Eutelsat Needs To Close Funding Gap To Gain Ground On Starlink
Eutelsat, the Franco-British satellite operator, is racing against time and scale. It’s going to challenge Elon Musk’s Starlink. However, Eutelsat’s financial footing remains shaky.
Despite a €1.5 billion investment led by France, analysts warn that the company’s debt load, limited satellite reach, and uneven European support could stall its ambitions to become a sovereign alternative in space.
France Leads, But Europe Hesitates
France’s commitment of €750 million for a 29.65% stake in Eutelsat marks a bold political move. President Emmanuel Macron has framed the investment as a matter of European sovereignty.
He stated, “The race is on. That’s why we have to take a position now and invest now. Otherwise, the whole market will be occupied and France and Europe will depend on other powers in the future.”
The UK has pledged €163 million to retain its 10.89% share, while other investors include Bharti Space, CMA CGM, and Fonds Strategique de Participations. Yet, Germany and other EU member states remain noncommittal.
Christophe Grudler, a French member of the European Parliament, emphasized that “France’s decision to strengthen its stake is a strong political act. But it cannot stop there. Germany and other member states should also step in. One country alone cannot carry this continental ambition in space.”
Initial talks between France and Germany took place in late August. However, no formal commitments have followed yet. Eutelsat confirmed to Reuters that discussions are still in early stages.
Debt Burden and Satellite Deficit
Eutelsat’s financial challenges are stark. The company carries €2.6 billion in debt and closed 2024 with a loss. Its OneWeb constellation, acquired in 2023, operates around 650 low Earth orbit (LEO) satellites. In contrast, Starlink has nearly 8,000 satellites in orbit.
Joe Gardiner, analyst at CCS Insight, noted that “With only 650 satellites, it is approximately a tenth of the size of the Starlink constellation. OneWeb’s hardware is not as capable as Starlink’s satellites, and so the company will need to invest in an entirely new second generation.”
Moody’s downgraded Eutelsat’s bonds to B2, citing “lower profit forecasts, increased competition, and significant refinancing needs in 2027.”
Ernesto Bisagno, Moody’s analyst, added that “The downgrade partly reflected lower profit forecasts, increased competition and significant refinancing needs in 2027.”
Interest rates on Eutelsat’s bonds have surged from 1.5% in 2020 to 9.75% in 2024. It reflects that investors are more concerned about risk.
Ukraine and Strategic Leverage
Eutelsat’s stock has rebounded from historic lows following EU discussions to replace Starlink in Ukraine. Germany already funds Ukraine’s access to Eutelsat, and the company has delivered thousands of user terminals to Kyiv.
European Commission spokesperson Thomas Regnier confirmed that “Operational planning and coordination with member states and relevant stakeholders on Ukraine continue.”
This geopolitical angle has revived Eutelsat’s relevance. However, analysts caution against overreliance on short-term boosts.
Analysts Split on Long-Term Viability
Bernstein’s Aleksander Peterc sees potential if Germany joins the shareholder base, saying that “The addition of Germany as a core shareholder would further solidify Eutelsat’s position as the prime sovereign European LEO connectivity provider.”
But Stifel’s Antoine Lebourgeois warns that “Support from European governments is a crucial first step and a strong signal, but it may not be sufficient on its own to secure OneWeb’s long-term viability.” “Given the intense competition and economies of scale of players like Starlink, OneWeb will likely need a more substantial and sustained commitment from the public sector to truly thrive as a European alternative.”
Luke Kehoe, analyst at Ookla, added that “France is now treating Eutelsat less like a commercial telco and more like a dual-use critical-infrastructure provider.”
Strategic Urgency, But No Guarantees
Eutelsat’s leadership insists that the current political turmoil in France will not delay the funding timeline. The company told Reuters that “In terms of timing, it’s unlikely to be impacted by a deadlock at this stage,”. Still, the way ahead is steady. To close the gap with Starlink, Eutelsat must deploy 340 new satellites at a cost of over €2 billion. It also has to replace aging OneWeb units.
The question is not whether Europe needs its own satellite internet provider; of course, it does. The question is whether Eutelsat, even with France’s backing, can survive long enough to become one.
