“I came here for change. That’s the first thing I said to the team, and they understood it very well.” Invited to examine the Luxembourg company’s job offer by a headhunter, Adel Al-Saleh, the then Telekom executive who had previously worked for IBM, did his due diligence. “I had reached the point where I was beginning to wonder what I was going to do next.” At the helm of SES for the past three months, Steve Collar’s successor insisted: “I want to be part of the team that is successful. It is successful today, of course, but there are no guarantees in our market. I want to be part of the team that’s going to put this business on a solid footing for the next ten years.”
Thierry Labro: Were you recruited to finalise the deal with Intelsat or were you aware that discussions were advanced and you accelerated again?
: It's been a very fast, very exciting three months. And it will continue. I was aware that discussions were taking place, because there were already discussions a year ago. This time it’s very different. I wasn’t recruited to complete the deal. When I was recruited by the board of directors and the shareholders, we were aligned on the need for consolidation. In front of the board, we started to evaluate different options. We were lucky that this could be done quickly.
Could you share your vision of the company you have been running for the last three months?
Our vision is very clear. We want to be one of the top leaders in the satellite industry and in satellite communications in particular. That means a lot of things. We have to work very hard to identify the market trends where we want to be leaders. We need to be able to innovate, to deliver highly competitive solutions to the market and to our customers. We also need to have the necessary financial resources.
We are also very proud to have 600 employees in Luxembourg. Of course we will have a large footprint in Luxembourg.
You are already one of the top leaders in the market...
But how do you protect that? We can be the leader today, but not in two years’ time. We have to make sure that we stay in the top three. But that’s not enough. We want to be a healthy, innovative and successful company.
The acquisition of Intelsat may mean that employees from both companies will be duplicated. What can you say today about the sustainability of the 600 jobs at the Luxembourg site, where the headquarters of the future company will remain?
Firstly, for us, it’s very exciting to bring the two companies together and create a strong leader. We’re very proud to continue to have our headquarters here and to have the Luxembourg government as our main shareholder. That’s very important for us and for our customers, because it gives us stability and a foothold. We’re also very proud to have 600 employees in Luxembourg. Of course we will have a large footprint in Luxembourg. The combination requires us to structure the company in a new way. There will of course be some redundancies, but from a macro point of view, our employees will be in a bigger company to develop and grow. As for the details, we don’t have anything to share at the moment. The next few months will be very important as we work on all this. There is no scenario that suggests a drastic reduction in the workforce in Luxembourg.
What about more employees in Luxembourg?
That will depend on the availability of talent. We really do operate in a global market. 99.99% of the planet. We provide services everywhere. We recruit talent wherever we find it. If we find them in Luxembourg, and when we need them, of course we'll recruit them. Big data, artificial intelligence, network engineers: it’s not so easy to find them where you want to find them.
Intelsat has many contracts with US agencies. Government solutions are a fast-growing area for you. Which of you has more to offer the other?
SES already provides many services to the US government. To different parts of the government. We are already the leading solution provider. There are complementarities to serve not just the US government but the European Union, member states, Nato... This gives us the opportunity to provide new services that we wouldn’t be able to offer today. The United States is not alone, even though it spends the most on space. The European Commission is also on the move, as are the UK, Australia and Japan. They all want to provide connectivity for their citizens.
The distribution of quantum keys will be via a LEO, but this is a special case and we have an interesting business case.
Is demand increasing because tensions are rising and military uses are changing?
The global geopolitical situation is quite unstable. Governments have realised that the future of defence lies not just in conventional weapons, but in innovative solutions that also include space. The market is growing, which explains why there are so many competitors. In the past, it was fairly concentrated. For example, one of the very exciting things we are about to launch is the distribution of quantum keys via satellite, a project led by the European Space Agency on which we have the technological lead. This is useful for the military, but also for financial markets, banks and investment funds, because it makes encryption more secure. Three years ago, these technologies weren’t even on the radar... Take the technology deployed by John Deere for smart agriculture or Starlink...
SES and Intelsat have been working in different orbits, GEO, MEO and LEO, via partnerships...
We are creating a very strong multi-orbit competitor, capable of developing services. Our video service is becoming a smaller part of our business but remains very important because it brings content to countries that have no other way of accessing it.
Your predecessor didn’t see any particular point in having a low-orbit constellation, like Starlink, because you need a lot of satellites to get proper coverage. Do you share this approach?
The best way to get access to low-orbit satellites is to form partnerships. From a purely economic point of view. In low orbit, you need thousands of satellites to be competitive. Our priority is to consolidate our medium-orbit constellation, where we are the leader, maintain our high-orbit satellites and introduce software-controlled satellites. The distribution of quantum keys will be via LEO, but that’s a special case and we have an interesting business case. With Planet Labs, we have demonstrated the feasibility of low-latency communications using medium- and high-orbit satellites. With MEOs, this will make it possible to keep latency below 100 milliseconds.
A few years ago, we were also saying that given the volume of data that SES was operating, it might be in its interest to also be a supplier of storage solutions. Especially since the growth of government-related activities will raise questions of sovereignty. Where do you stand on this issue?
We now have large data centres. We work with both public and private clouds. We’re really strict about our policies and cybersecurity... I come from an industry that is very familiar with data centres...
Hence my question...
I don’t see us making it a core business. We’re a company that provides connectivity through space. We already provide integrated solutions, everything our customers need! But a dedicated business, no. I see huge opportunities in terms of big data, to do more analysis and modelling. We have vast quantities of data, on the satellites, on our network, on the traffic in the network, on the behaviour of the satellites. With big data, we could make our satellites even better, our network even better... With artificial intelligence, this will grow. I think our customers will be asking for even more things around that.
We are the only satellite operator that pays dividends.
If the satellite can operate 24 hours a day?
No, not only that. They already want that today. But for example, if we provide a service to a cruise ship. The operator wants to know what the quality of experience is for their customers. How does it work in front of the ship, behind the ship, etc? Where does it work best and could we have more capacity, more power? Is it better when we are at sea or in port? To offer sophistication in the way you use data.
Does that just make it possible to serve your existing customers better?
And? There are some very interesting business cases around big data! How can you use data to predict something? Or to anticipate something? Or to give our operators more capacity to act in the event of a problem? How can we optimise traffic and move data from one satellite to another? The other part is to use big data to enable our customers to be even more successful.
How do you explain the reaction of the markets, which continued to plunge after the announcement of this acquisition?
We are very surprised by the market’s reaction. I’ve spoken to all our major shareholders, I’ve spoken to a lot of analysts and we’ve had both positive and neutral responses. We are the only satellite company that remains investment grade, the only satellite operator that pays dividends. The only one! And we will continue to do so, even after the transaction. And dividends from cash generated, not from new debt! We wouldn’t like that. As we evolve, it's not out of the question that the dividend level will increase. For the time being, I expect our shares to rise, but it will take the market a few days to digest the deal. I hope that this will attract new investors who see the long-term value of the company. We want to secure the future and not take a short-term view.
Originally published in French by and translated for Delano