Europe's Eutelsat, SES set for $6 billion in US spectrum-clearing payments
The logo of European satellite operator Eutelsat is displayed at the company’s headquarters in Issy-les-Moulineaux, near Paris, France, March 30, 2026. REUTERS/Gonzalo Fuentes
July 27 : European satellite operators SES and Eutelsat stand to receive roughly $6.1 billion in combined payments for helping clear satellite spectrum for U.S. wireless services, they said on Monday, sending their shares higher.
SES shares were up 6.6 per cent while Eutelsat gained 5.7 per cent as of 0720 GMT, as investors welcomed the prospect of substantial incentive payments tied to freeing spectrum for U.S. next-generation wireless services.
The Federal Communications Commission's order allocates a total $6.3 billion of incentive payments among satellite operators, with SES set to receive 89 per cent, Eutelsat 8 per cent and Canada's Telesat 3 per cent. The FCC aims to make 160 megahertz of upper C-band spectrum available for mobile operators, with an auction scheduled to begin on April 27, 2027.
Satellite companies must complete the main spectrum transition by December 2030 to receive $4.9 billion of the incentives, with a final deadline in June 2031 linked to a further $1.4 billion. They will also be reimbursed for eligible transition costs, which the FCC estimates at $4 billion to $5 billion.
The net present value of the incentive payments equates to around €6 per SES share, versus less than €0.5 per Eutelsat share, JPMorgan analysts said in a note to investors.
JPMorgan also noted that SES's gross $5.6 billion payment could be reduced by taxes and obligations to Intelsat bondholders, who are entitled to 42.5 per cent of proceeds, or about $1.1 billion, from the first 100 megahertz of cleared spectrum.
For European telecom investors, the decision also indicates the scale of upcoming spectrum spending for U.S. operators. JPMorgan said the coming 2027-2028 auctions could require around $25 billion of spending, potentially challenging expectations for future share buybacks.
