Intelsat is partnering with a South African investor group, led by Convergence Partners, in a $250 million joint venture that will build and launch a new satellite to serve the African continent, officials said Tuesday.
The satellite, named Intelsat New Dawn, will feature a payload optimized to deliver wireless backhaul, broadband and television programming to the continent and is expected to enter service in early 2011.
The manufacture and launch of the Intelsat New Dawn satellite is expected to be completed by 2010, after which the satellite will join the other 25 satellites within Intelsat’s global fleet that provide Africa with critical transmission services.
Africa has been one of the fastest-growing regions for fixed-satellite services in recent years, fueled by demand for critical infrastructure from communications providers and television programmers. Wireless telecom operators, broadband service providers, corporate network service providers and direct-to-home television operators have experienced growth along with the economic development of the region. The New Dawn joint venture was established to provide solutions for African communication needs, and is expected to deliver new capacity for voice, wireless backhaul, Internet and media applications.
The joint venture recently concluded agreements for financing of the project, which is expected to cost about $250 million. The project is to be funded about 15% with equity and 85% with debt, the debt being in the form of non-recourse project financing provided by African institutions. Nedbank Capital, part of the Nedbank Group (one of South Africa’s largest banking groups) and a leading telecom project financier in South Africa has arranged the debt financing.
Nedbank and the Industrial Development Corporation of South Africa, a self-financing national development finance institution, are the largest participants in the debt funding consortium. The equity is to be provided by Intelsat (74.9%) and the Convergence Partners-led group (25.1%), which also includes Altirah Telecoms. Intelsat’s cash contribution to the project is expected to be roughly $25 million.
Over 50% of the satellite’s 28 C- and 24 Ku-band 36 MHz transponder units are under contract, with pre-launch commitments received from leading wireless, network and video service providers such as Vodacom International, Gateway Communications Africa Zain Nigeria and Gilat Satcom. Pre-orders for satellite capacity, or backlog, currently total more than $350 million, with some contracts for up to 15 years of service on the satellite.