company officially certified its clearing work July 12, which the FCC automatically validated Aug. 11 after 30 days without a challenge.
Intelsat CEO Dave Wajsgras said half the proceeds will go toward paying down debt, which stood at $7 billion after the operator emerged from bankruptcy early last year.
Wajsgras did not detail the various options he said the company is considering for the rest of the proceeds.
C-band jackpot plans
SES announced Aug. 10 that the FCC had validated all its work to clear C-band spectrum, enabling the operator to collect around $3 billion later this year on top of the roughly $1 billion secured from the 2021 interim milestone.
SES ordered six satellites for its clearing strategy, deploying all but one of them over eight months to keep a spare on the ground.
Plans for the proceeds also include paying down debt, SES CEO Ruy Pinto said, along with shareholder dividends and growth-orientated investments he did not specify.
SES, which had recently considered merging with Intelsat, remains locked in a legal battle with the operator in an attempt to split their C-band proceeds equally. Both operators are registered in Luxembourg, although Intelsat’s administrative headquarters are in Virginia whereas SES is based in the European country.
France-based Eutelsat, Canada’s Telesat, and Claro of Brazil are in line for smaller accelerated incentive payments. These operators hold much smaller chunks of C-band in the U.S. and did not need to order replacement spacecraft.
Eutelsat said July 28 it expects to receive $382 million by the end of 2023 for its C-band clearing work, following $125 million in interim proceeds.
Telesat also recently said it expects to get $260 million for the last phase of its C-band clearing efforts, following an $85 million interim payment, which will help fund its proposed low Earth orbit Lightspeed constellation.
Claro declined to comment on its spectrum-clearing progress. The company was at one point slated to get around $14 million for meeting all the FCC’s accelerated clearing milestones.
Jason Rainbow writes about satellite telecom, space finance and commercial markets for SpaceNews. He has spent more than a decade covering the global space industry as a business journalist. Previously, he was Group Editor-in-Chief for Finance Information... More by Jason Rainbow
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