Airbus has signed a contract with Intelsat to build two OneSat satellites operating in multiple frequency bands for Intelsat’s next-generation software-defined network. The contract was signed on 31 December 2020.

Intelsat selects OneSat for next gen SDS network

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Airbus has signed a contract with Intelsat to build two OneSat satellites operating in multiple frequency bands for Intelsat’s next-generation software-defined network. The contract was signed on 31 December 2020.

Airbus has signed a contract with Intelsat to build two OneSat satellites operating in multiple frequency bands for Intelsat’s next-generation software-defined network.

The satellites will be based on Airbus’ OneSat product line, the latest generation of fully flexible, in orbit reconfigurable, Software Defined Satellites (SDS).

Airbus will deliver an end-to-end fully integrated solution, including design and manufacture of the satellites. The highly capable ground segment software components, when fully integrated into Intelsat’s next-generation software defined network ecosystem and advanced digital suite will allow dynamic operation of end-to-end satellite resources. The two next generation SD satellites will be delivered in 2023.

The Airbus Software Defined satellites will deliver powerful performance and a ground-breaking experience for Intelsat customers across multiple geographic regions. This agreement also marks the beginning of a radical evolution of Intelsat’s network; Intelsat is pursuing an aggressive, multi-year network transformation plan with investments in new assets that are designed for extremely high speeds, enhanced capacity flexibility, redundancy and backwards compatibility.

Intelsat Chief Executive Officer Stephen Spengler said: “Intelsat’s investment in Airbus software defined satellites marks an important first step in evolving the world’s largest, most resilient, integrated space and ground network. Intelsat’s next-generation software-defined network will be the catalyst for our growth, enabling future Gogo Commercial Aviation in-flight broadband services, as well as other managed services across Intelsat’s customer segments.”

Gogo HQ - external skysline

Gogo Commercial Aviation becomes part of Intelsat family

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Gogo HQ - external skysline

Intelsat has completed its acquisition of the Commercial Aviation business of Gogo in USD400 million cash deal.

Gogo will continue as a publicly traded company, now singularly focused on leveraging its ATG network and proprietary spectrum to serve the business aviation market.

According to Oakleigh Thorne, President and CEO of Gogo: “The completion of the sale of our CA business to Intelsat marks the beginning of a new chapter for Gogo; we are a leader in business aviation and now turn our singular focus toward serving that attractive market. Our business aviation division has proven resilient in the face of the COVID-19 pandemic, as the number of business aircraft online today has nearly returned to January levels.

“Looking forward, we see great opportunity to create value for our customers, employees and shareholders,” Thorne added. “And on behalf of all of us at Gogo, I want to extend my sincere thanks to the talented CA team that joins Intelsat today. The opportunities that await them are a testament to their unwavering dedication and commitment to Gogo and their aviation partners.”

“Combining Intelsat’s next-generation global telecommunications network with Gogo Commercial Aviation’s leading capabilities and airline relationships will create unprecedented innovation in in-flight digital connectivity, unlocking exciting new growth and brand loyalty opportunities across the airline industry,” said Intelsat Chief Executive Stephen Spengler. “With our powerful, integrated offering, airlines will no longer need to trade off speed, reliability or availability for coverage, even when flying at full capacity in and out of the busiest airport hubs.”

Intelsat announced several leadership changes, effective as part of the deal close.

John Wade will remain president of Gogo Commercial Aviation, now a division of Intelsat.

Bruno Fromont has been named Intelsat’s Chief Technology Officer. He will lead spectrum strategy, asset planning, product development and innovation.

Jon Cobin has been named Intelsat’s Chief Strategy Officer, leading the company’s corporate strategy and business development efforts.

Gogo to sell its commercial aviation business to Intelsat for US$400 million

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The Gogo Board of Directors has approved the transaction. Intelsat expects to finance the transaction utilising cash on hand and borrowings under its US$1 billion debtor-in-possession credit facility and has obtained support from key economic stakeholders, as well as approval from the US Bankruptcy Court for the Eastern District of Virginia, Richmond Division, to complete the acquisition. The transaction, which is expected to close before the end of the first quarter 2021, remains subject to customary closing conditions and certain regulatory approvals.

“Following a competitive strategic review process, we’re confident this transaction unlocks the full value of the CA business for shareholders,” said Oakleigh Thorne, Gogo’s President and CEO. “Combining CA, the leading inflight connectivity provider, with Intelsat, the world’s largest global satellite operator, will create the leading vertically-integrated IFC business in the world, with the additional resources and scale to support continued growth and innovation as demand for commercial air travel recovers.”

“With shared values and a clear commitment to working with the CA team to grow the business, we are confident Intelsat is the right partner. I am extremely grateful for the CA team’s efforts – particularly over the past few months. Today’s announcement is a testament to the strength of the business they have built,” Thorne said.

Gogo, which will remain a public company, will use the proceeds from the transaction to improve its net debt position and continue to invest in growth opportunities such as Gogo 5G. With greater financial flexibility, including a lower cost of capital over time, the new Gogo will be better positioned to enhance the scale and profitability of its Business Aviation (BA) segment, which is uniquely well-positioned in an attractive and underpenetrated market. 

“This transaction creates a stronger and more focused Gogo, with the singular strategic imperative of serving the business aviation market with the best inflight connectivity and entertainment products in the world,” Thorne said. “The BA market continues its sharp recovery and strong demand growth trajectory, and our BA segment is exceptionally well-positioned to drive long-term value creation in that industry.”

As part of the transaction, Gogo will enter into a ten-year network services agreement under which Intelsat will have exclusive access to Gogo ATG services for the CA market in North America, subject to minimum revenue guarantees of $177.5 million.

Intelsat intends to operate the CA business as an independent business unit, led by current CA President John Wade. The CA business will remain based in Chicago.

BDT & Company served as primary financial advisor to Gogo, J.P. Morgan and Morgan Stanley & Co. LLC served as financial co-advisors, and Debevoise & Plimpton LLP served as legal advisor.

Intelsat to pursue Chapter 11 Bankruptcy measures

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Intelsat has filed for Chapter 11 Bankruptcy as it seeks to facilitate financial restructuring as it prepares to participate accelerated clearing of C-band spectrum under the Federal Communications Commission order in support of a build-out of 5G wireless infrastructure in the US.

The Company is also managing the economic slowdown impacting several of its end markets caused by the COVID-19 global health crisis.

“This is a transformational moment in the history of our company,” said Stephen Spengler, Chief Executive Officer of Intelsat. “Intelsat is the pioneer and foundational architect of the satellite industry. For more than 50 years, we have been respected for quality, innovation, sector leadership, and premium services. Our success has come despite being burdened in recent years by substantial legacy debt. Now is the time to change that. We intend to move forward with the accelerated clearing of C-band spectrum in the US and to achieve a comprehensive solution that would result in a stronger balance sheet. This will position us to invest and pursue our strategic growth objectives, build on our strengths, and serve the mission-critical needs of our customers with additional resources and wind in our sails.”

To facilitate the financial restructuring, Intelsat and certain of its subsidiaries have filed voluntary

While it moves as quickly as possible through the restructuring process, Intelsat’s day-to-day operations, engagement with customers and partners, and capital investments will continue as usual. The Company will continue to drive its business forward – launching new satellites, investing in its ground networks, developing new services, and progressing Intelsat’s next generation network and service strategy at full speed. No changes to the Company’s operations or workforce are planned.

In October 2019, Intelsat 39 (main picture) which provides video distribution and connectivity services for mobile network operators, enterprises, governmental entities, as well as aeronautical and maritime service providers operating in Africa, Asia, Europe and the Middle East, entered into commercial service.