Intelsat New Dawn: Glitch Puts Dent in Revenue

Satellite fleet operator Intelsat on Aug. 4 said it stands to lose up to $310 million in revenue already under contract because of the deployment failure of its New Dawn satellite’s C-band reflector antenna.

The revenue loss from customers that had already committed to using New Dawn’s C-band payload, coupled with delays in the launch of the Intelsat 18 satellite, likely will keep Intelsat’s 2011 sales just about at 2010 levels, company officials said.

Intelsat New Dawn was launched in April with a mixed C- and Ku-band payload. After abandoning initial efforts to shake free the stuck C-band antenna, ground control teams deployed — with difficulty — the Ku-band antenna, which is now in full operation, Intelsat said.

But a large part of the satellite’s revenue-generating potential has been definitively lost. Intelsat said in its financial statements released Aug. 4 that the company had already placed into its firm backlog $310.2 million from customers that had committed to using the C-band capacity.

In a conference call with investors, Intelsat Chief Executive David McGlade said Intelsat will try to line up other C-band capacity for its customers, which would at least retain these customers on Intelsat’s books, even if at much lower profit margins for Intelsat.

But with C-band capacity in sub-Saharan Africa still in short supply, and satellites over the region running at C-band fill rates of 90 percent or more, McGlade said the likelihood of placing all these New Dawn customers on competitors’ satellites is remote.

Intelsat’s total contracted backlog at June 30 stood at $9.8 billion. Removing all the New Dawn C-band customers would reduce that figure by just 3.2 percent. But New Dawn and the Intelsat 18 satellite, now scheduled for launch no sooner than October, had been seen as key drivers for 2011 revenue growth.