Intelsat CEO David Wajsgras confirms the logic behind the decision for SES to buy his business, saying that there had been a tailwind of talk about mergers and consolidation for years, and that the decision to come together was needed in order to be able to compete against the new players in space, not least Starlink.

“We were facing a situation — we could continue to do what we were doing, but we are not seeing growth, and returning the type of value to our stakeholders that we could if we could rationalize costs and the solutions we provide to end customers. It became natural to start thinking about what companies would be best to consider in a combination. Ultimately, it became apparent, and it had been on the table that an SES/Intelsat combination could be a company that positions itself to compete effectively,” he told a trade magazine.

The appeal for Intelsat was that SES owned a viable and growing Middle Earth orbiting (MEO) fleet (in the form of O3b/mPOWER). Intelsat also had a working relationship for leasing capacity with Eutelsat’s Low Earth orbiting system, OneWeb. Wajsgras added that in Intelsat’s view the combination with SES meant that the new business would have geo-stationary, MEO and LEO access, which Intelsat felt would be well-positioned to compete withy rivals very effectively.

Wajsgras said that the use of the Intelsat brand name, post consolidation, was still being discussed. Indeed, his own position was being determined but that he would not be part of the new management team once the deal wrapped.

However, past work done at Intelsat on developing its own LEO offering was not in vain, and that – assuming the consolidation took place – could be taken forward should the new company decide it made sense.

He also firmly believed that the combined SES+Intelsat could successfully complete against the likes of Starlink and the new Project Kuiper from Amazon. One of the inevitable consequences of the consolidation was a rationalisation of both companies and their cost bases.

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Categories: Articles, Business, M&A

Tags: David Wajsgras, Intelsat, SES