French satellite operator Eutelsat said on Monday it was in talks with British counterpart OneWeb to create a “global champion” in broadband internet to rival US operators like Elon Musk’s Starlink.
Satellite broadband promises to cover the most remote areas on earth, providing connectivity in airplanes and products like connected cars.
Starlink leads the market with more than 2,000 tiny satellites in Low Earth Orbit (LEO), just a few hundred kilometers above the Earth.
Eutelsat already offers some internet services through a deal with telecom company Orange, using its network of 35 larger satellites operating thousands of kilometers from Earth in geostationary orbit (GEO), more commonly used for television and other communications.
But Eutelsat said its link with OneWeb, if it goes through, would be the first of its kind allying GEO and LEO satellites — OneWeb has 428 in orbit.
The French company said it was “uniquely positioned” to enter a market it expects to be worth $16 billion by 2030.
The “potential all-share combination” would “create a world-leading connectivity provider,” Eutelsat said in a statement.
– “Logical next step” –
However, European companies face stiff competition.
Musk isn’t the only tech billionaire with plans to dominate the market — Amazon founder Jeff Bezos recently announced that he intends to launch around 3,200 satellites.
Money is flowing into the sector, Bezos has apparently pledged $10 billion for his so-called Project Kuiper.
Public institutions also want to take part in the campaign.
The European Union plans to deploy about 250 satellites by 2024, and China plans to launch 13,000 of its own.
The UK government has a stake in OneWeb.
Eutelsat already holds 23 percent of OneWeb shares and the transaction would be a “logical next step in the successful partnership,” said the French company.
However, the potential deal must clear several potential hurdles, including the need to be approved by Eutelsat shareholders and regulators.
“There is no guarantee that these talks will result in an agreement,” the French company said.
Eutelsat shares fell more than 17 percent in early trading on the Paris Stock Exchange.
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