The Federal Communications Commission (FCC) has issued an order allocating a total of $6.3 billion in incentive payments among satellite operators. This move is designed to clear 160 megahertz of upper C-band spectrum for use by mobile operators, with a planned auction starting on April 27, 2027.
Under the agreement, SES is set to receive 89% of these funds, while Eutelsat will receive 8% and Canada's Telesat will receive 3%. Collectively, SES and Eutelsat are expected to receive approximately $6.1 billion in payments for their role in clearing the satellite spectrum.
To qualify for the majority of the payout, satellite companies must complete the primary spectrum transition by December 2030. A final deadline in June 2031 is set to unlock an additional $1.4 billion of the incentives.
The FCC estimates that eligible transition costs for these companies will range between $4 billion and $5 billion, which are intended to be reimbursed through the incentive payments.
Market Reaction and Analyst Outlook
Following the FCC announcement, market shares reacted positively; SES shares rose 6.6% while Eutelsat shares gained 5.7%. This surge pushed SES to a one-week high as the payout and corresponding gains were signaled.
JPMorgan analysts noted a disparity in the net present value of these payments between the two providers. They estimated the value at approximately €6 per SES share, compared to less than €0.5 per Eutelsat share.
The gross $5.6 billion payment for SES may be reduced by taxes and obligations to Intelsat bondholders. These holders are entitled to 42.5% of the proceeds—approximately $1.1 billion—from the first 100 megahertz of cleared spectrum.
Despite the significant payout, JPMorgan noted that upcoming auctions in 2027 and 2028 could require roughly $25 billion in spending. This high expenditure level may challenge expectations for future share buybacks.