NEWTOWN, Conn. -- SES continues to focus on growing its satellite services business around the world. To this end, the company continues to purchase new satellites and test new technologies.
SES continues to order satellites to maintain both its geosynchronous fleet as well as the fleet of satellites orbiting in medium Earth orbit (MEO) that the company acquired along with O3b in 2016.
SES ordered three geosynchronous satellites in both 2014 and 2015, with another ordered in 2016. These satellites will replace aging in-orbit spacecraft, while also creating 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.
SES also ordered eight O3b satellites in 2015 and another seven in 2017. The seven ordered in 2017 will be higher power spacecraft that will provide more bandwidth for customers.
The three geosynchronous 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 is a joint purchase between SES and the Luxembourg government. These agreements will improve revenue generation and cash flow for the satellite operator.
While SES eschewed new technology at one time, the company now embraces. SES was an early customer of SpaceX's Falcon 9 launch vehicle, and its sole customer on the March 30, 2017 launch aboard the first 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 Maxar Technologies to extend the life of one of its in-orbit satellites, a technique both companies are experimenting with.
The O3b purchase in 2016 is the most obvious example of SES' embrace of new technology. SES will use the new MEO satellites in O3b's network to expand its presence in the satellite broadband market. SES's allocation of investment capital is changing. The company will purchase fewer large geosynchronous satellites going forward as it shifts its focus to its O3b network. SES will also need fewer satellites due to the life extension of current satellites. The majority of satellites delivered to SES during the forecast period will be intended for MEO. Still, SES has a need to replace aging in-orbit geosynchronous satellites, meaning deliveries will continue at a steady pace through the forecast period.
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