Britain to Invest $191M in Starlink Rival, Eutelsat as Battle for Satellite Communication Heats Up

The UK is set to invest $191 million in Europe’s satellite operator Eutelsat. According to Reuters, Britain’s investment in Eutelsat will boost the financing made by France, which has already made a bigger cash injection to enable the company to compete with Elon Musk’s Starlink.

Focus on Sovereign Capacity

Europe is focused on building its sovereign capabilities in different areas, including satellite and defence communications. Last month, French President Emmanuel Macron encouraged EU countries and enterprises to invest in the French satellite firm as a matter of European sovereignty.

The region is taking this step following the “America First Policy” advanced by US President Donald Trump and the invasion of Ukraine by Russia. Eutelsat is smaller than Starlink. However, as the only player with a major operational low-orbit constellation, the company has captured the interest of European governments that are now eager to leverage non-US alternatives.

“Eutelsat is the only non-American and non-Chinese player with these low-earth orbit constellations and such a wide range of services. It’s a matter of sovereignty, and we hope that all French industrial financial partners will also subscribe and we also want to mobilise many other European and international partners,” President Macron said during the Paris Air Show last month.

President Macron is on a state visit to the UK. Britain and France commenced discussions about the participation of the UK in Eutelsat’s rights issue in June this year.

A Strategic Player

A statement from the Elysee Palace termed the investment by the UK as strategic and critical in strengthening satellite sovereignty.

“Just like France, the United Kingdom considers Eutelsat a strategic player in space connectivity and wants to strengthen satellite sovereignty. Commercial potential has been significantly boosted by the geopolitical context and the need for state independence,” The statement read in part.
President Macron appreciated the investment from Britain in a social media post.

“Thanks to our British friends as they continue to follow us on the Eutelsat adventure! We’re over the moon to keep going with you. Together we go further!,” President Macron said in a post on X.

Last month, Eutelsat secured €1.35 Billion in funding from the French government to support the debt-laden company. This investment, which will be made by the end of this year, will make the French government the largest shareholder in Eutelsat. As a part of the 2025 Eutelsat recapitalization effort, the French state agency will invest €717 million, boosting its stake in the satellite operator to 29.99%.

Britain’s Stake

Britain’s investment in Eutelsat will enable the country to retain its 10.9% stake in the company. The UK will also maintain its golden share that gives it specific veto powers of the London-based Eutelsat subsidiary, OneWeb.

Britain has held a stake in OneWeb since 2020. Its stake in the subsidiary is part of a $ 1 billion bailout that it made alongside Bharti Space way before Eutelsat and OneWeb merged in 2023. Currently, Eutelsat controls 34 geostationary satellites and more than 600 low Earth orbit satellites. This makes it the second largest constellation in the world after Starlink.

Musk’s SpaceX has disrupted satellite-based communication through its rapidly growing low-Earth orbit constellation. Currently, Starlink has more than 6 million users globally.

Financial commitments from the French government and other investors that are betting in Eutelsat’s satellites as the most viable alternative to Starlink have pushed the company’s share prices up by 63% this year. Last month alone, Eutelsat stocks gained 27.5%.

But even with rising investor confidence, analysts are still wary of Eutelsat’s prospects. With the recent capital increase, the company looks to reduce its debt level three times its annual annual earnings, down from four times.