Wide-Beam Satellites in Price War for Foreseeable Future, Intelsat's Spengler Says

A price war in wide-beam satellite services won't end anytime soon, Intelsat CEO Stephen Spengler said Wednesday during the company's Q2 earnings call. "There is still a lot of traditional wide-beam capacity coming into the marketplace and that is where the business is most competitive," Spengler said. "That is where there is less ability to differentiate services. Until supply and demand gets balanced in that area, it's going to be challenging." Spengler said the company's first Epic satellite is in service and its next, 33e, is scheduled for an August launch, and "wide-beam services will continue to be part of our infrastructure, will continue to be part of our solutions that we provide customers." He also said the company doesn't see a problem with its Epic platform cannibalizing its traditional wide-beam service, with only one customer moving from a wide-beam satellite to less capacity on 29e. In most transitions, Spengler said, "customers have opted for more overall volume of capacity, leading to an uptick in overall revenue." And 33e will have some transition services, but also a "significant amount of new business," he said. For the quarter, Intelsat revenue was $542 million, down 9 percent, due largely to pricing pressures and reductions in point-to-point applications such as trunking, Spengler said. Incremental capacity from the company's four 2016 satellite launches "is essential to offset the revenue pressures that we expect to shadow" the rest of the year, he said. Intelsat stock closed Wednesday at $2.36, down 5.2 percent.