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Consolidation may ‘not be enough’ for SES, Intelsat

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Consolidation may not be enough to help legacy satellite companies like SES and Intelsat, particularly with the likes of Starlink and Amazon entering the fray.

That is according to Peter Kibutu, advanced technology lead, non-terrestrial networks (NTNs) at TTP, who believes that the potential US$10 billion merger between the two will give them larger combined resources.

It was confirmed at the end of March that SES and Intelsat were in talks about a possible merger.

SES said: “SES confirms that the company has engaged in discussions regarding a possible combination with Intelsat. At this stage, there can be no certainty that a transaction would materialise.”

Yet concerns remain about a possible deal, and Kibutu thinks the two companies still need to ensure their new and existing satellite networks will support superior services, a wide range of use cases and converge with terrestrial networks.

“To achieve this, they should develop their NTNs based on the 3GPP industry standards that were defined at the end of 2022,” Kibutu says.

“Most NTNs today have been built using proprietary technology. The lack of standardisation makes the R&D timely and expensive due to small vendor ecosystems. It also makes interoperability with mobile network operators (MNOs) challenging.”

Kibutu adds that developing standardised NTNs allows satellite companies to efficiently deploy their satellite networks and continuously improve their performance, without spending huge amounts of time and money on R&D.

“They can easily converge their networks with MNOs to provide wider coverage and support additional use cases.”

It can also enable the NTNs to partner with a broader range of NTN-enabled chipset and handset ecosystems, Kibutu adds, bringing satellite connectivity to more users.

“This will make their operations more economically viable and competitive.”

As competition continues to heat up in the 5G NTN market, Kibutu believes that there are steps satellite companies can take to improve the performance of their operations, reduce deployment costs and grow their market share should be pursued.

“While consolidation is valuable, standardisation is vital to unlocking the full potential of NTNs by improving their performance and increasing their scale.”