UK and France team up to bolster Eutelsat rival to Starlink

Britain plans to invest €163.3 million ($190 million) in satellite operator Eutelsat, the company has announced, adding to a much bigger cash injection from France to help it compete with Elon Musk’s Starlink.

Eutelsat, which counts the French state as a major investor, is the world's second-largest operator of low Earth orbit (LEO) satellites, which provide high-speed internet and enable new applications in communication, Earth observation and disaster management.

Eutelsat has more than 600 satellites, following its 2023 merger with British firm OneWeb.

But it remains far smaller than the American heavyweight, which has 6,000 satellites lifted into orbit by Musk's comparatively cheap, reusable SpaceX rockets.

The additional funds bring the amount the satellite company has raised to €1.5 billion, it said on Thursday. The French government, Bharti Space, CMA CGM and Fonds Strategique de Participations announced in June that they would invest €1.35 billion in a deal to help the company build its fleet of satellites.

Europe is racing to build up sovereign capabilities in several key areas, including defence and satellite communications, after Russia's invasion of Ukraine and US President Donald Trump's "America First" policies.

The deal was agreed during French President Emmanuel Macron’s state visit to the UK, which ended on Thursday.

Mr Macron thanked London for the investment, in a post on X.

"Just like France, the United Kingdom considers Eutelsat a strategic player in space connectivity and wants to strengthen satellite sovereignty," the Elysee Palace said.

It added that Eutelsat's "commercial potential has been significantly boosted by the geopolitical context and the need for state independence".

The French state recently announced plans to invest €717 million in Eutelsat, which would raise its stake to just under 30 per cent, from 13 per cent, making it the company's largest shareholder.

The UK's investment will give it an almost 11 per cent stake in the company.

Eutelsat shares rose as much 8 per cent in Paris after the announcement.

The company's stock has gained 64 per cent this year, buoyed by France's financial commitment and investors betting on its satellites as the best alternative to Starlink.

"As our adversaries increasingly use space technologies to harm us, resilient satellite connectivity has become essential to our continent’s national security," British science and technology minister Peter Kyle said in a statement.

Mr Kyle also said the investment reflected Britain's commitment to the development of these technologies and maintaining an important stake in the global satellite communications sector.

Jean-Francois Fallacher, chief executive of Eutelsat, said: “In the current environment it is crucial that our countries continue to collaborate and support each other, including in space, which has become a key sovereign strategic asset.”

The deal could also open the door to Britain's involvement in the EU's Iris satellite constellation project, which has Eutelsat as one of its main contractors.

Britain became a shareholder in OneWeb in 2020 as part of a $1 billion bailout, before OneWeb merged with Eutelsat in 2023.

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