French satellite operator Eutelsat has confirmed plans to merge with British low Earth orbit (LEO) satellite innovator OneWeb, creating a combined company that will operate both geostationary (GEO) and LEO constellations.
Eutelsat currently manages 36 GEO satellites, the first of which launched in 2000. GEO satellites fly at very high altitudes and provide wide geographic coverage, but they are limited by higher latency and lower speeds compared with LEO systems.
LEO satellites—like those deployed by OneWeb, SpaceX and Telesat—fly much closer to Earth. They require larger constellations to achieve continuous coverage, but they deliver significantly lower latency and higher throughput, enabling applications that GEO systems struggle to support.
OneWeb is widely regarded as a pioneer in commercial LEO services and has launched 428 of the 648 satellites planned for its initial constellation. A planned launch of 36 satellites in March 2022 was cancelled after Russia’s Roscosmos declined to proceed, a decision widely linked to geopolitical tensions following Russia’s invasion of Ukraine. SpaceX has since been contracted to launch OneWeb satellites later in the year.
OneWeb’s ownership includes a significant UK government stake. In 2020 the UK government and Bharti Global invested $1 billion in OneWeb, and the company subsequently received $400 million from SoftBank and Hughes Network Systems in January 2021. In April 2021, Eutelsat acquired a 24 percent stake in OneWeb for $550 million, and Bharti Global contributed a further $500 million in June 2021.
Encouraged by its initial investment, Eutelsat now plans to deepen its commitment. In a press statement, Eutelsat said that OneWeb is one of only two global LEO networks and has shown strong momentum, with full service expected to be deployed in 2023. Under the proposed terms, shareholders of Eutelsat and OneWeb would each hold 50% of the combined group’s shares.
The merged company would become the first multi-orbit satellite operator to offer integrated GEO and LEO services. That combination is intended to create a complementary offering: GEO capacity for wide-area broadcast and fixed services, paired with LEO capacity for low-latency, high-throughput applications. Together, the companies aim to target the fast-growing satellite connectivity market, which industry forecasts estimate could approach approximately $16 billion by 2030.
UK Government statement on the merger
The UK Government described the merger as positive for taxpayers, noting its prior $500 million investment in OneWeb. The government said the combined business would be well positioned to compete globally while remaining on a solid financial footing. It confirmed it would retain a special share and exclusive rights over OneWeb to protect national interests.
Key protections the UK Government will keep include:
- A range of national security rights, including controls over security standards for the OneWeb network and the network’s use for national security purposes.
- The UK being the preferred location for future OneWeb launches.
- Preference for UK-based suppliers for future commercial procurement and manufacturing opportunities.
OneWeb will continue to trade under its existing name and will operate the LEO business within the combined group. The company’s headquarters will remain in the UK, ensuring continuity of its operations and the protections described by the government.
(Image Credit: OneWeb)
Related: OneWeb to provide LEO satellite connectivity services across BT Group
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