Satellite communications provider Intelsat, which had substantial commercial aviation clients, announced it has filed for Chapter 11 bankruptcy in the United States, weighed down by US$15 billion of debt. It said the filing was made in order to help it raise cash of at least US$1 billion ahead of a US government spectrum auction. Intelsat may collect US$4.86 billion for giving up C-band spectrum so the airwaves can be used by mobile phone companies to provide 5G services. The satellite company uses the spectrum to beam TV and radio programs to stations, but can give up part of it while still serving customers on frequencies it retains.
Intelsat has until 29 May 29 to tell the US Federal Communications Commission (FCC) if it will accept the payments and quickly clear the airwaves. Filing for bankruptcy gives Intelsat the chance to ask a judge to put any dispute with the FCC on hold while the company reorganises in bankruptcy court.
“This is a transformational moment in the history of our company,” said Intelsat CEO Stephen Spengler. “Our success has come despite being burdened in recent years by substantial legacy debt. Now is the time to change that. We intend to move forward with the accelerated clearing of C-band spectrum in the United States and to achieve a comprehensive solution that would result in a stronger balance sheet. This will position us to invest and pursue our strategic growth objectives, build on our strengths, and serve the mission-critical needs of our customers with additional resources and wind in our sails.”
Intelsat enables airlines to provide in-flight connectivity with a global network of high-throughput satellite (HTS) capacity on its EpicNG fleet and is fully integrated with over 45 wide-beam satellites for added resiliency and redundancy.
Intelsat joins OneWeb, the company with the lofty goal of connecting the world’s airline passengers with fast internet speeds and connecting the world in bankruptcy court. OneWeb filed its petition in March. The company said it had been in “advanced negotiations” for additional investments that would fund the company through its deployment and commercial launch, but those negotiations and “market turbulence related to the spread of COVID-19” pandemic did not bear fruit and thus the Chapter 11 filing.
OneWeb, which has business partners like Airbus, Hughes, Qualcomm and Virgin among others, said in its announcement that it has “successfully launched 74 satellites as part of its constellation, secured valuable global spectrum, begun development on a range of user terminals for a variety of customer markets, has half of its 44 ground stations completed or in development, and performed successful demonstrations of its system with broadband speeds in excess of 400 Mbps and latency of 32 ms. In addition, OneWeb’s commercial team has seen significant early global demand for OneWeb’s high-speed, low-latency connectivity services from governments and leaders in the automotive, maritime, enterprise, and aviation industries”.
CLARIFICATION/CORRECTION: This article earlier carried a photo of the headquarters of OneWeb Satellites in the United States. OneWeb Satellites is a separate company from OneWeb in the UK and did not file for Chapter 11 reorganisation.
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