EU questions Eutelsat for taking stake in OneWeb

Eutelsat has jeopardised its involvement in a new EU space-based internet service by investing alongside the UK government in the satellite broadband company, OneWeb, the EU’s internal market commissioner has warned.

“We took good note of their decision to participate in a project that is in direct competition with the European initiative. I do not see how, structurally, an entity can have stakes in two competing projects,” said Thierry Breton, who also oversees the European Commission’s tech policy, at the launch of the European Union Agency for the Space Programme (EUSPA).

The new EU constellation was “absolutely critical for our autonomy, for our sovereignty, for our future. So, we will not compromise,” he added.

His comments are likely to further inflame tensions between Brussels and London over collaboration on space projects. After Brexit, the EU barred Britain from full participation in Galileo, its satellite navigation system, and Josef Aschbacher, the new head of the European Space Agency, told the Financial Times recently that there were still “a lot of tensions and suspicions on each side”.

After the EU said it wanted to launch a sovereign satellite internet service from low earth orbit (LEO), industry executives speculated that OneWeb’s network could be a potential platform for collaboration.

New LEO constellations are very costly — at between $6bn and $10bn — and high risk. A $550m investment in April by Eutelsat — which is 20 per cent owned by the French state — for an equal stake in OneWeb to the UK government and India’s Bharti Global was seen as a potential bridge to co-operation.

The satellite broadband business had been rescued out of bankruptcy by the UK and Bharti, with a view to gaining access to the rapidly growing market for connectivity services from low earth orbit. 

About 90 LEO projects have been announced worldwide. These constellations are being seen as critical not just to delivering internet to remote areas but to the success of emerging technologies such as autonomous vehicles and the industrial internet. 

OneWeb was a pioneer in this field, although it has quickly been overtaken by Elon Musk’s Starlink, which has about 1600 satellites in orbit against OneWeb’s 183.

Nine companies were contracted by the EU at the end of 2020 to carry out a technical study for the LEO satellite internet project, including Eutelsat, Airbus, Luxembourg’s SES and others.

Breton said the commission was investigating whether Eutelsat’s investment in OneWeb violated the terms of that contract. It is unclear whether Airbus, which owns 50 per cent of OneWeb’s satellite manufacturing business, would also be considered in conflict.

The EU has written to Eutelsat to ask for clarification on any conflicts of interest. Breton said that beyond the current contract it was questionable whether Eutelsat could be part of the consortium to build the system. A sovereign system was “critical” for Europe to assure connectivity, resilience and security, he said. 

Eutelsat said it had not yet received any communication from Brussels. The Paris-based satellite operator said it had clauses in its agreement with OneWeb to ensure there would be no conflict with EU plans. “The European constellation is at [a] very early stage of studies,” it said. “We don’t know whether [the EU constellation] will be competing with OneWeb. They may have completely different missions, and it is also possible that they could be complementary.”

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