SES CEO Adel Al-Saleh has told analysts the financial structure of the agreement with the Federal Communications Commission (FCC) for the clearing and subsequent compensation of the Upper C-band is an improvement for SES when compared to the structure for clearing the lower C-band.

He said that the reimbursement scheme is better than the first C-band restructuring. He confirmed that the seven satellites needed to complete the changeover were already on order. The FCC agreement will see $5.6 billion come to SES in terms of incentive payments, plus the costs of satellite fleet and head-end replacements.

But this positive news, and a half-year report that was generally positive, did not help its share price. The collapse started with the opening of the market on July 30, tumbling from €6.74 to €6.00 in a matter of minutes. At 0 9.30am, the rout continued, hitting €5.52 before ending the day at €5.62.

This situation is amplified by the fact that as recently as the end of May, its share price had touched €9.89. But in the last five days, SES’s share price has fallen 22.48 per cent. A sign of the negative share movements also came in the volumes traded. Normally, SES will see about 1 million shares change hands during a day. July 30th saw 4.65 million shares traded.

Al-Saleh had told analysts that the operator’s first priority was to – in effect – balance the books and bring the business back into “investment grade” and only then would shareholders be given a share of the benefits. With the FCC’s C-band incentive payments not happening before 2030 and 2031, this suggests that ever-patient shareholders need to stay patient for another four years or so.

Share price movements, both up and down, are frequently a mystery and only the investment banks might have a clue as to the motives behind these movements.

Al-Saleh added that the FCC agreement needed the top 75 markets to be cleared by December 2030, and the balance by June 2031. “The clearances need to be faster [than the first C-band restructuring] which they will be.” He told analysts that SES was focused on clearing the frequencies as rapidly as possible but the limiting factor was the availability, in orbit, of the satellites which was why they were already on order.

He also explained that many of the SES contracts for capacity were seasonal in nature, and also that some clients paid at the start of a new contract while others used a phased ‘milestone’ payment structure. The end result of these flexible arrangements was that the 4th Quarter would see more growth and revenues booked than the recent Q2.

Al-Saleh went into some detail on SES’s own satellite factory currently being finished in Luxembourg. Key equipment is being installed now, and by mid-September, SES will see in-house production start of its meoSphere fleet and IRIS2 craft.

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Categories: Articles, Business, Policy, Regulation, Results, Spectrum

Tags: Adel Al-Saleh, C-band, SES