Two major satellite internet companies combine to take on Starlink in Europe

OneWeband Eutelsat plan to combine their fleets to take on Elon Musk’s satellite internet.


French satellite operators Eutelsat and Britain ‘s OneWeb announced plans on Tuesday to merge and create a giant in the growing broadband internet market to rival US tycoon Elon Musk ‘s Starlink.

Eutelsat announced in a statement the signing of an “agreement protocol” to merge with OneWeb , of which it already owns 23%. Shareholders of both companies will share the future company equally, he said.

The transaction, scheduled for mid-2023, will be carried out by exchanging shares and values ​​OneWeb at 3.4 billion dollars, which implies a value of 12 euros (almost the same in dollars) per Eutelsat share , the note added.

Eutelsat is a geostationary orbit specialist with a fleet of 35 satellites located 36,000 kilometers above the Earth for satellite broadcasting and broadband internet services.

Britain ‘s OneWeb has deployed 428 “low Earth orbit” (LEO) satellites , operating at a few hundred kilometers high to provide high-speed internet with low latency or data transmission time.

OneWeb ‘s goal is to deploy 648 satellites for full coverage, essential to meet growing needs.

Among its shareholders are also the Indian conglomerates Bharti (30%) and the Korean Hanwa (8.8%), the British government (17.6%), and the Japanese Softbank (17.6%).

Eutelsat is 20% owned by Bpifrance, the French state’s public investment bank, and by the Strategic Participation Fund, which is owned by seven French insurers. The rest of the capital is floating.

Connect isolated regions 

This merger project aims to position the company in the high-speed space internet sector, in particular to serve isolated regions that lack fiber optics or to meet the future needs of the connected car, for example.

Eutelsat estimated this market at around 16,000 million dollars by 2030.

The operation would give birth to a new giant in front of Starlink , the constellation of the American billionaire Elon Musk (SpaceX), which has already deployed more than half of the 4,408 satellites in its constellation. He anticipates a total of 42,000.

Jeff Bezos, founder of Amazon, for his part plans to deploy more than 3,200 satellites for his Kuiper constellation.

The European Union (EU) also wants to deploy its own low-Earth orbit constellation of some 250 satellites from 2024, in the name of sovereignty.

“We do not know what the future European constellation will be like, but we are impatient to start a dialogue with the Commission,” said Eva Berneke, director general of Eutelsat , on Tuesday .

China also has its own constellation project, Guowang, with 13,000 satellites.

“Low orbit constellations are a market that can become strategic for governments,” said Romain Pierredon, an analyst at AlphaValue.

Pierredon explained that the main challenges currently go through sovereignty and gave the example of semiconductors. “The goal is not to be dependent on anyone, so Europe could be a great OneWeb customer, ” he added.

The suspension of the flights of the Soyuz rocket, which Russia decreed in response to Western sanctions imposed for its offensive in Ukraine, paralyzed the deployment of the OneWeb constellation in February .

Sunir logan paul, chief executive of OneWeb, said on Tuesday that it could be completed “by March 2023” thanks to an agreement with SpaceX and support from the United States and the Indian government. (AFP)