The Satellite Industry's Uncomfortable Truth
SES, one of the world's largest satellite operators, is quietly signaling what the industry has been reluctant to admit: the era of massive, 30-year-lifespan geostationary satellites may be coming to an end. Seven months after closing its $3.1 billion acquisition of Intelsat in July 2025—a deal justified partly on the promise of $190 million in annual capital expenditure savings—the company now faces a decision that will reverberate across the entire space industry: how many of its 90+ large GEO satellites should it actually replace as they reach end-of-life?
This isn't just corporate bean-counting. The answer will fundamentally reshape the economics of space infrastructure and determine which orbital strategy—massive birds in geostationary orbit, mid-tier MEO constellations, or agile LEO networks—will dominate commercial space for the next decade.
A Merger Premised on Traditional Thinking
When SES announced the Intelsat acquisition, the narrative was nostalgic: consolidation would eliminate duplication, slash operational costs, and allow both companies' fleets to serve customers more efficiently. It's the playbook that worked for terrestrial telecom mergers in the 1990s and 2000s. But the satellite industry has fundamentally changed.
The combined SES-Intelsat entity now controls roughly 100+ large GEO satellites—assets designed and launched primarily in the 1990s and 2000s. These behemoths, each weighing several tons and costing $300-500 million to build and launch, were built for a world where satellite bandwidth was scarce and expensive. Operators expected 15-20 year lifespans minimum; many have outlived their original designs by a decade.
The problem: that world no longer exists. SpaceX's Starlink, Amazon's Project Kuiper, and OneWeb have demonstrated that thousands of smaller, cheaper satellites in low Earth orbit can deliver comparable or superior service at lower total cost. Ground infrastructure has improved. Fiber networks have expanded into regions once dependent on satellite backhaul. The demand assumptions from 2005 no longer hold.
The $190 Million Question
The synergy target—160 million euros ($190 million) annually—now reads like an artifact from pre-LEO thinking. Achieving those savings by simply consolidating overlapping GEO coverage only works if you believe large GEO satellites remain the future. But if SES decides that replacing its aging GEO fleet with new large satellites makes no economic sense, those synergies evaporate. Instead, the company faces a choice: maintain the aging fleet longer (risky, expensive, unreliable), retire satellites and cede market share, or pivot toward smaller GEO platforms and LEO/MEO constellations—a complete strategic reboot that negates the merger's original logic.
Historically, satellite operators have always replaced aging spacecraft. It's what kept companies viable. But SES's hesitation signals that the replacement cycle itself may be broken. A new large GEO satellite costs roughly as much as three school buses worth of aerospace manufacturing—but delivers capacity that can often be matched by a cluster of smaller, cheaper alternatives launched via rideshare.
What the Industry Is Watching
SES's next move will influence capital allocation across the entire sector. Competitors like Eutelsat, Inmarsat, and Viasat are watching to see whether large GEO replacement is still a viable business model. If SES shrinks its fleet without corresponding service disruptions, it will validate a new playbook: operate legacy satellites to exhaustion, invest in MEO and LEO, and gradually exit the 1990s-era satellite business.
The irony is sharp: the $3.1 billion merger was supposed to secure SES's future by consolidating the old guard. Instead, it may have locked the company into a strategic reassessment that forces it to admit the old guard's retirement is finally here.






