Report by New Street Research
Very exciting launch as New Street Research starts covering the Space Economy focused on satellites, components, connectivity services and datacentres. Initial coverage is SpaceX, Rocket Lab, Planet Labs, Viasat, Telesat, Iridium, SES, Eutelsat, EchoStar, AST SpaceMobile and Space 42. The team is led by David Barden, Pierre Ferragu and James Ratzer.
Report by Kolytics
Kolytics’ latest Towers sector research, “Poor Signal…!”, analyses the market reaction to EchoStar’s $40bn sale of 5G spectrum to AT&T and SpaceX. While Tower REITs sold off sharply, Kolytics argues this response is misplaced. EchoStar lacked the capital to execute its Direct-to-Device strategy, but AT&T’s spectrum purchase should drive incremental tower investment to improve its lagging mid-band 5G coverage and SpaceX’s spectrum use is complementary, not competitive, to terrestrial networks. Importantly, Tower REITs’ direct exposure to EchoStar revenues is capped at just 2-5% under long-term leases. With data demand still growing at 15-20% p.a., Kolytics sees the sector’s fundamentals as intact - and the sell-off as a market overreaction.
Report by CTFN
According to CTFN’s industry sources, DISH’s merger with satellite communications company SATS is unlikely to face burdensome regulatory hurdles at the US Federal Communications Commission and is expected to be received as an effort by the acquirer to meet its upcoming 5G buildout deadline. The merger will allow both parties to combine the expertise and financial assets of SATS while allowing DISH to raise additional capital. While rival telecom players can be expected to oppose the deal, these concerns will not have much sway at the agencies as the parties involved will argue that DISH is a new entrant in the wireless business trying to compete against incumbents.
Multiple satellite operators to be affected by the $7.3bn blockbuster deal - including Eutelsat, EchoStar, Intelsat, Iridium, Telesat, and SES. Quilty Analytics expects the merger to be transformative for Viasat, and one that will rekindle industry interest in satellite operator consolidation. However, complicated network integration, heavy regulatory scrutiny, and potential dissonance between corporate cultures will make for a lengthy subsumption of Inmarsat.