Satellite Internet: Eutelsat decided to team up with Oneweb

French satellite operator Eutelsat wants to marry his British counterpart Oneweb. The new group, owned equally by both partners, will have a turnover of around 1.2 billion euros and 700 million EBITDA in the next financial year. The transaction will be completed by an exchange of shares. The deal values ​​OneWeb at $3.4 billion. Eutelsat is valued on the stock market at $2.4 billion and will pay exceptional dividends to restore parity.

The annual synergy is estimated at around 150 million euros from year 4, while the merger should result in savings of 80 million in the first year and 160 million after year 5.

before star connection

Eutelsat, of which Bpifrance is the main shareholder, is the second largest shareholder (23%) of OneWeb after the Indian group Bharti Global (30%). Its other major shareholders are the UK government (17.6%), Japan’s Softbank (17.6%) and Korea’s Hanwa (8.8%). Oneweb filed for bankruptcy in 2020 when it was owned by Japan’s Softbank.

The telecommunications constellation of the new group should match the ambitions of Starlink (SpaceX) and the Kuiper project (Amazon). While Eutelsat launches satellites in geostationary orbit 36,000 km from Earth that serve both satellite TV and broadband internet, Oneweb deploys small satellites in low orbit (several hundred km) like Starlink, just to connect to the internet. Its network is expected to reach 650 satellites by the end of 2022.

As a sign of the strategic nature of this technology, the European Union has expressed a desire to have its own constellation in low orbit in order to ensure its sovereignty and sustainability in terms of telecommunications. An alliance between Eutelsat and Oneweb can help, as the new group is the most European player in this market, whose economic model has not yet been determined.

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