OneWeb and Eutelsat sign letter of intent to merge

Satellite companies OneWeb and Eutelsat have signed a letter of intent to merge into one company in the future. In this way, the European companies hope to become a satellite internet provider that can provide internet via both low and high Earth orbits.

In practice, the takeover means that the French Eutelsat will issue new shares and the British will take over OneWeb entirely from the existing shareholders. Eutelsat already owned 23 percent of OneWeb’s shares. The British government was also a major shareholder of the company. According to a press release the new shareholders of Eutelsat and Oneweb of both companies will retain fifty percent of the shares. Eutelsat connects its 36 satellites to OneWeb’s 428 active satellites.

With the new joint venture, the two companies hope to become a major player in the global satellite internet market. Together, the companies hold an important asset: OneWeb’s satellites fly in a low Earth orbit about 400 kilometers from Earth, but those of Eutelsat fly in geostationary orbit at almost 36,000 kilometers. Low-level satellites have less latency, but are generally smaller and less powerful. Higher satellites are larger and more powerful, but in addition to more latency, they also have a poorer range at lower latitudes.

In the near future, the companies want to start working on a platform that offers the services of both satellites and on terminals that can establish connections with both satellites. The companies expect to generate a turnover of 150 million after four years. By 2030, they should have a combined total value of about 16 billion euros, the companies think.

Neither OneWeb nor Eutelsat mention the name Starlink anywhere in their announcement, but it’s hard to separate the merger from that. SpaceX has already launched 2,700 Starlink satellites into space and is already providing its service commercially in many places. OneWeb also has satellites and active users, but the company went bankrupt in 2020. After a restart, the British government became an important shareholder, but they wanted the satellites to be used for navigation purposes, for example. By collaborating with Eutelsat, the companies can also compete commercially against Starlink.