Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Thursday, August 13, 2020

Mandatory sale of C-band licenses in US revolutionizes satellite world with new fleets and launches

The decision of the Federal Communications Commission (FCC), US regulator, to release spectrum in the 3.7-4 GHz band for use in mobile services will entail concrete and costly changes for the industry, because it forces five central players to reassembly their fleets, and even launch new satellites. There will be changes in the Intelsat fleet with tread in Latin America.

The FCC tailoring process - which entails compensations for Intelsat, Star One, Eutelsat, SES and Telesat for US$9.7 billion - will generate a new fleet scheme in the next three years, with changes also for footprints in Latin America in the case of Intelsat.

So far, the adaptation and transition plans of SES and Intelsat have been known. In times of few announcements, SES selected two US satellite manufacturers, Boeing and Northrop Grumman, to create four devices to release 100 MHz before the end of 2021, and another 180 MHz within two years. SpaceX and the United Launch Alliance (ULA) were chosen as launchers for the SES-18, SES-19, SES-20 and SES-21 satellites, which will be launched into orbit in 2022.

In the SES filing with the FCC, the investment required for relocation is detailed at US 1.6 billion. Together with the new fleet, the satellite operator must deal with 196 services affected by the regulator's decision -114 in domestic satellites and 82 in international ones-: the company will have to carry out 111 frequency or satellite movements, another 68 transfers of services between gateways, 11 will require modulation or compression updates, and six mobile services will require frequency movement on the same satellite.

For Intelsat, the costs reported to the FCC amount to US$1.18 billion. For the seven new satellites it will add to its fleet, it selected Maxar Technologies and Northrop Grumman, and a third is still under negotiation. They are expected to be in orbit between the third quarter of 2022 and the end of 2023. Currently the company has 50 employees dedicated exclusively to the migration process: it must transfer about 80 government clients, pay TV, radio, broadcast in the upper 200 MHz of the C band to the 4-4.2 Ghz section.

While the rest of the operators define their plans - Telesat does not need to launch new satellites, for example - the mobile industry is evaluating options for December 8. That was the date chosen by the FCC for the start of the spectrum auction to be released in band C. In any case, the eventual awardees it will be necessary to have a lot of patience: according to the plans advanced so far by SES and Intelsat, section 3, 7-3.82 GHz will only be released by December 2021; and 3.82-4 Ghz, by the end of 2023.

Latin America. The relocation to the United States will have its greatest impact on the Latin American footprint in the case of Intelsat, due to several satellites with coverage over Mexico, the Caribbean and northern South America.

However, the US regulator's measure is closely watched by its peers in the region, who will also have to resolve the issue of incompatibility in C-band between 5G satellite and mobile services. Brazil is the most advanced country in these discussions: the proven interferences in the coexistence of both services are the main reason for the postponement of the 5G tender to 2021. Juan Pablo Cofino, VP for Latin America at Intelsat, advanced to Convergencialatina a complicated scenario for the region. “There are not only many governments with different economic and social interests, but also multiple satellite operators serving thousands of companies in various business verticals. We are still in the exploration stages, but it will be a great challenge to achieve regulatory consensus to be as homogeneous as possible, allowing operators to plan client migrations, replace satellites with adequate capacity and continue to maintain an inventory conducive to quality services. It will also be pending to define who is responsible for the economic impacts for users of satellite connectivity for migrating their networks to the new frequenciesand how", he stated.

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