A report on the satellite industry from investment bank BNP-Paribas highlights that a new auction of satellite C-band spectrum (in particular for US 5G use) “is back and too big to ignore”.The report continues: “As is the €800 billion ReArm Europe plan, with its focus on satellite communications. Geopolitical tailwinds are supportive. But amid these positive catalysts, we believe new entrants will increase competitive pressure. We also think a dilutive capital increase for ETL is increasingly likely. With its more solid balance sheet, we prefer SES (+) over ETL (-).”The bank says it was time for a fresh look at the sector, noting: “After several years of pressure, Eutelsat and SES share prices are up 73 per cent and 56 per cent year to date respectively. We revisit our investment case for European Satellite operators and discuss the increasing tailwinds from supportive geopolitical movements, growing competition and the C-band opportunity. In a very challenging industry, we reaffirm our preference for SES (+, TP unchanged at €8) over ETL (-). For ETL, we explore the impact of a potential dilutive capital increase that we think is likely to be required to fund upcoming investments and refinancing needs and maintain our Underperform.”“European satellite operators are likely to face increasingly competitive markets as new LEO (low earth orbit) constellations enter into service in the coming quarters. On 29th April 2025, Amazon started deploying Kuiper with its first rocket launch. On the same day, China’s GuoWang launched the third batch of its 13 000 LEO satellite constellation while only a few hours later SpaceX launched not one but two rockets full of Starlink V2 satellites. We believe capacity supply is likely to continue to increase significantly over the next 18-24 months and this is even before SpaceX manages to fly Starlink V3 on Starship,” continued BNP-Paribas and its satellite analyst Sami Kassab.But it is the prospects for a new C-band spectrum auction which excites the bank.“SES’s balance sheet risk is likely to diminish in the coming months as investors realize the company is likely to reap further financial benefits from the FCC’s intention to clear additional C-band spectrum. We review all comments made on the FCC docket and feel confident in valuing SES and Eutelsat C-band spectrum rights at respectively €771 million and €77 million (on 100 Mhz with a 20 percent price discount to the 2020 awarded pricing levels) and note that a full repacking of the Upper C-band could net SES up to €3 billion. We find particular support in Verizon’s comments advocating for the clearing of the full 200 Mhz of Upper C-band as soon as possible and supporting mechanisms similar to the 2020 repacking. We also note that on May 13th the House Energy & Commerce Committee of the US Congress approved a proposal requiring the FCC to auction 200 Mhz within 3 years,” added the report.
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