OneWeb and Eutelsat have signed a memorandum of understanding aimed at creating a mega multi-orbit satellite broadband provider.
Unlike competitor Starlink, which has thousands of satellites in low earth orbit (LEO), the combined company would operate satellites in both geostationary orbit (GEO) through Eutelsat’s 36-strong fleet and LEO – through OneWeb’s constellation , which currently includes 428 satellites .
Satellite locations have advantages and disadvantages: a GEO satellite will provide better coverage of a given region, while LEO satellites promise lower latency and are generally cheaper to build and launch, although more are needed. The combination of the two should, in theory, deliver a system that offers the best of both worlds, depending on the integration challenges and customer requirements.
How the deal will work, the transaction values OneWeb at $3.4 billion (implying a value of €12 per Eutelsat share), and Eutelsat shareholders and OneWeb shareholders would each own 50 percent of Eutelsat shares. In fact, Eutelsat eventually owns 100 percent of OneWeb (excluding the UK government’s stake).
The UK government’s stake is significant, as two years ago £500m (about US$600m) of UK taxpayer money was spent on OneWeb.
Eutelsat itself has also invested heavily in OneWeb, making an initial investment of $550 million in April 2021 and spending another $165 million in October last year, increasing its stake from 17.6 percent to 22.9 percent [PDF].
The UK Department for Business, Energy and Industrial Strategy said: “The UK Government will retain a special interest and exclusive rights in OneWeb – securing the future of the business at the heart of the combined group’s global LEO business, national security controls over the network , and preferential rights over domestic industrial opportunities.”
The last point is significant. As well as national security needs, the UK is said to be the ‘preferred’ location for launches as well as sourcing for commercial manufacturing. Unfortunately for British companies, it also means the country will compete with other states for OneWeb work “as is common with major European space projects”. observed dr Bleddyn Bowen, Associate Professor of International Relations at the University of Leicester.
The merger, which is expected to be complete in the first half of 2023 (subject to regulatory approvals and Eutelsat shareholder approval), is expected to generate combined revenues of €1.2 billion (US$1.22 billion). While OneWeb continues to operate the LEO business and retain its headquarters in the UK, France-based Eutelsat will continue to be listed on Euronext Paris and apply for listing on the London Stock Exchange.
And who knows, by the time it’s completed in 2023, OneWeb may finally have more of its proposed constellation on the way. The last batch of satellites never left Baikonur after Russia’s invasion of Ukraine, and OneWeb has since signed on several alternative launch operators, including SpaceX, to launch the rest of its satellites.
This requires SpaceX to find time between launches to build the Starlink satellite constellation. The enterprise another 53 of the satellites were put into orbit on July 24, SpaceX’s sixth mission of the month. ®
https://www.theregister.com/2022/07/26/eutelsat_oneweb/ Eutelsat and OneWeb in multi-orbit merger • The Register