France is betting Eutelsat can become Europe's answer to Starlink — but experts aren't convinced

For years, France's Eutelsat has been trying to physique a European alternate to Elon Musk's Starlink outer broadband service.

The institution merged with British outer task OneWeb successful 2023, consolidating the region's outer communications manufacture successful an effort to drawback up to Starlink, which is owned by SpaceX.

Last week, the French authorities led a 1.35-billion-euro ($1.58 billion) concern successful Eutelsat, making it the company's biggest shareholder with a astir 30% stake.

Europe mostly lags down the U.S. successful the planetary abstraction race. Starlink's constellation of implicit 7,000 satellites dwarfs Eutelsat's. Meanwhile, Europe's motorboat capabilities are much constricted than the U.S. The portion inactive relies heavy connected America for definite motorboat services, which is simply a marketplace dominated by SpaceX.

Eutelsat presently has a marketplace capitalization of 1.6 cardinal euros, overmuch little than estimates for Starlink proprietor SpaceX's value, which was pegged astatine $350 billion successful a secondary stock merchantability past year. In 2020, analysts astatine Morgan Stanley said that they spot Starlink increasing to $80.9 cardinal successful their "base lawsuit valuation" for the firm.

Luke Kehoe, manufacture expert astatine web monitoring steadfast Ookla, said France's concern successful Eutelsat shows the state "is present treating Eutelsat little similar a commercialized telco and much similar a dual-use critical-infrastructure provider" and a "strategic asset" successful the European Union's propulsion for technological sovereignty.

However, gathering a European rival to Starlink volition beryllium nary mean feat.

Communications manufacture experts archer CNBC that, portion Eutelsat could boost Europe's efforts to make a sovereign outer net provider, challenging its U.S. rival Starlink would necessitate a important summation successful investments successful Low Earth Orbit (LEO) satellites.

Eutelsat's OneWeb limb operates a full of 650 LEO satellites, which is little than a tenth of Starlink's 7,600-strong planetary outer constellation.

"To connection greater capableness and coverage, [Eutelsat] needs to summation the fig of satellites successful space, a task made much hard owed to the information that galore of OneWeb's satellites are nearing the extremity of their lifespan and volition request to beryllium archetypal replaced earlier increasing the constellation's size," Joe Gardiner, probe expert astatine marketplace probe steadfast CCS Insight, told CNBC via email.

Ookla's Kehoe echoed this view. "Eutelsat's chances of achieving parity with Starlink successful the mass-market outer broadband conception wrong the adjacent 5 years stay limited, fixed SpaceX's unmatched planetary standard successful LEO infrastructure," helium said.

"Even with the latest injection of superior from the French state, Eutelsat continues to lag down Starlink successful respective cardinal areas, including capital, manufacturing throughput, motorboat access, spectrum and idiosyncratic terminals."

Nevertheless, helium thinks the institution is "well positioned to win successful European-sovereign, security-sensitive and endeavor segments that prioritise jurisdictional power and sovereignty implicit earthy constellation capacity." The endeavor conception refers to the marketplace for firm abstraction clients.

That's surely the hope. France's Emmanuel Macron has urged Europe to ramp up its concern successful space, saying past week that "space has successful immoderate mode go a gauge of planetary power."

When Eutelsat announced its concern from France past week, the steadfast stressed its relation arsenic "the lone European relation with a afloat operational LEO network" arsenic good arsenic the "strategic relation of the LEO constellation successful France's exemplary for sovereign defence and abstraction communications."

Earlier this year, Eutelsat was rumoured to beryllium successful the moving to regenerate Starlink successful Ukraine. For years, Starlink has offered Ukraine's subject its outer net services to assistance with the warfare effort amid Russia's ongoing invasion.

Relations betwixt the U.S. and Ukraine soured pursuing the predetermination of President Donald Trump and reports surfaced that U.S. negotiators had raised the anticipation of cutting Ukraine's entree to Starlink.

Germany acceptable up 1,000 Eutelsat terminals successful Ukraine successful April with the purpose of providing an alternate — alternatively than a replacement — for Starlink's 50,000 terminals successful the war-torn country.

Since then, U.S.-Ukraine tensions person somewhat cooled, and Starlink remains the superior outer broadband supplier to the Ukrainian military.

Eutelsat's erstwhile CEO Eva Berneke has herself admitted that the institution cannot yet lucifer Starlink's scale.

"If we were to instrumentality implicit the full connectivity capableness for Ukraine and each the citizens — we wouldn't beryllium capable to bash that. Let's conscionable beryllium precise honest," she said successful an April interrogation with Politico.

Berneke was replaced arsenic CEO successful May by Jean-Francois-Fallacher, a erstwhile enforcement of French telecoms elephantine Orange.

Meanwhile, adjacent though Eutelsat has been ramping up investments successful LEO outer with its OneWeb unit, experts accidental its method architectures and orbital designs are yet antithetic from Starlink's.

"The OneWeb constellation presently uses a bent-pipe architecture, which is not arsenic susceptible arsenic Starlink satellites; therefore, OneWeb volition besides request to put successful second-generation satellites," helium added.

The French firm's usage cases besides disagree to Starlink's. Eutelsat operates a constellation of geostationary orbit (GEO) arsenic good arsenic LEO satellites. GEO satellites orbit the world astatine a overmuch higher altitude than their LEO equivalents and tin typically screen much onshore with less satellites.

"Eutelsat's higher altitude satellites are leveraged for specialized usage cases, specified arsenic polar sum for companies and probe facilities successful distant regions similar Greenland and Alaska," said Joe Vaccaro, vice president and wide manager astatine Cisco's ThousandEyes web quality unit.

Looking ahead, Eutelsat said it plans to "build upon its cognition improvements" with a "differentiated go-to-market model" and "strong European anchoring." It besides noted that the U.K. authorities could besides summation its concern successful Eutelsat "in owed course."