Eutelsat wants to merge with OneWeb and create a space internet giant

French satellite operator Eutelsat is in discussions to merge with Britain’s OneWeb and its constellation, an operation aimed at creating a giant in the race for internet from space against the Starlink juggernaut from US SpaceX.

Eutelsat announced on Monday that it was in “discussions (…) with a view to a possible merger” with OneWeb, in which it is already a 23% shareholder.

Eutelsat specializes in geostationary orbit with its fleet of 35 satellites located 36,000 kilometers from Earth, which are mainly and historically used for satellite television broadcasting, but which also provide high-speed internet.

The British company OneWeb specializes in Internet delivered from space: it has already deployed 428 of the 648 satellites in its constellation in low orbit, at an altitude of a few hundred kilometers, and plans to launch its service worldwide at the end of the year .

“The combined entity would be the first multi-orbit satellite operator to offer integrated GEO/LEO (geostationary and low orbit, ed. note) solutions and would be uniquely positioned to address the booming connectivity market, estimated at $16 billion. i 2030,” Eutelsat said in a press release about this proposed merger.

This operation, if it sees the light of day, is part of larger maneuvers in the space sector to meet the ever-increasing needs for low-orbit high-speed Internet.

Located at an altitude of a few hundred kilometers, the satellites, which are smaller than traditional telecommunications satellites, allow low-latency communication, that is, with reduced transmission delay.

The needs are enormous, whether it is to serve isolated areas without fiber optics or to meet the future needs of the connected car, for example.

In this race, American billionaire Elon Musk’s SpaceX has taken a step ahead. More than half of the 4,408 satellites in its Starlink constellation have already been deployed (it will have 42,000 eventually). Jeff Bezos, founder of Amazon, plans to deploy more than 3,200 satellites to his Kuiper constellation.

– Putting an end to “white zones” –

The European Union also wants to deploy its own low-orbit constellation of around 250 satellites from 2024 in the name of sovereignty. According to EU Commissioner Thierry Breton, this constellation will make it possible to put an end to “white zones” in Europe, to offer encrypted communication to states using quantum technologies and to have redundancy in terms of terrestrial networks, targets of cyber attacks.

As for China, it also has its own constellation project, Guowang, with 13,000 satellites.

“Under the terms of the proposed transaction, the shareholders of Eutelsat and OneWeb will each own 50% of the shares in the combined group,” Eutelsat said.

The transaction will take place by way of an exchange of shares, with the shareholders of each of the two groups owning half of the future entity.

Around. At 8:30 GMT, Eutelsat shares were down 17.7% at 8.57 euros on the Paris bourse, down slightly by 0.12%.

OneWeb went bankrupt during the pandemic and was taken over by the Indian conglomerate Bharti and the British government. Today, Bharti owns 30% of its capital, Eutelsat 22.9%, London and Japan’s Softbank 17.6% each, and Korean conglomerate Hanwa 8.8%.

Eutelsat is 20% owned by Bpifrance, the French state’s public investment bank, as well as by the Strategic Participation Fund (FSP), which is owned by seven insurance companies (7.6%).

The operator had a few months ago rejected an unsolicited takeover offer from the French billionaire Patrick Drahi, majority shareholder in the media group Altice.

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