EUTELSAT, INTELSAT, INMARSAT

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EUTELSAT, INTELSAT, INMARSAT
IGO (Intergovernmental Organisation) ? from
Public to Private
NLC (National Law Company) ? from Private to
Public
Christian Roisse Executive Secretary, EUTELSAT
IGO secigo_at_eutelsat.fr
17th ECSL Summer Course September 2008
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INTRODUCTION
? Overview of the FSS MSS Market prior to the
restructuring of the IGOs
? Creation of - INTELSAT 1964 ? to date 150
Parties - INMARSAT 1973 ? to date 87 Parties -
EUTELSAT 1977 ? to date 48 Parties

• ? IGOs Structure
• - Assembly of Member States
• - Board of Signatories
• - Director General and Staff

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CONTENTS

• Why did the transformation of Intergovernmental
  Organisations take place ?
• What were the challenges for the restructuring ?
• Evolution of relationship between EUTELSAT IGO
  Eutelsat S.A since 2001
• Restructuring and relationship between ITSO and
  Intelsat and IMSO and Inmarsat
• What is the current state of the market and
  future prospects for FSS companies and for IGOs ?

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1. REASONS FOR THE TRANSFORMATION
1.1 External Factors
? The International Environment
- WTO Global liberalisation of basic telecom
services General environment of free trade and
competition
? Convergence of technologies
? The American Context

• FCC Role- Orbit Act

? The European Context

• Green Paper 1990 Satellite Directive 94/46/EC
  13.10.1994- Progressive Liberalisation of the
  Telecommunications Sector to a Full
  liberalisation as of 1 January 1998

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1.2 Internal Factors

• Some Signatories and States viewed
  Intergovernmental attributes as handicaps-
  Slow decision making process - Pricing not
  flexible and responsive - Distribution channels
  controlled by Signatories - Activities open to
  scrutiny by competitors- Investment linked to
  usage and not development

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2. CHALLENGES FOR THE RESTUCTURING OF EUTELSAT
A Case study approach
2.1. EU Clearance
2.2. Changes to International Treaties and
Agreements

• Operating Agreement ? Termination- EUTELSAT
  Convention ? Amended Convention- Headquarters
  Agreement ? New Agreement - Protocol on
  Privileges and Immunities ? Amending Agreement

2.3. New Contractual Agreements

• Transfer Agreement - Article of Association -
  Arrangement between EUTELSAT IGO Eutelsat S.A.

2.4. Continuing Role of EUTELSAT IGO
2.4.1. Ensure continuity in international
collectively-owned rights for frequencies and
orbital locations
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2.4.2. Ensure observance by the company of the
Basic Principles
- Public service/universal service
obligations - Pan-European coverage by the
satellite system - Non discrimination - Fair
competition
2.5. Establishment of National Law Company

• Société Anonyme- Appointment of Supervisory
  Board, Chairman and CEO- Shareholding (Group A,
  B and C) protection of small signatories -
  Voting rights

2.6 Financial issues

• Transfer of assets (satellites/controls)
• Transfer of associated liabilities (Commercial
  Financial Contracts)

2.7 Human resources issues

• - New Staff Contract
• Pension scheme
• Social security issues
• Cultural change

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3. EVOLUTION OF RELATIONSHIP Eutelsat S.A.
EUTELSAT IGO
3.1. Adaptation of Eutelsat S.A. to market
changes and competition since 2001

• Exit of historical shareholders (Telcos) and
  entry of financial shareholders - Change of
  Management Structure- Recapitalisation process
  - IPO of Eutelsat Communications in December
  2005- Exit of financial shareholders and entry
  of institutional and infrastructure companies

3.2. Adaptation of the role of EUTELSAT IGO to
Eutelsat Group evolution

• New tools to ensure the supervision
  Letter-Agreements Censeur seat on Board of
  Directors- Partner to the Eutelsat Group e.g.
  Supporting interventions related to content
  control on distribution of TV programmes and
  related liabilities of Eutelsat S.A. as
  satellite operator

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4. RESTRUCTURING RELATIONSHIPS ITSO
Intelsat / IMSO Inmarsat
4.1 ITSO Intelsat - Case Study Summary

• Restructuring 2001 influenced by FCC / Reports
  to Congress / Orbit Act March 2000 (Open-Market
  Reorganization for the Betterment of the
  International Telecommunications Act)
• - Privatisation and Licensing issues Intelsat
  L.L.C Licensing Order
• - Creation of a holding company organised under
  Bermuda Laws Intelsat Ltd and subsidiaries
• ITSO Role and Mission Lifeline Connectivity
  Obligation (LCO)
• Evolution of relationship since tentative IPO of
  Intelsat in April 2002

4.2 IMSO Inmarsat - Case Study Summary

• Company subject to UK law
• IMSO to ensure that Inmarsat continues to meet
  its public service obligations, including
  obligations relating to the GMDSS
• - IMSO owns one special-rights, non-voting,
  non-transferable redeemable preference share, par
  value 1.00 of Inmarsat Ventures Limited
• - Evolution of relationship since the IPO of
  Inmarsat June 2005

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5. STATE OF THE MARKET AND FUTURE PROSPECTS FOR
FSS/MSS COMPANIES IGOs
5.1 FSS / MSS Key Market Figures

• Attractive Industry
• Excellent financial results 2006-2007
• Intelsat, SES Global, Eutelsat
• Inmarsat

5.2 Future of IGO

• Universal Service Obligations- Increased focus
  on security and recent disasters highlights the
  necessity of satellite solutions- Maintenance in
  the interest of Parties/Members and ability for
  the IGO to adjust to market realities

5.3 Other non restructured IGOs

• - Intersputnik
• Arabsat
• RASCOM

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• For additional information on the IGOs
• EUTELSAT IGO http//www.eutelsatigo.int/
• IMSO http//www.imso.org
• ITSO http//www.itso.int/

• For additional information on the NLCs
• Eutelsat http//www.eutelsat.fr
• Inmarsat http//www.inmarsat.com
• Intelsat http//www.intelsat.com