Competition will be tougher for Starlink with the merger of OneWeb and Eutelsat
There is movement in the satellite communications sector. We know that companies OneWeb and Eutelsat plan to mergewith the aim of becoming a serious competitor for SpaceX and its Starlink constellation.
This proposed merger is still awaiting the opinion of regulators and Eutelsat shareholders, but if it takes place, it will be completed by mid 2023. OneWeb will be worth just over €3.355 billion during the transaction, and it is known that the shareholders of OneWeb and those of Eutelsat will each own half of the resulting company.
Currently, Eutelsat owns 36 geostationary satellites in orbit. After the merger, these satellites will be combined with OneWeb’s fleet of satellites that are in low orbit. The latter allow access to the Internet and are already among 428 in orbit. OneWeb plans to send 648 elements in total for its first generation network.
A difficult path for OneWeb
OneWeb had the ambition to become a strong adversary for projects SpaceX’s Starlink and Kuiper from Amazon. However, the company placed itself under the protection of the chapter 11 of the bankruptcy law in March 2020 while looking for a buyer. the UK governmentas well as Bharti Global by Sunil Bharti Mittal each paid 493.4 million euros to acquire 45% of the company. It also managed to obtain additional funds in 2021 to be able to launch hundreds of satellites.
After the merger, the UK government is expected to retain a “special share” in OneWeb, as well as exclusive rights to the company. This will allow the government to have its say on national security issues or on certain decisions such as the location of OneWeb’s headquarters.
The effects of the war in Ukraine
OneWeb was also harshly affected by Russia’s invasion of Ukraine. Indeed, the sanctions imposed by the United Kingdom against Russia have pushed the latter to block the launch of the company’s satellites. Russia asked the British government to sell its shares in the company and wanted to ensure that the satellites would not be used for military purposes.
Eventually, OneWeb decided to turn to its direct competitor, SpaceX, to launch the latest satellites in its first-generation network. These satellites were originally to be launched by Russian Soyuz rockets.
The future will tell us if this alliance will succeed in standing up to the American giant.