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France considers Eutelsat as a strategic asset in the EU push for technological sovereignty.
Benoit Tessier | AFP via Getty Images
For years, France Eutelsat tried to build a European alternative to Elon Musk Starlink satellite high speed service.
The company merged with British Satellite Venture Oneweb in 2023, consolidating the region’s satellite communications industry in order to catch up with Starlink, which belongs to SpaceX.
Last week, the French state conducted an investment of 1.35 billion euros ($ 1.58 billion) in Eutelsat, making it the largest shareholder in the company with a participation of around 30%.
Europe is largely behind the United States in the world space race. The Starlink constellation of more than 7,000 Dwarf satellites from Eutelsat. Meanwhile, Europe’s launch capacities are more limited than the United States, the region is still based on America for certain launch services, which is a market dominated by SpaceX.
Eutelsat currently has a market capitalization of 1.6 billion euros, much lower than estimates the value of the owner of Starlink, who was set at $ 350 billion in a sale of secondary actions last year. In 2020, Morgan Stanley analysts said That they see Starlink reaching $ 80.9 billion in their “basic cases assessment” for the company.
Luke Kehoe, Industry Analyst at Network Monitoring Firm Ookla, Said France’s Investment in Eutelsat Shows the Country “is now Treating Eutelsat Less Like a Commercial Telco and More Like a Dual-Use Critical-Infrastructure Provider” and A “Strategic Asset” In the European Union ‘ technological sovereignty.
However, the construction of a European competitor in Starlink will not be an easy task.
A scale question
Experts from the communications industry tell CNBC that, although Eutelsat can stimulate Europe’s efforts to create a sateral satellite internet supplier, contesting its American Star Rival bond would require a significant increase in investments in satellites of low terrestrial orbit (Leo).
Eutelsat’s Oneweb arm operates a total of 650 Leo satellites, which is less than a tenth of the global satellite constellation of 7,600 stars.
“To offer greater capacity and coverage, [Eutelsat] Must increase the number of satellites in space, a task made more difficult due to the fact that many oneweb satellites are approaching the end of their lifespan and will first have to be replaced before developing the size of the constellation, “CNBC told Constellation, CNBC via email in CNBC.
Kehoe d’Ookla echoes this view. “The chances of Eutelsat to reach parity with Starlink in the satellite high speed segment of the mass market over the next five years remain limited, given the unmatched global scale of SpaceX in Leo infrastructure,” he said.
“Even with the latest capital injection of the French State, Eutelsat continues to take time in several key areas, in particular capital, manufacturing speed, access to launch, spectrum and user terminals.”
Nevertheless, he thinks that the company is “well positioned to succeed in European-Souveraine segments, sensitive to security and to companies which prioritize the control of jurisdiction and sovereignty over the capacity of Constellation Grute”. The company segment refers to the market for corporate space customers.
Could Eutelsat replace Starlink in Europe?
It is certainly hope. Emmanuel Macron, France, urged Europe to increase its investment in space, claiming last week that “space has somehow become an international power gauge”.
When Eutelsat announced its France investment last week, the company stressed its role as “the only European operator with a fully operational Leo network” as well as the “strategic role of the Lion Constellation in the Sovereign Defense model and space communications”.
Earlier this year, Eutelsat would be in the running to replace Starlink in Ukraine. For years, Starlink offered Ukraine its satellite internet services to help the war effort in the middle of the Russia invasion.
Relations between the United States and Ukraine embittered following the president’s election Donald Trump And reports have surfaced that American negotiators had raised the possibility of cutting Ukraine access to Starlink.
Germany installed 1,000 Eutelsat terminals in Ukraine in April in order to provide an alternative – rather than a replacement – for the 50,000 starlink terminals in the country torn by the war.
Since then, US-UKRAINE tensions have somewhat cooled, and Starlink remains the main supplier of large satellite strip of the Ukrainian army.
The former CEO of Eutelsat, Eva Berneke, has herself admitted that the company cannot yet equal the Starlink scale.
“If we had to resume all the capacity for connectivity for Ukraine and all the citizens – we would not be able to do so. Let’s be very honest”, it said in an interview in April with politico.
Berneke was replaced as CEO in May by Jean-François-Fallacher, former executive of the French telecommunications giant Orange.
Apples and orange
Meanwhile, even if Eutelsat has increased investments in the Leo satellite with its Oneweb unit, experts say that its technical architectures and orbital conceptions are ultimately different from that of Starlink.
“The Oneweb constellation is currently using folded architecture, which is not as capable as Starlink satellites; consequently, Oneweb will also have to invest in second generation satellites,” he added.
The use of the French company also differ from that of Starlink. Eutelsat uses a constellation of geostationary orbit (GEO) as well as Leo satellites. Geo satellites orbit the earth at a much higher altitude than their Leo equivalents and can generally cover more land with fewer satellites.
“Eutelsat superior altitude satellites are used for specialized use cases, such as polar coverage for companies and research facilities in distant regions such as Greenland and Alaska,” said Joe Vaccaro, Vice-President and Managing Director at Cisco Milleyes Network Intelligence Unit.
For the future, Eutelsat said that he planned to “rely on his operating improvements” with a “differentiated marketing model” and “strong European anchoring”. He also noted that the British government could also increase its investment in Eutelsat “in due course”.
