No summer break in the small world of space. The French operator Eutelsat confirmed, Monday, July 25, to be in negotiations for the acquisition of the constellation OneWeb, specialist in internet connectivity by satellite, of which it already owns 23%. Eutelsat, the world’s third largest operator (35 telecom satellites in geostationary orbit, 36,000 km from the Earth), would thus get its hands on one of the most advanced low-orbit (450 km) satellite constellation projects: OneWeb has already placed on orbit 428 of the 648 satellites in its constellation. The British group is, for the moment, the only really operational competitor to SpaceX’s Starlink constellation, which already has more than 2,600 satellites in orbit: the giant Amazon has not yet started launching the satellites of its Kuiper constellation, and the Canadian Telesat is still working on the financing of its Lightspeed project.
Why this operation? To understand, a small technical reminder is necessary. Eutelsat traditionally relies, for the broadcasting of television channels as well as for Internet connectivity, on large satellites located in geostationary orbit (36,000 km altitude). These have the advantage of remaining permanently above the same geographical area, unlike satellites in low orbit, which revolve at high speed around the Earth. These 5 to 6.5 tonne satellites have two other major advantages: their lifespan (15-20 years compared to 5-8 years for low orbit), and their power. The Konnect VHTS satellite, which is to be launched on September 6 by an Ariane 5 from Kourou, will thus be able to offer, on its own, broadband to half a million households.
Market estimated at 16 billion
But these so-called GEO (Geostationary Earth Orbit) satellites have a weakness: their relative distance from the earth’s surface generates significant latency (data transmission delay), prohibitive for applications such as online games or trading. Conversely, low orbit satellites from Starlink or OneWeb, which are much closer to the ground, offer much lower latency. It is this complementarity that appeals to Eutelsat. “The combined entity would be the first multi-orbit satellite operator offering integrated GEO/LEO (geostationary and low orbit) solutions, and would be uniquely positioned to address the growing connectivity market, estimated at $16 billion. by 2030”, underlines the group in a press release.
If the operation succeeds, Eutelsat would have a very solid offer to compete with the scarecrow Starlink (SpaceX), which already has more than 400,000 subscribers worldwide. “Multi-orbit is the future, believes a space specialist. A multi-orbit fleet would make it possible to offer combined offers, based on satellites of different orbits, which would make it possible to cover all the markets of connectivity, and to have a robust network, where satellites in GEO orbit and in low orbit can take over from each other.”
The other major operators, the American Intelsat and the Luxembourgish SES, do not have a combined GEO-LEO fleet. Intelsat tried to merge with OneWeb in 2017, but the deal fell through. SES bought the O3B constellation in 2016, but its satellites are in medium orbit (8,000 km), and not in low orbit, which does not solve the latency problem. Eutelsat would therefore be alone in the niche, a major asset in this hotly contested market.
Brittany Constellation
Another advantage: by swallowing OneWeb, Eutelsat would be in a strong position to offer Europe access to a telecommunications constellation in low orbit which it sorely lacks. Internal Market Commissioner Thierry Breton, in charge of space, has been defending since the end of 2020 a project for a sovereign European constellation, capable of responding to American, Canadian or Chinese projects. But the launch of this project, estimated at 6 billion euros, has proved sluggish: European industry is struggling to find a consensus on the characteristics of this tool, which is not expected before 2028 at best.
Eutelsat had already been proposing for several months in Brussels to make OneWeb, which has the advantage of already being in orbit, a sort of first version of this constellation. “If Eutelsat completes the takeover of OneWeb, this proposal will have even more weight, believes a space expert. The OneWeb constellation has big advantages: the first generation of satellites is already financed and in orbit, and it has telecom frequencies for low orbit, an asset that has become very rare.” One possible scenario would see Eutelsat dedicate part of OneWeb’s satellite fleet to EU needs, creating an embryonic European constellation without waiting for the end of the decade.
The closure of the operation still looks complex. To take control of OneWeb, Eutelsat, which already has 23% of the constellation’s capital, will have to negotiate with the group’s other major shareholders: the Indian telecom operator Bharti (30% of the capital), the British government (17, 6%), Japanese Softbank (17.6%) and Korean Hanwa (8.8%). The idea is that the new merged group will be 50% owned by Eutelsat shareholders, and 50% by those of OneWeb.
Unwelcome addiction to SpaceX
This scheme, attractive on paper, is not necessarily the easiest to implement. We will probably have to negotiate a right of veto for the British government. Discussions will also have to take place on the place of manufacture of future OneWeb satellites: the first generation was produced in Florida, and the second should be in the United Kingdom. Is this scheme still relevant in the event of a takeover by Eutelsat?
Last subject, of size: OneWeb, in full operation of acquisition by Eutelsat, will have to complete the putting into orbit of its constellation, with 220 satellites still to be launched. These machines were to be launched by Russian Soyuz rockets offered by Arianespace. Russia’s invasion of Ukraine at the end of February shattered this pattern, rendering the Soyuz unavailable. OneWeb had to swallow its pride and knock on the door of competitor SpaceX, the only player able to launch its satellites on a reasonable horizon. The next launches are announced for the end of the year, but some observers fear delays. In space as elsewhere, it is never very comfortable to depend on your main competitor.