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    Home » Internet and connectivity » Eutelsat’s OneWeb deal is Macron’s satellite dream

    Eutelsat’s OneWeb deal is Macron’s satellite dream

    By Agency Staff25 July 2022
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    Speaking in front of European ministers in February, French President Emmanuel Macron said it was a “matter of sovereignty” to create a satellite offering that could rival Elon Musk’s SpaceX.

    Five months later, Macron could be getting his wish: Eutelsat Communications has launched a potentially US$3-billion-plus takeover of satellite rival OneWeb. The takeover is set to be the latest merger in what has become a race by corporations and governments to offer rapid connectivity via low-orbit satellites.

    Europe has been attempting to build its own satellite system that would make it less dependent on Chinese and US technology. Macron has been urging Europe to enhance its space strategy since at least 2019, citing tensions with the US, and new threats from Russia and China.

    Europe is far behind. Starlink has a fleet of about 2 500 spacecraft launched in the last few years by SpaceX

    At present, Europe is far behind. Starlink has a fleet of about 2 500 spacecraft launched in the last few years by Musk’s SpaceX. Amazon.com’s Project Kuiper is also planning a similar venture.

    Eutelsat, which originally agreed to pay $550-million in cash for a 24% stake in OneWeb in April 2020, operates satellites for clients like government and TV broadcasters from higher geostationary orbit. This doesn’t offer the same quick connection speeds as those that focus on low-orbit satellites.

    Eutelsat’s shares declined 1.4% in Paris on Friday and have fallen 2.8% this year.

    However, the UK has emerged as home to a surprise rival to SpaceX. Founded in 2012, OneWeb collapsed in 2020 when lead investors pulled their money at the height of the coronavirus pandemic. The UK government put forward about $500-million as part of a $1-billion partnership with Bharti Global, in a deal pushed by Dominic Cummings, a former adviser to Prime Minster Boris Johnson, under the guise of protecting a potentially vital tech asset following Brexit.

    Ceded ground

    The UK has since ceded ground. In November, US firm Viasat agreed to purchase London-based Inmarsat Group for $4-billion, creating the world’s biggest geostationary satellite company. Inmarsat had said last year that it planned to launch a constellation of low-Earth-orbit spacecraft and set up 5G wireless networks.

    The new tie-up between OneWeb and Eutelsat is being branded as a merger of equals. As part of the proposed transaction, existing investors in OneWeb would continue to hold minority stakes, the people said. Both the UK and French governments are leading stakeholders in their respective firms.

    The deal still has a host of potential problems. Eutelsat is heavily backed by the French state, while its fourth largest shareholder is the China Investment Corp. It’s also a major distributor of Russian TV channels.

    Eutelsat and OneWeb have contrasting relationships with Russia. OneWeb said in March that it would use SpaceX to launch satellites after Russia blocked deployments planned with French rocket company Arianespace.

    Founded in 2012, OneWeb collapsed in 2020 when lead investors pulled their money at the height of the coronavirus pandemic

    Eutelsat has continued to provide select satellite services to Russia, even after pressure from European regulators. It reaches 50% of homes across the Russian and surrounding region, according to its website.

    OneWeb’s future strategic decisions will also be under additional scrutiny. A major customer of Arianespace, in December it said it would spend $3-billion shifting manufacturing from the US to the UK, according to local press reports. OneWeb currently has a joint venture with Airbus — part owned by France and Germany — to manufacture satellites in Florida.  — Giles Turner and Dinesh Nair, (c) 2022 Bloomberg LP



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