The economy today
Eutelsat-OneWeb: the future satellite world champion?
Audio 03:53
The head office of the French company Eutelsat, in Issy-les-Moulineaux in 2021. © GONZALO FUENTES / REUTERS
By: Dominique Baillard Follow
3 mins
The French Eutelsat, the world's third largest satellite operator, dreams of merging with the Indo-British OneWeb.
A memorandum of understanding has been signed, confirmed Eutelsat.
The challenge: low-orbit internet coverage.
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This new space eldorado is today dominated by the American tech giants.
Especially by a giant: Elon Musk, the one who dynamited the space industry.
First with its SpaceX rocket capable of returning to Earth, and now with Starlink, its constellation of satellites a few hundred kilometers from Earth.
Half are already deployed and they offer a much faster internet connection than that of geostationary satellites installed 36,000 km from our planet.
It is a must for online gaming enthusiasts but also for the financial markets where orders are placed at lightning speed.
Or for all regions poorly served by terrestrial or submarine networks, whether in remote areas or under-equipped continents.
Ukraine, for example, cut off from the terrestrial network since the Russian offensive, is now connected thanks to Starlink.
Fierce competition in the low-orbit satellite niche
The promise of these constellations is high-speed spatial internet.
These low-orbit myriads appear today as the best technological solution to meet the needs of future heavy internet consumers, whether on land, in the desert or at sea. Fleets of connected cars, boats and of course the armies will be the first customers.
By 2030, 10% of internet traffic will go through this channel, estimates an expert.
A $16 billion market according to Eutelsat.
Elon Musk is talking about a turnover of around 50 billion dollars in the long term.
Both private companies and governments, especially China, are rushing into this buoyant but narrow niche, because low orbits are by definition of limited size, so first come will be first served.
OneWeb is Starlink's most serious competitor, not least because it has already deployed two-thirds of its space fleet, a still chaotic adventure.
The company came close to filing for bankruptcy during the Covid.
It survived thanks to a team formed by the British government and the Indian group Barthi, which became the largest shareholder.
Eutelsat is the second.
The marriage with the world's third largest operator would make the new entity the first multi-orbit satellite operator.
The new company could be the tool at the service of all of Europe, a hypothesis toyed with by the French authorities but far from obvious, because Europe has its own project and because the adhesion of the shareholders of OneWeb n is not won, Brexit obliges.
Finally, the most critical observers point out that OneWeb technology is already outdated.
On the stock market, Eutelsat's share lost 17%
For the French group now appreciated by investors as a safe bet in the CAC 40, to embark on this adventure is to bet on the future because this new technology is expensive and subject to unpredictable hazards: congestion low orbits could encourage collisions and therefore multiply the costs.
Eutelsat will leave its comfort zone, hence the reserves of the stock market.
► In brief
The profits of Wallmart, the American retail giant, will plummet this year.
The group warned of this upcoming decline in a profit warning.
Because of inflation, his customers are concentrating on basic necessities and the distributor has to sell off his other products to sell off his stocks.
Its profits could fall this year by 11 to 13%.
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