February 2002 through January 2007 – By the time the current SES was still split into SES-ASTRA (The European arm) and SES-AMERICOM (The American arm) as separated satellite operators, Mr. Celso Merege was in charge of South America & Caribbean for SES-AMERICOM.
Along that assignment, Mr. Celso Merege has created SES-AMERICOM´s Brazilian subsidiary, managing a complex executive relationship phase with STAR ONE. At that point, STAR ONE was partially owned by SES-ASTRA and had just emerged from the Brazilian pre-privatization monopoly phase, holding more than 90% of the market share in the country. Resulting of a spin-off from EMBRATEL, STAR ONE belonged 80.1% to MCI and 19.9% to SES-ASTRA.
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© copyright. Picture credit: EMBRATEL S.A. (EMBRATEL / STAR ONE)
Therefore, Mr. Celso Merege had to manage the complex situation of having both related companies (STAR ONE & SES-AMERICOM) addressing the same customers for promoting similar offers and delivering potentially conflicting messages while competing in the same market. An uncomfortable positioning scenario that would potentially lead to price-level loss or image damage in mid-term.
The big accomplishment
Since the beginning, Mr. Celso Merege suggested to his upper management and strongly defended to avoid the companies confrontation by shifting to an indirect market approach through STAR ONE. His proposition was for STAR ONE to buy the majority of the transponders from SES-AMERICOM´s future satellite scheduled for the region (AMC-12), eventually becoming SES-AMERICOM´s channel & reseller for the mentioned satellite, for any future incremental deal of AMC-12´s capacity in the Brazilian market.
Besides the conflict dismiss, such approach would be even more beneficial for both sides. By doing so, SES-AMERICOM would avoid the market entry cost and would neutralize the credit risky of directly retailing its satellite capacity. Therefore, a proportional price discount for STAR ONE would apply.
Regionally supporting a multi-discipline bilateral team of top international executives on negotiating, Mr. Celso Merege paved the way for SES-AMERICOM and STAR ONE to settle a deal where SES-AMERICOM sold 2/3 of AMC-12´s capacity allocated to South America to STAR ONE, single shot deal.
The result, Mr. Celso Merege accomplished the first contract signed by SES-AMERICOM in Brazil to be actually a multi-million CAPEX lifetime term, for eighteen 36 Mhz C-band transponders of AMC-12 geo-stationary satellite.
It took several months of intense and tough negotiation to achieve such a multimillion deal. It involved not only the international bilateral top executive multi-discipline teams, but also intensive talking to the Brazilian Telecommunication Regulatory Agency – ANATEL (www.anatel.gov.br) – to make it viable to create what came to be called C-12 satellite, as a virtually operated satellite, (that is actually a fraction of SEStm´s AMC-12 real payload) at STAR ONE fleet.
STAR ONE has its headquarter in Rio de Janeiro and, along with EMBRATEL and CLARO, currently belongs to AMERICA MOVIL. In Latin America, América Móvil operates under the brands: Telmex, Telcel and Claro, while in Central and Easter Europe under de A1 brand)
C-12 was filled by STAR ONE before ANATEL as a subset of AMC-12 geo-stationary satellite payload, thus preventing SES-AMERICOM to file for the remaining transponders in Brazil (as a regulatory restriction at that time did not allow a physical bird to be split into 2 virtual satellites to be registered by different satellite operators in parallel).
Star One C12 (also called as NSS-10, Worldsat 2, GE-1I, Astra 4A, and AMC-12 at different moments of its lifetime) became virtually operated by STAR ONE.
Hence, as consequence of the deal, STAR ONE also became the exclusive Commercial Representative for any future deals of AMC-12 remaining transponders inside the Brazilian territory, exclusive ordering those to SES-AMERICOM on-demand.
An elegant solution that pleased both STAR ONE and SES-AMERICOM, keeping a healthy market approach while leveraging a quick & safe indirect market access to SES-AMERICOM.
Historical continuation facts about EMBRATEL / STAR ONE
On April 2004, with the aproval he US court handling MCI’s bankruptcy process, Mexican telco TELMEX (NYSE: TMX) bought Embratel (NYSE: EMT) from its parent company MCI, for US$360mn. Therefore, TELMEX also became owner of 80,1% of STAR ONE – as an EMBRATEL subsidiary -, while SES still had the remaining 19.9%. At that time, Telmex agreed to give to the Brazilian government a golden share in STAR ONE, allowing the state to veto strategic decisions at the operator. The government has complained that TELMEX would have control over strategic military communication in the event of an EMBRATEL acquisition, and requested some form of control of STAR ONE.
In February 14th, 2014, GE Capital decided to sell its 19.5 % stake in satellite-fleet operator SES Global in exchange for a package that is 47.5 % cash and the rest in SES-held satellite assets. It called for GE Capital to receive SES Global’s 19.99 % ownership of fleet operator STAR ONE of Brazil and 34 % share of AsiaSat of Hong Kong. GE also took ownership of the orbiting AMC-23 telecommunications satellite over the Pacific Ocean, plus the Satlynx two-way enterprise broadband communications business and SES’s 5.5% percent stake in Orbcomm, a provider of global satellite-messaging services. These assets, valued at 650 million euros ($846 million), along with 588 million euros in cash, were placed into a new GE Capital-owned company called SES International Holdings Inc.
In April 2011, STAR ONE became 100% EMBRATEL, when AMÉRICA MÓVIL bought the remaining 20% from GE Capital, as part of an internal reestructuring process of the Mexican Group.
Historical facts about AMC-12 / C-12
AMC-12 satellite was built by Alcatel Space (that later became part of THALES ) as a Spacebus 4000 spacecraft, the first of this generation platform. AMC-12 is a high-powered C-band satellite with 72 transponders organized into three regional beams: North America, South America and Europe/Middle East/Africa. The satellite’s advanced design and high power levels support a wide range of applications, from TV broadcasting to high-speed internet connections, facilitating reception and higher data throughput to smaller C-band antennas. AMC-12’s extensive coverage reaches from the U.S. to the eastern reaches of the Mediterranean, plus from Cape Town in South Africa to Lima in Peru. For additional flexibility and reach, the three beams can also be interconnected through on-board switching on an individual transponder basis.
Originally ordered by GE-Americom and originally named as GE1i, on 2004 was shift into an already extinct SES-AMERICOM subsidiary called WORLDSAT LLC and temporarily re-named to WORLDSAT 2. On the beginning of 2005, a bit before its launch, took the name of AMC-12. In March of 2007 , after NewSkies fleet was aquired by SES, AMC-12 was transferred to SES NewSkies and renamed NSS-10. In the meanime, since 2005, the 18 transponders operated by EMBRATEL STAR ONE were marketed as Star One C12.
AMC-12 was successfully launched on February 3rd 2005 at 03:27 UTC , through a vehicle Proton-M / Briz-M (Ph.1) from the Baikonur Cosmodrome in Kazakhstan . It had a launch mass of 4,953 kg. AMC-12 went to 37.5 degrees West longitude orbital position, a very favorable orbital position for operating into the Brazilian Market. Since its launch in 2005 and until nowadays, the satellite has been serving the Brazilian market only through the subset of transponders that now belong to STAR ONE and known as C-12. Key applications are video distribution, telephone landlines & mobile backbones plus corporative international networks. C-12 satellite is focusing customers that have international communication needs, aiming applications such as video distribution of international content, distance learning, governmental services, IP backbones, international events, sports etc.
The high-level confidence on the executive relationship established along the process was crucial for such agreement to happen, given the fact that it has been signed on July 2004, almost one year before the launch of the satellites itself, on February 2005. That kind of deal known as a pre-launch agreement.
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Always count on the widely respected experience and networking of MEREGE Consulting Partners to reach out to the right people at the right time.
