Wide-Beam Satellite Market 'Not Sustainable,' as Ultra HD Customers Taking Time, Intelsat CEO Says

The increased capacity in the satellite universe will mean challenges for satellite operators focused on traditional wide-beam coverage, Intelsat CEO Stephen Spengler said at a Goldman Sachs investor conference Wednesday. "People putting up standard wide-beam capacity, they are going to have [internal rate of return] challenges when it comes to replacing those satellites," Spengler said. "It is not a sustainable model." He said Intelsat is moving to a model of its high-throughput Epic constellation providing spot beam coverage in dense areas of high demand, and using wide-beam coverage in areas like ocean coverage. Spengler said North America is a little-changed market for media distribution and direct-to-home coverage, and Ultra HD is coming but "slow in developing." The company's North American broadcaster and programmer customers are taking their time planning for Ultra HD, given higher production costs and the expense of Ultra HD infrastructure, he said, saying Ultra HD might be more readily adopted by over-the-top providers. Spengler said he sees a long tail for media distribution via satellite despite the growing prevalence of fiber networks due to the large number of communities off the fiber grid or that lack sufficient fiber connectivity. Close to 5,000 cable headends are served by satellite and a sizable number will remain "well into the next decade," he said.