Can Eutelsat become the European alternative to Starlink?

For years, France Eutelsat He has been trying to build a European alternative at the Starlink Starlink broadband service of Elon Musk.

The company merged with British Satellite Venture Oneweb in 2023, consolidating the region’s satellite communications industry in an effort to reach Starlink, owned by Spacex.

Last week, the French state directed an investment of 1.35 billion euros ($ 1.58 billion) in Eutelsat, which makes it the company’s largest shareholder with a participation of approximately 30%.

Europe is largely behind the United States in the global space race. The Starlink constellation of more than 7,000 dwarf dwarm satellites Etelsat. Meanwhile, Europe launch capabilities are more limited than the US. The region still depends largely on the United States for certain launch services, which is a market dominated by Spacex.

Eutelsat currently has a market capitalization of 1.6 billion euros, much lower than estimates for the value of Starlink Spacex owner, which was linked to $ 350 billion in a sale of secondary shares last year. In 2020, Morgan Stanley analysts said that Starlink grows to $ 80.9 billion in their “base case assessment” for the company.

Luke Kehoe, an analyst analyst for the Ookla Red monitoring firm, said that France’s investment in Eutelsat shows that the country “is now treating Eutelsat less as a commercial telecommunity and more as a double -use critical infrastructure provider” and a “strategic asset” in the impulse of the European Union for technological sovereignty.

However, building a European competitor for Starlink will not be a feat.

Experts in the communications industry tell CNBC that, although Eutelsat could promote Europe’s efforts to create a sovereign satellite Internet supplier, challenge its United States rival link would require a significant increase in satellites in low terrestrial orbit satellites (Leo).

The OneWeb arm of Eutelsat operates a total of 650 Leo satellites, which is less than a tenth of the global satellite constellation of 7,600 people from Starlink.

“To offer greater capacity and coverage, [Eutelsat] You need to increase the number of satellites in space, a more difficult task due to the fact that many of the OneWeb satellites are reaching the end of their useful life and must be replaced first before increasing the size of the constellation, “said Joe Gardiner, research analyst at the CCS INSIGHT market research firm, CNBC by email.

Kehoe from Ookla echoed this view. “Eutelsat’s possibilities to achieve parity with Starlink in the massive mass market broadband segment in the next five years remain limited, given the unique global scale of Spacex in the Leo infrastructure,” he said.

“Even with the last capital injection of the French state, Eutelsat continues to lag behind Starlink in several key areas, including capital, manufacturing performance, launch access, spectrum and user terminals.”

However, he believes that the company is “well positioned to succeed in European segments about security, safety sensitive and companies that prioritize jurisdictional control and sovereignty over the capacity for raw constellation.” The business segment refers to the market for corporate space clients.

That is undoubtedly hope. Emmanuel Macron de France has urged Europe to increase its investment in space, saying last week that “space has somehow become an international power meter.”

When Eutelsat announced its France investment last week, the firm emphasized its role as “the only European operator with a totally operational Leo network”, as well as the “strategic role of Leo’s constellation in the France model for sovereign defense and space communications.”

Earlier this year, it was rumored that Eutelsat was in the race to replace Starlink in Ukraine. For years, Starlink has offered Ukraine military its satellite internet services to help with the war effort in the continuous invasion of Russia.

Relationships between the United States and Ukraine cracked after the election of President Donald Trump and reports that US negotiators had increased the possibility of reducing Ukraine access to Starlink.

Germany established 1,000 Eutelsat terminals in Ukraine in April with the aim of providing an alternative, instead of a replacement, for the 50,000 Starlink terminals in the country devastated by war.

Since then, Us-Ukraine tensions have cooled a bit, and Starlink remains the main satellite broadband supplier for the Ukrainian army.

The former Eutelsat CEO, Eva Berneke, admitted that the company still cannot match the Starlink scale.

“If we assumed all the connectivity capacity for Ukraine and all citizens, we could not do it. Let’s be very honest,” he said in an April interview with Politicus.

Berneke was replaced as CEO in May by Jean-Francois-Faller, a former executive of the French telecommunications giant Orange.

Meanwhile, although Eutelsat has been increasing investments in Satellite Leo with its OneWeb unit, experts say that its technical architectures and orbital designs are finally different from Starlink.

“The Oneweb constellation currently uses a folded pipe architecture, which is not as capable as Starlink satellites; therefore, Oneweb will also need to invest in second generation satellites,” he added.

The cases of use of the French firm also differ from those of Starlink. Eutelsat operates a constellation of geostationary orbit (GEO), as well as Leo satellites. Geographical satellites orbit the Earth to an altitude much higher than their Leo equivalents and can generally cover more land with less satellites.

“The highest altitude altitude satellites in Etelsat are used for specialized use cases, such as polar coverage for research companies and facilities in remote regions such as Greenland and Alaska,” said Joe Vaccaro, vice president and general manager of Cisco Intelligence unit of the Milheyes network.

Looking towards the future, Eutelsat said he plans “to build on his operational improvements” with a “differentiated market” and “strong European anchor.” He also pointed out that the United Kingdom government could also increase its investment in Eutelsat “in due time.”