Eutelsat to team up with OneWeb to create space internet giant

French satellite operator Eutelsat announced Tuesday that it has signed a “memorandum of understanding” to merge with Britain’s OneWeb and its constellation, an operation aimed at creating a giant in the Internet race ever since…

French satellite operator Eutelsat announced on Tuesday that it had signed a “memorandum of understanding” to merge with Britain’s OneWeb and its constellation, an operation aimed at creating a giant in the race for internet from space against US SpaceX’s Starlink mastodon. .

After announcing on Monday that it was in “discussions (…) with a view to a possible merger” with OneWeb, in which it already owns a 23% stake, Eutelsat confirmed on Tuesday that the two companies’ shareholders would each own a 50% stake. future joint group.

The deal, which will be done through a share swap, values ​​OneWeb at $3.4 billion, which implies a value of 12 euros per Eutelsat share, the company said in a press release.

Completion of the operation is expected “at the end of the first half of 2023,” she added.

Shares of Eutelsat, a geostationary orbit specialist with a fleet of 35 satellites located 36,000 kilometers from Earth for satellite broadcast and broadband Internet services, lost 1.98% to 8.41 euros in a market that fell 0.33 % around 9:10 am.

Although it fell almost 18% on Monday, group general manager Eva Bernecke mentioned during a conference call on Tuesday that there was a lot of “uncertainty” caused by “our lack of communication.” “We are building a growth-focused group,” and this acquisition “is a big change for some shareholders,” she said.

UK-based OneWeb has already deployed 428 of its 648 constellation satellites in low orbit, hundreds of kilometers above sea level, to provide high-speed, low-latency or reduced-latency Internet access to meet rapidly growing demand. .

In addition to the Indian conglomerate Bharti (30%) and Eutelsat (22.9%), OneWeb’s capital includes the UK government (17.6%), the Japanese Softbank (17.6%) and the Korean conglomerate Hanwa (8.8%).

Eutelsat is 20% owned by Bpifrance, France’s state-owned investment bank, and the Strategic Participation Fund (FSP), owned by seven French insurance companies, with the rest of the capital outstanding.

Connect isolated regions

This merger project aims to install the entire high-speed space Internet sector in low orbit, specifically to serve isolated regions without fiber. According to Eutelsat, the market is valued at $16 billion by 2030.

In this race, American billionaire Elon Musk’s SpaceX has taken a step forward. More than half of the 4,408 satellites in the Starlink constellation are already deployed (the company wants 42,000 eventually). Amazon founder Jeff Bezos plans to deploy more than 3,200 satellites for his Kuiper constellation.

The European Union also wants to deploy its own constellation of some 250 satellites in low orbit from 2024 in the name of sovereignty.

“We do not know what the future European constellation will look like, but we are very eager to start a dialogue with the Commission,” Eva Bernecke said on Tuesday.

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

“Low orbiting constellations are a market that could potentially become strategic for governments,” AlphaValue analyst Romain Pierdon told AFP on Monday.

“Now the stakes are becoming more sovereign, we see this with semiconductors and in other industries. The goal is not to depend on anyone, so Europe would be a potential major customer for OneWeb,” he added.

The deployment of the OneWeb group was suspended in February due to the suspension of flights of the Soyuz rocket, adopted by Russia in response to Western sanctions imposed after the invasion of Ukraine.

“This could have set us back for a long time (…) but we have received tremendous support from the United States and the Government of India,” OneWeb Executive Chairman Sunil Bharti Mittal said on Tuesday, adding that a 3.5-launch contract has been awarded. with SpaceX and that the Government of India provided 2 GLSV rockets to complete the deployment of the constellation “certainly by March 2023”.

uk-mra / elk / lum

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