• French satellite operator Eutelsat counts the OneWeb low-earth orbit (LEO) constellation as part of its portfolio
• As sovereign considerations gain greater weight, Europe is looking to ensure it has a major satellite broadband player
• Eutelsat is raising €1.35bn to help fund OneWeb’s expansion in a deal that will see the French State increase its stake in Eutelsat to almost 30%

French satellite network operator Eutelsat is to raise €1.35bn from a new capital increase that will provide it with fresh funds for the expansion of its OneWeb low-earth orbit (LEO) constellation and give Europe a stronger rival to Starlink, Elon Musk’s LEO operation. 

The funds are set to be in place by the end of the year and to come from a range of investors. But what’s clear from the agreement is that the French government clearly believes that securing Eutelsat’s future and ability to grow and compete with rivals from other regions is absolutely critical to Europe and it’s underpinning that view with a large chunk of the fresh funding that will result in the French State increasing its stake in Eutelsat to 29.99%, making it the single biggest shareholder. The funding agreement is complex and still slightly fluid, as some additional investors may join over the coming months, but the salient details can be found in this press release.

What’s clear, though, is that Eutelsat and its investors understand that the satellite company needs the financial support to achieve greater scale and be ready to capitalise on the growing satellite service requirements of government bodies and the enterprise sector, which are OneWeb’s target markets. Right now, OneWeb is for sure a major player, with more than 600 LEO satellites in orbit and a pipeline of business, but its North American rival Starlink has 7,000 satellites in orbit and is racing to attract business from government, enterprise and consumer customers. And other rivals are set to join the fray, most notably Amazon’s Project Kuiper and, from China, SpaceSail’s Qianfan, which started launching its first LEO satellites into orbit last year, and the Chinese state-sponsored Guowang, which is reportedly in the early stages of building out its multifunctional constellation. 

Large-scale LEO constellations are expensive to plan, build and run – Eutelsat currently has a net debt pile of about €2.7bn – and come with many regulatory and licensing challenges, so there will likely be a limited number of players competing in the global mass market, noted Eutelsat. “Barriers to entry into LEO – in particular access to, and the requirement to share spectrum secured by Eutelsat – mean only a limited number of players will participate in the massive growth ahead, creating compelling conditions for value creation.”

And with years of experience in the geostationary (GEO) sector and a prime position in the LEO sector, Eutelsat, which recently appointed former senior Orange executive Jean-François Fallacher as its new CEO, is well placed to be one of the major global players as long as it can achieve and maintain the scale that’s required.      

Eutelsat didn’t reference Starlink (part of Elon Musk’s SpaceX company) or other rivals in its announcement about the fundraising, but it highlighted the importance of Europe having a significant presence in the satellite communications sector. 

“As the only European operator with a fully operational LEO network, Eutelsat is positioned to play a strategic role in supporting critical sectors, such as military communications, cyber-resilience and secure government connectivity, fully aligned with European Union and NATO objectives for strategic autonomy,” noted Eutelsat. It pointed to a 10-year framework agreement announced earlier this week with France’s Ministry of the Armed Forces as an example of the “strategic role of the LEO constellation in France’s model for sovereign defence and space communications.” 

And the strategy behind the capital raise is not just about Eutelsat’s commercial operations – it’s a key player also in Europe’s IRIS² (Infrastructure for Resilience, Interconnectivity and Security by Satellite) constellation, which will provide secure services to European Union member states via 290 low-earth orbit (LEO) and medium-earth orbit (MEO) satellites and which outlined its €10.6bn, 12-year deployment plan in December last year. 

Eutelsat noted: “With its role as the largest private investor in the European Union’s IRIS² programme, the public-private partnership aiming to build a multi-orbit constellation delivering secure communication services to the EU and its member states, Eutelsat confirms its status as a central player in assuring Europe’s space and connectivity sovereignty.” 

Eric Lombard, France’s minister for the economy, finance and industrial and digital sovereignty, stated: “The French State is proud to contribute to strengthening Eutelsat’s capital structure and support the company at a pivotal stage of its development. This transaction reflects our strong commitment towards a major player in satellite connectivity – a strategic sector at the heart of Europe’s digital sovereignty – while fostering remarkable potential for technological innovation and sustainable economic growth. Through this transaction, France reaffirms its determination to build, together with the company and its European partners, a competitive, resilient and sovereign space industry, particularly around the IRIS² programme, which is a key pillar of our strategic autonomy. We are convinced that the company’s solid fundamentals – its recognised expertise in geostationary orbit, its innovative solutions in low-earth orbit, its committed team and its ambitious vision – are the foundations for lasting success. Eutelsat is opening a new chapter in its history, and the state will be fully present to help write it alongside the company.”

So what is Eutelsat’s plan and what are its market opportunities? 

The company believes it has “a clear differentiation, being the only one exclusively focused on the B2B [business-to-business] and B2G [business-to-government] markets. While the global satellite connectivity market is expected to increase by 12% per annum between 2025 and 2029, the global LEO B2B connectivity market, valued at over $2.1bn in 2025, is expected to grow at a 28% CAGR [compound annual growth rate] through 2029 and multiply its current size fivefold over the next eight years, offering significant short- to long-term growth potential.”

In addition, OneWeb has “secured regulatory approvals in many addressable markets, developed its distribution network and improved its offer with consistent service levels, as evidenced by a backlog of €3.7bn revenues, mostly coming from connectivity. Going forward, Eutelsat leadership will build upon its operations improvements (for example, hosted payloads, additional deployment of satellite network portals), a differentiated go-to-market model (focused on B2B/B2G), a resilient GEO-LEO offering, and a strong European anchoring. Its priority spectrum rights grant Eutelsat a unique benefit in the exploitation of spectrum resources and coordination with other LEO players,” stated Eutelsat.

But all of that opportunity still needs to be turned into real business and it’s going to take some time. For the current full financial year (2024-25) that ends this month, Eutelsat, which currently generates about half of its revenues from video delivery services and the other half from connectivity services, expects to report revenues of around €1.22bn. By the fiscal year 2028-29, it expects its annual revenues to be in the range of €1.5bn to €1.7bn, “supported by the strong momentum of LEO revenues, which are significantly outperforming the market.”

Starlink, meanwhile, already has greater financial firepower and significant cashflow, according to satellite sector research firm Novaspace.

Eutelsat CEO Fallacher stated: “Eutelsat enters a new chapter, centered on the deployment of LEO, a major innovative and technological revolution for the satellite industry. Thanks to its differentiated GEO-LEO positioning and global coverage, Eutelsat is ready to become a central player in the development of the European sovereign space of tomorrow. I welcome the contemplated capital increase which will give Eutelsat the requisite financing to implement its strategic roadmap. I am grateful for the support of the French State and the ongoing commitment of our other anchor shareholders – Bharti, CMA CGM and FSP – and thank them for their confidence.”

- Ray Le Maistre, Editorial Director, TelecomTV