OneWeb and Eutelsat to merge and create 'global player' in satellite communications

(Image credit: Shutterstock / Andrey Armyagov)

Rival satellite firms OneWeb and Eutelsat have announced plans to merge, hoping their combined resources will allow them to better compete with rivals like Elon Musk’s SpaceX and Amazon’s Project Kuiper.

OneWeb, which is part-owned by the UK government, is building a constellation of 650 Low Earth Orbit (LEO) to deliver connectivity to some of the most remote parts of the world, transforming consumer services, in-flight Wi-Fi, and industrial applications.

Meanwhile, France-based Eutelsat operates 30 Geostationary Orbit (GEO) satellites used to power services like television.

Satellite connectivity 

The combined entity believes that by pooling its financial and technological resources, it can create hybrid LEO/GEO services, invest in new opportunities, and generate significant cost savings.

“Our initial investment in OneWeb was underpinned by our strong belief that the future growth in connectivity will be driven by both GEO and LEO capacity,” said Eva Berneke, Eutelsat CEO. “We are now moving to the next level, with a full combination that will ensure the potential of the GEO/LEO integration is fully realized, supported by compelling financial, strategic, and industrial logic.

“This ground-breaking combination will create a powerful global player with the financial strength and technical expertise to accelerate both OneWeb’s commercial deployment, and Eutelsat’s pivot to connectivity.”

OneWeb faced bankruptcy in 2020 before it was rescued through a takeover by Indian telco Bharti Airtel and the Department for Business, Energy, and Industrial Strategy. The government now owns a third of the company after investing £400 million. Since then, it has received additional investment from South Korean firm Hanwha, bringing its funding total to $2.7 billion since its inception.

 “Just 20 months ago, OneWeb resumed its mission to connect the unconnected and remove the barriers to connectivity that hold back many of the world’s underserved economies and communities,” said Neil Masterson, OneWeb CEO.  

“Since then, we have turned this vision into reality and become the second largest low Earth orbit satellite operator in the world. Today’s announcement is another bold step in OneWeb’s remarkable journey.”

The proposed merger would create a complex cast of shareholders to the table, with both the French and Chinese governments holding stakes in Eutelsat. Any deal is subject to shareholder approval and national security clearances, but the UK government says the merger is positive news – especially since OneWeb’s headquartes would remain in Britain.

“The UK government will now have a significant stake in what will become a single, powerful, global space company, working on the sound financial footing needed to make the most of the technological advantages it has to compete in the highly-competitive global satellite industry, against companies around the world,” it said in a statement.

“The UK government will retain the special share and its exclusive rights over OneWeb – securing the company’s future at the centre of the combined group’s global LEO business, national security controls over the network, and first-preference rights over domestic industrial opportunities.”

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.