French company Eutelsat announced this week that talks had begun for a merger with OneWeb to address the “booming connectivity market, estimated to be worth $16 billion by 2030.” The government bought a £400m stake in OneWeb in July 2020 when the company went bankrupt.
It came after Britain left Galileo, the £8 billion satellite constellation that provides positioning, navigation and timing (PNT) services, after Brexit.
While OneWeb satellites provide signals in 3G, 5G, LTE and Wi-Fi for high-speed internet access, experts have said the system could one day be modified to perform the same functions as Galileo.
And now the merger with France could be a huge boost for the UK, according to Mark Boggett, CEO & Managing Partner of Seraphim Space.
He explained: “The UK has taken a whole host of measures that mean they will continue to benefit from that investment (in OneWeb) going forward.
“One is that the UK is the preferred location for all future OneWeb launches. It makes a lot of sense to launch an anchor client like OneWeb in the UK.
“The UK government has also negotiated a guarantee that, when OneWeb procures for production, the UK will be the preferred location for the sourcing companies. The company will remain in the UK and Eutelsat will rise in the London stock market.
“I think the measures of requirements to approve the transaction are really beneficial for the UK and the entire space industry here.
“The company needed a lot of money going forward, so to get the company into an elevated organization where it can raise money through the public markets, I think it’s the right move for this company to make sure it’s well funded. so that it can compete in the global market.”
But fears of the Eutelsat merger have been raised as the UK could lose its ‘golden stake’ in the company.
Former Science Secretary George Freeman warned: “The UK’s gold stake in the LEO satellite constellation OneWeb is an important part of the commercial strategy for the UK’s aerospace industry.
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“Bringing in other investors and making sure the company is well funded while retaining all these benefits, I think it’s the right move.”
The Eutelsat-OneWeb merger will create a “combined entity” that would be “the first multi-orbit satellite operator to offer integrated GEO (geostationary orbit)/LEO solutions,” Eutelsat said.
Eutelsat specializes in Geostationary Orbits (GEO) and has a fleet of 35 satellites located 36,000 kilometers from Earth, which are largely used for satellite television broadcasting, but also provide Internet access.
The OneWeb deal is still subject to approval from national security and Eutelsat shareholders, but OneWeb’s headquarters will remain in the UK.
The French company is also applying for admission to the London Stock Exchange.
Under the deal with Eutelsat, the 36 geostationary satellites in orbit would join OneWeb’s fleet to generate combined sales of £1 billion, the companies said.
While the government has a stake in OneWeb, Indian telecom billionaire Sunil Bharti Mittal has a stake.