Intelsat looks to new growth as headwinds hit revenues

Intelsat 33e

Multiple headwinds including price competition reflecting over-supply of wide-beam capacity, compounded with currency challenges contributed to a 9% drop in second quarter revenue for Intelsat to US$542 million, and a decline in EBITDA of 13% to US$411 million.

Intelsat said that downward trend would continue ahead of the entry into service of four new satellites launched this year, which it said would generate incremental revenue in the second half.

Media revenue was US$211 million in the quarter, down 5% thanks to the transition of some US customers to more efficient compression standards and the impact of currency fluctuations in Russia.

2Q media business was driven by distribution in Asia, Europe and Latin America. Intelsat said that media business growth would be delivered by the entry into service of Intelsat 31 this month and the launch of Intelsat 36 in August, which supports South African DTH from 68.5° East. The satellite will enter service in the fourth quarter.

Intelsat’s order backlog slipped over the quarter but remains healthy, with orders of US$9.2 billion as against US$9.3 billion in March.

The company said it would compete for an estimated US$3.3 billion in incremental revenue opportunity through to 2021 that will be generated by applications including enterprise broadband, wireless infrastructure, the Internet of Things and commercial and maritime applications.

The company said its 2016 launch programme remains on track with Intelsat 33e and Intelsat 36 scheduled to launch from French Guiana in August.

Intelsat said that it has singed 20 new contracts for its next-generation high throughput Epic NG fleet since April 27, including TIM Brazil.