In what looks to be good news for wireless carriers hungry for mid-band spectrum, Intelsat announced it has finalized the required satellite and launch contracts it needs to move forward and meet the accelerated C-band spectrum clearing timelines established by the FCC earlier this year.
The FCC created accelerated timelines to provide further incentives for satellite companies to move to the upper part of the C-band, making room for 5G services in the lower part of the band. Wireless carriers will have a chance to compete for that 3.7-3.98 GHz spectrum when the C-band auction starts on December 8.
To be sure, Intelsat, while using the lion’s share, isn’t the only satellite player that needs to make room for 5G in the C-band. Last year, Intelsat and other satellite companies using the band came under fire when they lobbied to conduct a private auction of the spectrum instead of having the FCC lead the charge.
Ultimately, FCC Chairman Ajit Pai decided the FCC’s well-experienced auction team would conduct the sale, with incentives provided to the satellite companies to move expeditiously. He then was criticized for offering upwards of $10 billion in relocation and incentive payments for them to move. All the while, critics said the foreign-owned satellite companies were getting a windfall for spectrum they were using for free.
In sync with a broader emphasis on U.S.-made goods, along came a focus on using American companies to supply the satellite companies with the gear they need to repack into the upper part of the band.
Intelsat said it has entered into an agreement with U.S.-based Maxar Technologies to build the final satellite required to support its C-band transition and maintain the FCC’s post-transition, “same or better” quality-of-service standard. Earlier this summer, Intelsat announced manufacturing contracts with Maxar and U.S.-based Northrop Grumman for six satellites.
Intelsat said it has contracted with U.S.-based SpaceX and France’s Arianespace to launch these satellites on four separate launch vehicles, beginning in 2022. “The diversity of manufacturers and launch-vehicle providers will lower transition program costs and help Intelsat mitigate potential launch-delay risks that could prevent the company from meeting the FCC’s accelerated clearing deadlines,” the company said in a press release.
Intelsat filed its final C-band spectrum transition plan with the FCC on August 14, where it details the steps required for Intelsat to reconfigure its satellite and terrestrial infrastructure to enable 5G deployment in the C-band.
Intelsat, which filed for Chapter 11 restructuring in May, said its restructuring was intended in part to position the company to participate in clearing C-band spectrum and ultimately be eligible to receive $4.87 billion of accelerated relocation payments.
The satellite company recently announced it will acquire the Commercial Aviation business of Gogo and fund the transaction using cash on hand and borrowings under its $1 billion debtor-in-possession credit facility.