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Britain Joins France in €1.5 Billion Capital Boost for Starlink Rival Eutelsat

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Britain will invest €163.3 million ($191 million) in satellite operator Eutelsat, adding to a larger funding injection from France designed to help the company compete with SpaceX’s Starlink, Eutelsat announced on Thursday. This joint recapitalization effort highlights Europe’s drive to enhance its sovereign capabilities in key areas like satellite communications and defense, particularly in light of Russia’s invasion of Ukraine and the U.S.’s “America First” policies.

During a three-day state visit to Britain, French President Emmanuel Macron publicly thanked London for the investment in a post on X. Following the announcement, Eutelsat shares jumped as much as 10% in early trading on the Paris stock exchange.

France’s state shareholding agency plans to inject €750 million later this year, becoming Eutelsat’s largest shareholder with a 29.65% stake. Meanwhile, Britain’s new investment will allow it to maintain its 10.89% stake, preventing dilution from France’s recapitalization, and preserve influence in European space policy post-Brexit.

Britain will also keep its “golden share,” which grants veto powers over OneWeb, the London-based subsidiary of Eutelsat, according to a source familiar with the matter. The total recapitalization now reaches €1.5 billion following the UK’s participation.

Peter Kyle, the British science and technology minister, emphasized the importance of resilient satellite connectivity for European national security in an increasingly contested space environment. He also stated that the investment demonstrates the UK’s commitment to developing these technologies and maintaining a significant position in the global satellite communications market.

This deal could pave the way for Britain’s involvement in the EU’s IRIS² satellite constellation project, for which Eutelsat is a key contractor, according to French newspaper Les Echos, which first reported on the UK’s investment.

Britain initially became a shareholder in OneWeb in 2020 through a $1 billion bailout, before OneWeb merged with Eutelsat in 2023. Eutelsat currently manages 34 geostationary satellites and over 600 low Earth orbit satellites, making it the world’s second-largest constellation after Starlink.

Eutelsat’s stock has surged 64% this year, boosted by France’s financial backing and investor confidence in its satellites as a viable alternative to Starlink.

Eutelsat Competes for Secure Satellite Telecoms Contract in Italy

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Eutelsat, a Franco-British satellite operator, is reportedly in discussions with the Italian government to provide secure satellite communication systems, a move that places it in direct competition with Elon Musk’s Starlink. The Italian government is seeking to ensure encrypted communications between officials, diplomats, and defense personnel working in high-risk areas. Sources close to the matter confirmed that Eutelsat, alongside Starlink, is being considered for the contract, which is critical to Italy’s national security.

The involvement of Eutelsat has not been previously disclosed, highlighting Europe’s desire to establish alternatives to Starlink, which currently dominates the satellite communication sector. This interest in European alternatives comes amid rising geopolitical tensions, particularly regarding the war in Ukraine, where Starlink’s role has become more contentious.

Eutelsat, which merged with OneWeb in 2023, operates a constellation of around 650 low Earth orbit (LEO) satellites. While its satellite network is smaller than Starlink’s 6,700 active satellites, Eutelsat’s shares have surged recently due to ongoing discussions with the European Union regarding internet access for Ukraine.

The company has confirmed its regular engagement with European governments to provide secure satellite communication services. However, Eutelsat declined to comment specifically on its talks with Italy, citing confidentiality.

The Italian government has expressed concerns about relying on foreign companies for sensitive national security contracts. Prime Minister Giorgia Meloni’s right-wing government has faced criticism for considering Starlink, especially given its ties to Elon Musk, who is also a close ally of U.S. President Donald Trump. While no contract has been signed with Starlink, Italy is considering alternatives, including developing its own low-orbit satellites. However, progress on this front has been slow, with delays in the EU’s IRIS² satellite project.

Reports suggest that Italy may consider a deal with Starlink worth 1.5 billion euros ($1.61 billion) over five years, although no agreement has been finalized.

Could Eutelsat Replace Starlink for Ukraine’s Satellite Internet Needs?

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As speculation grows about Ukraine potentially losing access to Elon Musk’s Starlink satellite internet, a critical tool for military communications during the ongoing war with Russia, attention has turned to Eutelsat, a European satellite provider, as a potential alternative. The Franco-British company, which recently merged with Britain’s OneWeb, has reportedly been in talks with the European Union to provide additional services to Ukraine. This follows concerns over the U.S. possibly using Starlink access as leverage in diplomatic discussions with Kyiv regarding critical minerals.

Here’s a breakdown of how Eutelsat could step in to support Ukraine’s communication needs.

How Crucial is Starlink to Ukraine?

Starlink’s satellite internet system has become indispensable for Ukraine, especially after its fixed-line and mobile networks were severely damaged by Russian bombings since the invasion began in February 2022. The system allows users to access the internet via a small satellite dish that connects to a constellation of satellites orbiting overhead.

While Starlink’s internet services are also available to civilians, the primary users are Ukraine’s military forces, which rely heavily on Starlink for communication amid constant jamming and interception of signals. The system is vital for battlefield command and control, and Ukraine has also used Starlink to guide attack drones, though SpaceX restricted this use two years ago. Initially funded by SpaceX, the U.S. government later took over the provision of Starlink to Ukraine. Recently, Poland confirmed it had been covering Ukraine’s subscription fees and would continue to do so.

How Does Eutelsat Compare to Starlink?

Eutelsat has already been providing support for government and institutional communications in Ukraine and has stated it can offer alternatives for certain government and defense applications. The company controls a global satellite network after merging with OneWeb in 2023, making it one of the few firms, along with Starlink, to offer global coverage via Low Earth Orbit (LEO) satellites.

While Eutelsat’s fleet consists of around 630 LEO satellites, compared to Starlink’s more than 7,000, it still offers the same capabilities within Europe, according to the company. Eutelsat provides speeds of up to 150 Mbps, slightly lower than Starlink’s promise of 200 Mbps. However, Eutelsat’s OneWeb terminals are significantly more expensive, with costs up to $10,000 per terminal plus monthly subscriptions. In contrast, Starlink charges Ukrainian users a one-time payment of $589 for the terminal, with monthly fees ranging from $95 to $440, depending on usage.

Despite this, the question remains whether any donor countries or organizations would be willing to fund the high cost of OneWeb subscriptions for Ukraine. France and the UK, which hold a combined 24.8% stake in Eutelsat, are actively involved in diplomatic efforts surrounding a peace deal with the U.S.

Are There Any Other Alternatives?

While global competition for Starlink is growing, it remains limited. Luxembourg-based SES provides satellite services to NATO defense forces through its medium Earth orbit O3b mPOWER constellation, but it focuses primarily on corporate customers and governments. SES’s services are not consumer-friendly and do not cater directly to end-users.

Additionally, some European initiatives like IRIS² and GOVSATCOM, which Ukraine is interested in, may take years before they are fully operational, leaving a gap in immediate satellite communication support for the country.