TAMPA, Fla. — Intelsat said Aug. 14 it’s due for a $3.7 billion windfall late this yr after becoming the newest satellite operator to clear C-band spectrum ahead of schedule for terrestrial 5G telcos in america.
Weeks after launching its seventh and final C-band clearing satellite, the corporate said it had achieved certification for work to maneuver broadcast customers right 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 may 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 greater than $81 billion the FCC raised from auctioning off C-band in 2020 to telcos equivalent to Verizon, which spent $45 billion to snap up the biggest share of the frequencies.
The FCC can be individually reimbursing C-band incumbents for any alternative geostationary satellites that they had to deploy to clear the spectrum.
While Intelsat was capable of compress and re-group C-band services inside existing satellites, they were all reaching the top of their operational lives throughout the transition plan.
Intelsat’s recently launched Galaxy-37 C-band alternative satellite is slated to return online later this yr to exchange Galaxy-13.
Tom McNamara, senior vp of economic programs at Intelsat, who led its C-band clearing project, said the corporate finished clearing the frequencies and protecting ground earth stations from interfering with telcos in June.
The corporate officially certified its clearing work July 12, which the FCC mechanically validated Aug. 11 after 30 days with no 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 yr.
Wajsgras didn’t detail the varied options he said the corporate is considering for the remainder 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 gather around $3 billion later this yr 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 in all them over eight months to maintain a spare on the bottom.
Plans for the proceeds also include paying down debt, SES CEO Ruy Pinto said, together with shareholder dividends and growth-orientated investments he didn’t specify.
SES, which had recently considered merging with Intelsat, stays locked in a legal battle with the operator in an try and split their C-band proceeds equally. Each operators are registered in Luxembourg, although Intelsat’s administrative headquarters are in Virginia whereas SES is predicated within 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 within the U.S. and didn’t have to order alternative spacecraft.
Eutelsat said July 28 it expects to receive $382 million by the top 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 is able to help fund its proposed low Earth orbit Lightspeed constellation.
Claro declined to comment on its spectrum-clearing progress. The corporate was at one point slated to get around $14 million for meeting all of the FCC’s accelerated clearing milestones.