Intelsat, the geostationary fleet operator, expects to make a decision on whether to proceed with plans for a medium Earth orbit (MEO) constellation in early 2024. The company has requested proposals from nine satellite manufacturers and anticipates receiving responses in October.
According to Toby O’Brien, the chief financial officer of Intelsat, the business case and funding profile for the initial network of 18 MEO satellites are currently being worked out. A final decision on the constellation is expected in approximately six months.
Funding for the MEO constellation could come from the $3.7 billion Intelsat is due to receive in October for clearing C-band spectrum, along with roughly $1 billion already received in interim payments.
As part of commitments made to lenders, Intelsat is required to spend half of the clearing proceeds on paying down debt. The company emerged from Chapter 11 bankruptcy last year with a debt of $7 billion.
In addition to the MEO constellation, funds from C-band clearing are also being used to finance the acquisition of five geostationary satellites. These satellites, ordered from Thales Alenia Space, Airbus, and 3D printing specialist Swissto12, are expected to be in orbit by the end of 2026.
Intelsat aims to deploy the MEO constellation in 2027 to provide services by the same year. The company has recently invested in Aalyria, a Google spin-off that is developing optical communications technology for potential use in Intelsat’s MEO network.
The addition of MEO satellites would further differentiate Intelsat’s products and help meet emerging connectivity needs. The company achieved top-line growth for the first time in a decade in 2022, driven by commercial aviation and government business, and is projecting continued growth for 2023.
Intelsat had previously considered merging its geostationary (GEO) network with SES, but talks broke down in June. The company has no concerns about accessing the capacity of OneWeb, which is on the verge of being sold to Eutelsat. However, the agreement with OneWeb does not cover the second-generation constellation jointly considered by Eutelsat and OneWeb for potential deployment in 2025.