Science

Internet in space: Eutelsat and OneWeb team up to strengthen Europe’s sovereignty

The merger of the two European entities may allow Europe to compete with American satellites in the orbit of Elon Musk (Starlink) and Jeff Bezos (Kuiper). Macron warned that the project responds to the urgency of building before “cosmic turmoil”.

“It’s a question of sovereignty.” In February, Emmanuel Macron told the Council of the European Union that Europe urgently needed to find its place in orbit in the race to broadcast the Internet from space. This Tuesday, a step was taken: the French Eutelsat and the British OneWeb announced the signing of a memorandum of understanding for rapprochement. The day before, the satellite operator announced that it was in talks to merge with OneWeb, a constellation of about 650 satellites. Matter settled: Eutelsat confirmed on Tuesday that the two companies would each own a 50% stake in the future combined group. Completion of the operation is expected “at the end of the first half of 2023”. Challenge: Serve isolated regions without fiber and compete with US giants Starlink and Kuiper.

Compete with the American giants

“The combined company will be the first multi-orbit satellite operator to offer integrated GEO/LEO solutions. [géostationnaire et orbite basse, ndlr]Eutelsat says. If the project is well placed to integrate the $16 billion communications market by 2030, the Americans already have a head start in this star war. More than half of the 4,408 satellites in Elon Musk’s Starlink constellation are already deployed. As for Jeff Bezos, he plans to install 3,200 satellites for his Kuiper constellation.

“Unity is strength”: This is the bet of two European companies to compete with American giants. To do this, the two companies are betting on a parity merger through an exchange of shares. Eutelsat, a major player in geostationary orbit, has state-owned investment bank Bpifrance as a major shareholder. The capital of the British company OneWeb, supplied from the metropolitan space of the Internet specialist, is divided between the Indian giant Bharti Global (30%), Eutelsat (23%), the UK government (17.6%), the Japanese Softbank (17.6%). ) and Korean Hanwha (8.8%). The company is valued at 3.4 billion euros. Eutelsat is 2.4 billion.

End the White Zones

In low orbit, everyone wants their place. China also has its own project for a constellation of 13,000 satellites called Guowang. From 2024, Europe intends to deploy its own constellation in low orbit, deploying about 250 satellites. Thierry Breton, European Commissioner for the Internal Market, says the project will put an end to “white zones” in Europe. Thanks to these new satellites, states will have, for example, a new encrypted communication using quantum technologies. It remains to be seen whether Eutelsat’s takeover of OneWeb can quickly respond to the continent’s drive for autonomy. So far nothing is playing.

The recent period has been turbulent for both formations. In February, the deployment of the OneWeb constellation was suspended after the cessation of flights of the Soyuz rocket by Russian decree following Western sanctions due to the war in Ukraine. The British company even went bankrupt during the pandemic before being bought out by the Indian conglomerate Bharti and the British government. As for Eutelsat, a few months ago, the operator rejected a takeover bid made by French billionaire Patrick Drai, the majority shareholder of Altice media group. Not enough to calm the markets: Shares of Eutelsat fell 17.7% to 8.57 euros on the Paris Stock Exchange on Monday morning. And on Tuesday, the share of the geostationary orbit specialist continues to decline, which is still at -0.8%. But despite these setbacks, Eutelsat is looking ahead: “We don’t know what the future European constellation will look like, but we can’t wait to start a dialogue with the Commission,” said Eutelsat CEO Eva Bernecke.

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