OneWeb and Eutelsat collab to compete against SpaceX

Updated on July 28, 2022 12:15 PM by Andrew Koschiev

Bharti Group announced signing MoU

Bharti Group-backed OneWeb and French satellite operator, Eutelsat Communications (ETL), announced the signing of a Memorandum of Understanding (MoU). Bharti Group addresses the significant connectivity market opportunity fueled by customers' growing needs in business-to-business (B2B) and business-to-cons.

Market demand increases the value

Over the following ten years, both market categories are expected to increase by three and five times, reaching a combined value of $16 billion by 2030. Combining both businesses in an all-share transaction aims to establish a dominant worldwide leader in connectivity, according to a joint announcement from the two firms.

OneWeb's constellation of 648 Low Earth Space (LEO) satellites, of which 428 are already in orbit, and Eutelsat's fleet of 36 GEO satellites would be combined. Together, the two businesses compete with Amazon's Project Kuiper and billionaire Elon Musk's SpaceX Starlink. Eutelsat to own 100% of OneWeb (excluding the "Special Share" of the UK government) at completion. They are to compete with Elon's SpaceX.

The deal would be set up as an exchange of existing OneWeb shares held by its shareholders for new shares issued by Eutelsat. The alliance is all set to compete with SpaceX.

The potential deal would build on the growing partnership between Eutelsat and OneWeb, which began with Eutelsat's April 2021 acquisition of a stake in the company and their March 2018 announcement of a global distribution agreement. Their recent exclusive commercial partnership focuses primarily on the European and international cruise markets. This partnership is a big alliance to compete with Elon Musk's SpaceX.

Budgeting of OneWeb and Eutelsat

According to the purchase, OneWeb is worth $3.4 billion, which translates to €12 for each Eutelsat share. The partnership together will challenge SpaceX. After four years, the firms project average annual revenue synergies of €150 million, with hybrid GEO/LEO products offering clients a premium service and raising the fill rate.

OneWeb and Eutelsat working together is a novel GEO/LEO combo and a significant advancement in that area. The duo will challenge the biggest SpaceX of Elon Musk. "The encouraging early results of our service combined with our robust pipeline indicate an exciting opportunity in the fast-growing satellite connection category, especially for clients needing a high speed, low latency experience.

"Bharti, as the principal shareholder of OneWeb, together with other significant shareholders, is looking forward to playing a meaningful role in delivering extended connectivity," he continued. This alliance will hasten OneWeb's fleet's commercialization while improving Eutelsat's growth profile's allure.

Together is all set to compete against SpaceX. The fact that both parties' key shareholders have such strong backing is evidence of this combination's enormous possibilities and the value generated for all stakeholders. For our sector, this is unquestionably a game-changer, said Dominique D'Hinnin, chairman of Eutelsat. It will challenge the SpaceX of Elon Musk.