Mexico to Expand Satellite Services With EchoStar

[Scott Greczkowski]

SES Affiliate Sistemas Satelitales de México (SSM) Receives Approval From Mexico to Expand Satellite Services With EchoStar

48 New Transponders Available for Satellite Services to Mexican Market

March 19, 2010: 02:19 PM ET

Global satellite operator SES S.A. (PARIS: SESG) (LUXEM: SESG) today announced its affiliate, Sistemas Satelitales de México (SSM), has received approval from the Mexican government to offer Ku-band satellite capacity into Mexico from its AMC-15 and AMC-16 satellites. EchoStar Satellite Services L.L.C., a subsidiary of EchoStar Corporation (NASDAQ: SATS), has acquired the rights to use this capacity from SES and now plans to offer full-time and occasional use space segment to authorized entities in Mexico through SSM.
The authorizations to use the Ku-band spectrum at these orbital positions for fixed satellite services (FSS) were recently granted by the Mexican government to SSM.

Today, AMC-15 and AMC-16 are used primarily by enterprise customers in the United States. Positioned at 105 degrees West Longitude and at 85 degrees West Longitude, respectively, AMC-15 and AMC-16 can transmit video, audio or data with full coverage of Mexico and the United States
.
Also, upon launch in 2011, EchoStar is expected to use capacity on QuetzSat's QuetzSat-1, a high power communications satellite to be located at 77 degrees West Longitude, with coverage of Mexico and North America. EchoStar intends to use QuetzSat-1 for broadcast services for the Dish Mexico direct-to-home service in Mexico and for the DISH Network direct-to-home service in the United States.

"This initiative brings together the strengths of SES and EchoStar in extending the reach and capability of AMC-15 and AMC-16 to accommodate new growth markets, as well as the experience of SSM in the Mexican market," said Rob Bednarek, president and CEO of SES WORLD SKIES.

"With SSM's receipt of the authorizations from SCT and COFETEL to offer services into Mexico, EchoStar will be able to serve a growing regional demand for satellite services," said Dean Olmstead, president of EchoStar Satellite Services. "EchoStar is well positioned to leverage its satellite operations and uplink expertise in the U.S. to expand its fixed satellite services throughout Mexico, including the delivery of satellite Internet services to rural communities."​

 

[whatchel1]

Just a couple of days after

And this is just a couple of days after E* and Satmex deal goes up in flames.
From Sky Report.

On the Satmex front, company debt-holders spurned the transactions' terms, an offer of $267 million in cash. That wasn't exactly a big surprise as observers had noted the debt-holders reluctance to accept less than par value for their Satmex debt from the outset.

Where Satmex goes from here is anyone's guess as the company currently has just one healthy satellite in orbit. Of Satmex's two other satellites in orbit, one is expected to run out of fuel in less than three years and the other is in inclined orbit with minimal sales. The EchoStar deal would have guaranteed a new satellite – something bondholders previously refused to fund on their own.

Also uncertain is EchoStar's path to hoped-for gains in fixed satellite service to the Americas. EchoStar CEO Charlie Ergen has maintained that the company will not raise its price for Satmex.

 

[nelson61]

From the Echostar 10K. Looks like this deal may help Echostar recover some of their 218 million writedown of their leased AMC 15-16 transponders.

AMC-15 and AMC-16 Impairments. In connection with the Spin-off, we assumed satellite lease agreements for AMC-15 and AMC-16, two in-orbit satellites with substantial unused satellite capacity. These assets are part of our "Satellite Services" business. These satellites had substantial unused capacity, our initial business plan contemplated that we would generate cash inflows sufficient to support their carrying values. However, due to fewer opportunities for profitable alternative uses of the satellite capacity and lower demand for satellite services due to the weak economy, we determined that an impairment triggering event had occurred. Based on the results of our 2008 impairment analysis, we recorded impairment charges of aggregating $218 million with respect to these satellites, although we continue to explore opportunities to generate revenues from these assets