Intelsat Feeling Sequestration, Expects Government Business To Shrink

摘要

Satellite fleet operator Intelsat on May 9 added its name to the list of commercial satellite owners whose business is feeling the effects of forced U.S. government spending cuts, known as sequestration, saying its government business would almost certainly shrink this year compared to 2012. In a May 9 conference call with investors, officials from Luxembourg- and Washington-based Intelsat said that so far, the reductions in U.S. military spending on commercial satellite bandwidth have mainly affected Intelsat's "off network" revenue, meaning contracts managed, by Intelsat that feature satellite capacity provided by other fleet operators. This business, which includes mobile satellite services, transponder capacity and hardware sales, dropped by 17 percent, to $61.8 million, in the three months ending March 31 compared to a year ago. Intelsat Chief Financial Officer Michael McDonnell said the decline in off-network revenue is exaggerated because of $10 million hardware sales a year ago that did not recur.