French satellite provider Eutelsat recently announced that it was in discussions with British colleague OneWeb for a partnership to create a “global champion” in broadband internet, competing with US services like Elon Musk’s Starlink.

By eliminating the need for antennas and other infrastructure, satellite broadband promises to provide service to the world’s most distant locations.

Additionally, it will provide internet to connected products, such as cars, and commercial aeroplanes. OneWeb has 428 low-orbiting satellites, compared to Starlink’s more than 2,000 small satellites that dominate the market and orbit just a few hundred kilometres above the Earth.

Through a partnership with telecom company Orange, Eutelsat already offers certain internet services. However, its network of 35 bigger satellites, which orbit hundreds of kilometres from Earth, is mainly used for TV and other communications.

If the partnership with OneWeb is approved, it will be the first of its type to combine satellites in lower and higher orbits, according to Eutelsat.

According to the French company, it will be “uniquely positioned” to take advantage of a market that it projects would be worth $16 billion by 2030. According to a statement from Eutelsat, the “possible all-share combine” would establish “a global leader in connectivity.”

The European businesses, however, face fierce rivalry. Musk is not the only billionaire in the IT industry with intentions to rule the market; Jeff Bezos, the founder of Amazon, recently declared his intention to deploy 3,200 satellites.

With Bezos reportedly investing $10 billion in his so-called Project Kuiper, money is flowing into the industry.Public entities are also attempting to participate.

By 2024, the European Union aims to deploy about 250 satellites, whereas China has a plan to build a network of 13,000 spacecraft dubbed Guowang.

The satellites, according to Thierry Breton, commissioner for the EU’s internal market, would assist close coverage gaps, provide redundancy in the event of cyberattacks on terrestrial networks, and provide secure government communications across Europe.

“Low orbit constellations are a market which could potentially become strategic for governments,” observed the analyst Romain Pierredon, working at the analyst firm AlphaValue. “The goal is not to become dependent upon anyone, thus Europe is potentially a big client for OneWeb”. He stated that national security concerns were becoming more prominent in a variety of industries, citing semiconductors as an example.

The French and British governments are also interested in the possible merger; the UK holds a share in OneWeb, while a state-owned French investment bank owns nearly 20% of Eutelsat.

According to the Financial Times in the United Kingdom, both governments will have board seats at the new corporation.

The deal would be a “logical next step in the successful partnership” according to the French company, which previously held 20% of OneWeb. However, the possible purchase faces various obstacles, including approval from Eutelsat shareholders and authorities. On the Paris stock market, Eutelsat’s shares fell 18%. The new partnership may unleash an optimistic prospect for the company.

Source: OneWeb Press Release; Newsrnd.