NEW DELHI: The Department of Telecommunications (DoT) will seek necessary security clearances and examine shareholding in a combined entity following the merger of the UK satellite constellation company OneWeb with French Eutelsatwith an interest in a Chinese wealth fund.
“The department is considering taking security clearances and will ask the department for a promotion Industry and Internal Trade (Dpiit) to further investigate the stakeholder pattern in OneWeb as it merges with Eutelsat which has a stake in a hostile country,” a senior official told ETTelecom.
Earlier this month, French satellite operator Eutelsat signed a definitive all-share deal with British company OneWeb worth $3.4 billion.
“We are not leaving any loophole even though they (the Chinese fund) have a miniscule stake in the combined entity,” the official added.
Beijing-based sovereign fund Chinese investment company has an interest of almost 7% in Eutelsat.
After the border clashes with the Chinese People’s Liberation Army (PLA) in the Galwan Valley, India’s relations with the neighboring country soured, prompting it to adopt restrictive policies.
In July 2020, the Center amended the General Financial Rules 2017 for companies from countries sharing the border with India requiring them to undergo a screening process for registration, making security and political approvals mandatory by the Ministry of Home Affairs (MHA) and the Ministry of Foreign Affairs (MEA).
It has also brought in an online platform under the Secretariat of the National Security Council (NSCS), which required pre-approval for deploying telecom equipment in the country, excluding China’s Huawei and ZTE.
Last year, OneWeb, a space venture of Bharti Global, received a global mobile personal communications by satellite (GMPCs) license from the telecoms department, but is yet to get permission to set up a ground station in India.
Bharti Global, backed by Sunil Mittal, is OneWeb’s largest shareholder and the new deal with rival Eutelsat would bring together the United Kingdom, France, Japan and China.
The partnership will focus on providing satellite communications services to corporate and civil government customers for a wide range of use cases, including connectivity in rural areas, agriculture, hospitals, hotels, schools, and in the energy and mining sectors. OneWeb and Airtel Africa will also provide critical backhaul in underserved and underserved regions.
In the new merged entity, the French-controlled bank Bpifrance, a major shareholder of Eutelsat with a 20% stake, and another investment bank Strategic equity fundHanwha, a South Korean business conglomerate, and the British government are expected to share governance, with Eutelsat chairman Dominique D’Hinnin likely to play a similar role.
Questions to OneWeb, Bharti Global and the telecom department yielded no response.
A strategic initiative by the British government, OneWeb is poised to serve US defense, including classified information, and would enable Five Eyes countries to overcome security and connectivity challenges, according to the company’s latest annual report.
Five Eyes is an intelligence-focused alliance between Australia, Canada, New Zealand, the United Kingdom and the United States, excluding India.
Lately, the country is witnessing increased space-led activity with multinational companies such as SpaceX, OneWeb, Telesat and SES competing for the Indian market.
Besides OneWeb, billionaire Mukesh Ambani’s Reliance Jio-backed Luxembourg SES is the only rival to have received a Gmpcs license, while a joint venture between Tata’s Nelco and Canada’s Telesat is in contention.
OneWeb’s main partners are India’s Bharti Global, Japan’s Softbank, South Korea’s Hanwha and the UK government.
The government announced several reforms this week satcom services to streamline various procedures and releases apart from easing the standards for obtaining the Global Mobile Personal Communication by Satellite (GMPCS) license required to operate as a satcom player in India. It has set a target to connect 1.2 billion Indians to the internet by 2025-2026, in which the role of satellite communications and the space segment will be critical.