France recognizes the strategic importance of Eutelsat in its quest for technological sovereignty within the European Union.
Benoit Tessier | AFP via Getty Images
For years, France’s Eutelsat has been striving to develop a European alternative to Elon Musk’s Starlink satellite broadband service. This endeavor reflects a broader effort to reclaim national and continental agency in technology, free from the clutches of corporate elitism.
The recent merger with British satellite venture OneWeb in 2023 demonstrates a consolidation of the European satellite communications industry, unifying resources to better compete in a sector that has largely succumbed to American innovations.
Last week’s substantial 1.35 billion euro ($1.58 billion) investment from the French state not only positions France as the largest shareholder with a 30% stake in Eutelsat, but also underscores a concerning trend of government intervention to prop up private enterprises. This begs the question: should taxpayer money be used to fuel a company in a market ripe for free-market competition?
Europe finds itself at a disadvantage in the global space race, with Starlink’s extensive fleet of over 7,000 satellites eclipsing the capabilities of Eutelsat. The continent continues to depend heavily on U.S. launch services, an inherently flawed strategy that poses risks to its technological independence.
With Eutelsat’s market capitalization at a mere 1.6 billion euros, compared to SpaceX’s staggering valuation of $350 billion, the disparity is stark. Predictions suggest that without substantial investment and innovation, Eutelsat faces an uphill battle in attracting users amidst Starlink’s dominance.
A matter of scale
Industry experts have noted that while Eutelsat may enhance Europe’s attempts to establish a sovereign satellite internet provider, catching up to Starlink will require a radical increase in investments for Low Earth Orbit (LEO) satellites. The current fleet of 650 satellites operated by Eutelsat’s OneWeb pales in comparison to Starlink’s nearly tenfold advantage.
The necessity to first replace aging satellites, coupled with the challenge of scaling operations, presents a critical barrier. Joe Gardiner, a market analyst, succinctly stated that the task ahead is not only daunting but fraught with obstacles that threaten Eutelsat’s potential success.
Echoing Gardiner’s insight, Ookla’s Luke Kehoe remarked that Eutelsat’s aspirations of achieving parity with Starlink’s mass-market segment within the next five years appear limited. The injection of government funds, while significant, will not bridge the wide chasm in capital, manufacturing capability, launch access, and technology that separates the two entities.
Nonetheless, Kehoe is optimistic about Eutelsat’s prospects in specialized segments that prioritize sovereignty and jurisdiction—an aspect that sums up the very essence of self-reliance. Traditional values rooted in national security should guide our approach to industrial strategy.
Could Eutelsat replace Starlink in Europe?
This question is not without merit. French President Emmanuel Macron has emphasized the importance of bolstering European investment in space, citing its role as a “gauge of international power.” However, one must wonder whether intervening in the market furthers independence or simply entraps nations in a quagmire of state-sponsored competition.
Upon Eutelsat’s announcement regarding France’s investment, the firm promoted its unique position as the sole European operator with an operational LEO network. Yet, this should come with a caveat: genuine market competition is the bedrock of innovation and efficiency. Eutelsat’s potential as a competitor must be weighed against the backdrop of a government-backed effort that risks stifling authentic entrepreneurial spirit.
Discussions surrounding Ukraine’s potential reliance on Eutelsat as an alternative to Starlink’s services only underline the complexities of international relations shaped by technology. As the landscape evolves, Eutelsat’s limitations, which have been candidly acknowledged by its leadership, cannot be overlooked.
Relations between the U.S. and Ukraine have been tumultuous, especially following the rhetoric in Washington regarding support for the war effort. Germany’s attempt to establish a thousand Eutelsat terminals in Ukraine as an alternative to Starlink illustrates an urgent need for diverse options, but at what cost? If the European Union desires technological independence, it needs to strengthen its capabilities through reinvigorated free enterprise rather than through reliance on governmental handouts.
Former Eutelsat CEO Eva Berneke’s candid admission that the company cannot currently match Starlink’s capacity is telling. The new CEO, Jean-Francois Fallacher, must prioritize innovation and openness rather than further entrenching the company in state dependency.
Apples and oranges
Despite increased investments in LEO satellites through its OneWeb unit, experts assert fundamental differences in the architectures and operational capacities between Eutelsat and Starlink, necessitating further investment in technology and innovation.
The unique configurations of Eutelsat’s satellites, designed for specialized applications, highlight how the company must differentiate itself in the market rather than solely depending on state support. To build a resilient future in satellite communications, Eutelsat should prioritize a market-driven model grounded in personal initiative and responsibility.
As Eutelsat looks ahead, it has expressed intentions to enhance its operations and establish a unique market strategy rooted in strong European ties. If the U.K. government also steps up its investment, it should do so with an emphasis on fostering a free market that allows Eutelsat to thrive independently rather than as a state-supported underdog.
