French Eutelsat buys OneWeb to compete with SpaceX’s Starlink

In a context of domination of the new generation satellite Internet by the American SpaceX (Starlink), a European giant will see the light of day with the merger of the French Eutelsat and the British OneWeb.

The satellite operator Eutelsat confirms that it has entered into negotiations with the British OneWeb, of which it is already the second largest shareholder, in order to acquire it in its entirety. Behind this possible takeover hides the desire to create a European satellite Internet giant to compete with SpaceX and its Starlink service. The American has indeed taken a comfortable lead in this market by deploying a constellation of more than 2,000 satellites in low orbit. Amazon also plans to market a similar Internet access offer with its Kuiper project.

If we talk about an acquisition, the project actually aims to merge the two companies on a parity basis within the framework of an exchange of shares, taking care to balance the valuation of the two entities (Eutelsat is valued 2, 4 billion euros, OneWeb 3.4 billion). Internally, this hypothetical new structure would be codenamed “New Erika”. Its headquarters would remain in France and its management unchanged, while Bpi France, Eutelsat’s largest shareholder (20%), would have a seat on the board of directors. As for the British government, which owns 17.6% of OneWeb, it would benefit from a right of veto.

To date, OneWeb is the company best positioned to compete with Starlink. The operator already operates 650 satellites in low orbit and has proven the potential of its network through various test phases. Better still, for the past few months, access to the service has been open to eligible customers in Alaska, Canada and Northern Europe (including the United Kingdom), beyond the 50th parallel.

European emergency

From a strategic point of view, it is crucial that a major satellite Internet operator emerges in Europe, in order to guarantee a certain autonomy to the Old Continent in relation to American or Chinese solutions. All the more so at a time when digital sovereignty is on everyone’s lips. Thierry Breton, the European Commissioner in charge of Space, has also launched a satellite constellation project at the end of 2020, with the ambition of starting services in 2028.

Undoubtedly, an actor bringing together Eutelsat and OneWeb has the capacity to go much faster, with the means to improve its infrastructure, its coverage and the quality of its services. Enough to satisfy the Élysée which, at the start of the year, indicated that space congestion is an important subject, where everyone must position themselves quickly before the places are taken.

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