Satellite operator Intelsat said it will receive nearly $3.7 billion in the fourth quarter after completing C-band frequency clearing. “Intelsat’s C-band transition facilitates broader 5G services in the United States, while strengthening our financial position,” said Intelsat CEO Dave Wajsgras. “We reached this milestone well ahead of expectations.”
Early clearing of the lower portion of the band means telecoms gain earlier access, Inside Towers reported. Verizon said this week it’s now gained access to the total amount of frequencies it was awarded in the FCC’s C-band auction, which was completed in March 2021.
The FCC C-band Transition Order set a deadline to clear the lower portion of the band by December 2025, but offered incentive payments to satellite operators if cleared before December 2023. With the validated certification now complete, Intelsat will receive accelerated relocation payments totaling $3.67 billion.
“Half of these proceeds will be used to deleverage our balance sheet, consistent with our debt covenants, while the remainder provides Intelsat with various options to create value and opportunities for all of our stakeholders,” Wajsgras said. That debt was $7 billion after the operator emerged from bankruptcy early last year, according to SpaceNews. “The Intelsat team is well positioned to remain a leader in the satellite communications industry as we continue transforming the company for the future,” Wajsgras said.
The announcement was made weeks after the company launched its seventh and final C-band clearing satellite. Intelsat said it achieved FCC verification of its early move to the upper portion of the band and moved broadcast customers into a narrower portion of the band.
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, according to SpaceNews. The FCC is also separately reimbursing C-band satellite incumbents for any replacement geostationary satellites they had to deploy to clear the spectrum.
While Intelsat was able to compress and re-group C-band services using existing satellites, they were all reaching the end of their operational lives. Tom McNamara, senior vice president of commercial programs at Intelsat, led its C-band clearing project. He said the company finished clearing the frequencies and protecting ground earth stations from interfering with telecoms in June.
Inside Towers reported that the FCC validated the work of SES to clear the lower portion of C-band. That will enable the operator to collect around $3 billion later this year on top of the roughly $1 billion secured from the 2021 interim milestone.
SES remains in a legal battle with Intelsat in an attempt to split their C-band proceeds equally after both made tentative plans to merge, according to SpaceNews. Both operators are registered in Luxembourg, though Intelsat’s administration headquarters are in Virginia.
France-based Eutelsat, Canada’s Telesat, and Claro of Brazil are in line for smaller accelerated incentive payments. These operators hold much smaller portions of C-band in the U.S. and did not need to order replacement spacecraft. Eutelsat said in July it expects to receive $382 million by the end of 2023 for its C-band clearing work, following $125 million in interim proceeds, Inside Towers reported.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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