Intelsat CEO David Wajsgras Explains Why the Time was Right for the SES Deal

The SES deal to acquire Intelsat will be remembered as one of the biggest news stories of 2024. After years of back-and-forth, will-they-won’t-they, two of the largest satellite operators are now working through a combination, pending regulatory approval. But what does it mean for Intelsat, a brand with a storied history in satellite communications?

Via Satellite recently spoke with Intelsat CEO David Wajsgras, who has long promoted the value of consolidation. He sees the answer to competing with well-funded disruptors Starlink and Kuiper in marshalling a “tri-orbit” fleet of the companies’ Geostationary (GEO and Medium-Earth Orbit (MEO) satellites, supplemented by Low-Earth Orbit (LEO) capacity, underpinned by tech-savvy terminals and managed services. In this interview, Wajsgras shares why the time was finally right to do the deal with SES, answers some of the ongoing questions about the acquisition, and talks about the importance of Intelsat’s terminal strategy.

VIA SATELLITE: This is the first time we have spoken since the huge announcement involving SES and Intelsat. Why was the time right to do this deal?

Wajsgras: For the last few years, even before my arrival at Intelsat, there was an enormous tailwind around the concept of consolidation in the satellite communications industry. That was discussed for many years, and then really took on a life of its own when Starlink launched a few years back. We were exiting a financial restructuring when I came in and understood the dynamics of what is going on with the traditional satellite companies. I went public with the importance of formalizing partnerships within the industry, both horizontally and vertically, in order to continue to be able to compete effectively with some of these new players.

We were facing a situation — we could continue to do what we were doing, but we are not seeing growth, and returning the type of value to our stakeholders that we could if we could rationalize costs and the solutions we provide to end customers. It became natural to start thinking about what companies would be best to consider in a combination. Ultimately, it became apparent and it had been on the table that an SES/Intelsat combination could be a company that positions itself to compete effectively. I think it sets up another strong player in a field that is increasingly competitive and getting stronger over time. There was a scenario to go it alone, roll up some small acquisitions, do some partnerships, etc. We looked at that relative to a larger combination, and we determined that the better path was the larger combination.

VIA SATELLITE: Did you seriously consider other players or was this essentially a one-horse race?

Wajsgras: We seriously considered other plans. One of the things that drove us to SES is that they have an effective and operational MEO constellation. They have a very impressive roadmap to continue to develop and expand on those MEO capabilities. One of the things we had done was form a partnership with Eutelsat, primarily with OneWeb, to set up our own multi-orbit strategy.

The strategic thought process was that when we combined, we will be the only company in the world in the foreseeable future that will be able to deliver solutions from all three orbits. You have an all-orbit strategy across the appropriate verticals that we can be competitive in, and we have a terminal strategy to complement that. In spite of the very deep pockets of some of our competitors, we believe we will be well-positioned to compete effectively.

VIA SATELLITE: Last year there was an announcement that the deal was off and soon after, SES announced Steve Collar was leaving the CEO position. Once Adel Al-Saleh was hired, was there a certain inevitability that this deal was going to take place?

Wajsgras: I would not frame it as a certain inevitability. I can speak for Intelsat — there were a number of different opportunities on how to move the company forward. But when Adel and I started to talk about what this could look like, the logic of this combination was in a class by itself for both Intelsat and SES.

VIA SATELLITE: You said you looked at making smaller acquisitions and taking a more organic approach. When was that moment of realization that that wasn’t the right approach?

Wajsgras: We talked a lot about differentiators and our differentiator was being truly multi-orbit and a full-service solution provider, with managed services. This was a big differentiator for us. As we were talking to more customers in different verticals, the multi-orbit, managed service solution really resonated. It was an epiphany from a customer perspective. They said, ‘You broke the code here, this is really what we are looking for.’

We started to think through, how do we take this up a level? First of all, we needed a lot more scale, as quickly as we could put it together. SES’s MEO constellation made it extremely compelling. It became pretty apparent to me and in discussions with our board that this was the opportunity to move forward with.

VIA SATELLITE: What are the regulatory challenges that Intelsat and SES face to execute the merger? Are you anticipating pushback given these two companies operate a huge portion of the world’s capacity?

Wajsgras: You need to look at not just satellite connectivity, but what the telcos are doing around the world and what is going on with technologies such as streaming. You have to look at a more holistic view than just the satellite industry in a vacuum. When you layer on top the satellite advancements from an internet perspective, and the strategy of the telcos, you need to have a profile that can effectively compete in order for companies like Intelsat and SES to remain competitive over time and add value to stakeholders, whether that’s owners or customers.

We’re in the process. We feel confident that we will get approval for all the right reasons, principally from a competitive standpoint and the way it ultimately benefits consumers. It is a very global review process [involving] the Department of Justice, the FCC, the Committee on Foreign Investment in the United States. Then you have the U.K., regimes in Africa, the Pacific Rim.

VIA SATELLITE: What will happen to the Intelsat brand after the acquisition?

Wajsgras: That is still in discussions. Intelsat, as the founding architect of the satellite communications industry, has a very strong and positive reputation. Adel and I have been having lots of conversations. Inside and outside people and groups are weighing in here. The plan of record today is that the new company will be SES. To lose the Intelsat brand altogether doesn’t seem to make a lot of sense. But in all candor, we are still working through this.

VIA SATELLITE: A lot of times in these situations, the CEO of the company acquired leaves soon after the deal goes through. What does your future look like?

Wajsgras: That is a fair question. There are some discussions going on now and that will be determined in the next few months. I am extremely motivated to have this combination be successful and if there is a way I can help that, I will do it. Right now, that is all in discussions, to see whether there is a role for me, and if there is, what that might be. However, it won’t be in management. I will not be part of the management of the new company.

VIA SATELLITE: In March, Intelsat was still going through a decision process for its own MEO constellation. Are you still looking at that?

Wajsgras: We had done an enormous amount of work internally on how to position a very robust MEO constellation. We may or may not move forward with [those plans] in a vacuum. If for some reason the combination doesn’t go forward — I see that as extremely remote — the plan would be to continue down that path.

Assuming it does go forward, we'd be able to take all of what we've learned and developed over a couple of years and incorporate that into future capabilities or architectures of the combined company’s MEO constellation.

VIA SATELLITE: You talked about competing against the likes of Starlink and Kuiper. Can a combined SES/Intelsat compete effectively against Starlink, which has won a number of important contracts? Can traditional operators still compete?

Wajsgras: I absolutely believe that to be the case. We are rationalizing the cost structure of both companies on the operating side and the capital investment side. That will set up a value proposition in two areas. One — in how we invest in new capability. And two — how we are able to economically offer solutions to existing and future customers that are differentiated from the Kuipers and the Starlinks. I go back to the tri-orbit offer. I am quite optimistic that this capability will be fielded in the next couple of years and give us a platform that is truly differentiated from what a LEO-only provider can offer. If you can do that on a cost-effective platform, we become very competitive.

VIA SATELLITE: What is the update on Intelsat’s work with OneWeb? Are you currently using OneWeb’s LEO capacity?

Wajsgras: We are beginning to now. It is rolling out slowly, which was the plan. It is tracking to the plan. It really ramps up when in 2025. Our agreement has a multi-year schedule and we are tracking to that schedule.

VIA SATELLITE: You recently announced an Intelsat terminal strategy and an investment in Greenerwave. Why is a dedicated terminal strategy important to a satellite operator?

Wajsgras: [Our terminal strategy] is one of the things we embarked on as a way to make Intelsat much more competitive with the likes of Starlink or Kuiper. Their focus is on the terminal side — not just the platform side. This is how end customers are looking at differentiation from a service perspective. It wasn’t just the traditional LEO versus GEO and the latency and the quality of service. It is really in the terminal costs. We realized there wasn’t a lot of focus on that. So we started to place a number of strategic bets on New Space companies. HiSky and Greenerwave have incredible, proven technology roadmaps to deliver much lower cost, improved capability terminals for almost any type of environment —fixed, on the move, ruggedized, non-ruggedized. Over the next 24 months [these terminals will put] Intelsat in a much more competitive position than what we have had in the past.

Starlink and Starshield are on a path, but we are also on a path. The markets are big and expanding. It puts us in a much more competitive posture. The terminals are multi-orbit capable. SpaceX with Starlink/Starshield are single-orbit and that is where they want to stay. We are multi-orbit and I do believe this gives us an advantage in terms of quality of delivery.

VIA SATELLITE: What does the deal flow look like for Intelsat for the rest of the year? Is there a business-as-usual mentality?

Wajsgras: I would say it is business as usual with an ever-increasing pace of play. This is a very, very dynamic industry. Things are changing all the time. There are different opportunities and challenges weekly. None of that has changed and that is moving forward in a very impressive way. Concurrently, we are also going through the integration planning for the combined company in the back end of 2025. That is a separate track. The company is continuing to perform well, in spite of the challenges that the industry has, and the ever-increasing competitive nature of the industry.

VIA SATELLITE: Finally, we have seen SES/Intelsat, Eutelsat/OneWeb, and Viasat/Inmarsat combine. Do you think consolidation is over, or is there more to come?

Wajsgras: I don’t think we are done, but I don’t see anything on the immediate horizon. But down the road three to five years from now, there are a lot of situations that could call for more consolidation. It could be horizontal and/or vertical. I don’t see this as being the end of the consolidation. VS