French satellite operator Eutelsat announced Monday that it is in talks with its British counterpart OneWeb about a possible merger to create a world-class broadband Internet provider that would compete with US providers such as SpaceX’s Starlink. Eutelsat Communications said it has spoken with its fellow OneWeb shareholders about the prospect of combining all of their shares to create a company that would become the global leader in connectivity in response to recent market rumours. The 23% share of OneWeb is already owned by Eutelsat, which specializes in geostationary orbit with a fleet of 35 satellites at an altitude of 36,000 kilometers for satellite internet services.
OneWeb, on the other hand, has commissioned 428 of a total of 648 so-called low earth orbit satellites, which operate at an altitude of several hundred kilometers. According to Eutelsat, the combined company would be the first multi-orbit satellite operator to offer integrated GEO and LEO solutions. It would also be in a unique position to support the nascent satellite connectivity market, expected to reach $16 billion by 2030.
OneWeb, one of the two largest global LEO networks, has seen recent growth and the company’s services are expected to be fully operational by 2023.
The deal would be a logical development in the productive alliance between Eutelsat and OneWeb. Under the terms of the proposed deal, Eutelsat and OneWeb shareholders would each own 50%.
Starlink and more would get competition
The Satcom sector is already facing strong competition from several private players around the world. Few of the global players, such as Starlink and Amazon’s Project Kuiper, are direct competitors to OneWeb. This partnership would help both OneWeb and Eutelsat take aggressive steps to reach every part of the country with a broadband network via satellite. Starlink is already struggling in markets such as India, where regulatory approvals are not easy to obtain.
