NEWTOWN, Conn. - SES continues to focus on growing its satellite services business around the world. To this end, the company is purchasing new satellites and testing new technologies.
SES ordered three satellites in both 2014 and 2015, and another in 2016. These satellites will both replace aging in-orbit spacecraft and provide additional capacity. They will be used to provide video broadcasting, broadband data services, in-air Internet services, and government services. SES-17, ordered in 2016, will provide capacity to Thales for in-air broadband services.
The three satellites ordered in 2015 demonstrate SES's strong relationship with government customers. Both SES-14 and SES-15 will host payloads for the U.S. government, while SES-16 was a joint purchase between SES and the Luxembourg government. These agreements will improve revenue generation and cash flow for the satellite operator.
At one time, SES was known as a conservative company when it came to new technology; however, the company now appears to have embraced it. SES was an early customer of Space Exploration Technologies' Falcon 9 launch vehicle, and now plans to be the first customer to launch a satellite on a reused Falcon 9. The company is also working with OHB AG and the European Space Agency (ESA) to develop an all-electric propulsion satellite under the Electra program. SES also plans to award a contract to either Orbital ATK or MDA Corp to extend the life of one of its in-orbit satellites, a technique both companies are experimenting with.
Another example of SES' embrace of new technology is its August 2016 acquisition of O3b Networks Ltd., an operator of satellites in MEO. SES will use the satellites to expand its presence in the satellite broadband market.
SES capital expenditure investment allocation is changing. The company will purchase fewer large geosynchronous satellites going forward than it has in the past. SES will need fewer satellites due to the life extension of current satellites. SES will also continue to invest in MEO satellites, reducing the need for as many GEO satellites as it had in the past. Still, SES has a need to replace aging in-orbit satellites, meaning deliveries will continue at a steady pace going forward.
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