French satellite operator Eutelsat announced on July 26 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 in the face of US company SpaceX’s Starlink juggernaut.
high speed internet specialists
After announcing on July 25 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 each of the shareholders of both companies owns a 50% stake in the future united 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.
Eutelsat specializes in geostationary orbit and operates a fleet of 35 satellites located 36,000 kilometers from Earth for satellite broadcasts and high-speed Internet access.
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. .
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. As for China, it also has its own Guowang constellation project with 13,000 satellites. “Low orbit constellations are a market that could potentially become strategic for governments,” Romain Pierdon, an analyst at AlphaValue, told AFP. “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.
OneWeb restrains the conflict in Ukraine
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 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, adding that SpaceX has a 3.5-launch contract. and that the Government of India provided 2 GLSV missiles to complete the constellation’s deployment “for certain by March 2023”.