Eutelsat joins rivals in plan to free up U.S. spectrum for 5G

(Reuters) - France’s Eutelsat is joining satellite operator rivals Intelsat and SES in a proposal to free up spectrum for the rollout of 5G mobile networks in the United States, which the companies hope will boost their profits.

FILE PHOTO: Rodolphe Belmer, CEO of Eutelsat, speaks during an address to attendees at Access Intelligence's SATELLITE 2017 conference about the future plans of Blue Origin in Washington, U.S., March 7, 2017. REUTERS/Joshua Roberts/File Photo

5G is the next generation of mobile communications technology which is expected to offer data speeds up to 50 or 100 times faster than current 4G networks, and deliver not just faster phone and computer data but also help connect up cars, machines, cargo and crop equipment.

The companies’ proposal aims to make more efficient use of part of the so-called C-band spectrum in the United States, freeing up space that could then be sold on to mobile operators.

The inclusion of Eutelsat, which owns a smaller portion of the C-band than Intelsat and SES, helps solidify a proposal to the U.S. Federal Communications Commission (FCC).

“We are pleased to be joining this proposal which aims to create fair conditions for the shared use of C-band with mobile operators in the U.S. while protecting the quality of services provided to our customers over the long term,” Rodolphe Belmer, chief executive of Eutelsat, said in a statement.

In a note published on Wednesday, analysts at Exane BNP Paribas were bullish on the potential for SES to benefit from the optimization of C-band spectrum use, saying it could add 10 euros per share in value by freeing up more spectrum than expected.

Other analysts have pointed to uncertainties about the proposal.

“The question is whether they would be allowed to auction off the spectrum they make free and benefit from that,” said Berenberg analyst Sarah Simon, pointing out the regulator may decide profits should go to the state.

The proposed consortium would be open to all satellite operators delivering services in the C-band in the mainland United States, and would deal with transactions with companies wishing to use specific portions of the spectrum for mobile services, the firms said.

The C-band spectrum is used to deliver video and audio programming to more than 100 million U.S. households, as well as for data connectivity in rural areas and services for the U.S. government.

Reporting by Alan Charlish in Gdynia; Editing by Jason Neely and Mark Potter