Eutelsat needs to close funding gap to gain ground on Starlink

Satellite operator Eutelsat must secure investment from more European countries to bolster its efforts to challenge billionaire Elon Musk’s Starlink, EU lawmakers and analysts say following a commitment by France.

The debt-laden Franco-British company has gained unprecedented attention this year from European governments as the policies of President Donald Trump have raised concern about their reliance on US satellite companies.

A 1.5-billion-euro ($1.8 billion) investment in Eutelsat led by France is set to be approved by shareholders on Tuesday, after which the company hopes other countries will follow suit.

President Emmanuel Macron has urged other countries and companies to invest, framing the decision as a matter of European sovereignty.

Christophe Grudler, a French member of the European Parliament who has urged the European Commission to find alternatives to Starlink for Ukraine as the war with Russia drags on, said Eutelsat is one of Europe’s best responses to Starlink but it requires political commitment.

“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,” he told Reuters.

In the latest fundraising, France will commit 750 million euros for a 29.65% stake, while Britain will contribute 163 million euros to retain a 10.89% share in a two-stage investment plan.

Other investors are Indian billionaire Sunil Mittal’s Bharti Space, shipping group CMA CGM, and Fonds Strategique de Participations, a French insurer-backed investment fund.

Eutelsat – which has introduced a new CEO, chairman and a revamped brand identity – confirmed to Reuters its aim to involve more European countries, though discussions remained in early stages.

Initial talks between France and Germany took place at the Franco-German council of ministers on August 29, the company said in an emailed statement.

The German and French governments did not respond to Reuters requests for comment.

Shareholders involved in the current capital increase declined to comment.

Eutelsat’s stock has rebounded from all-time lows on talks with the European Union to potentially replace Starlink in Ukraine.

Operational planning and coordination with member states and relevant stakeholders on Ukraine continue, Commission spokesperson Thomas Regnier told Reuters in an emailed response to queries.

Germany already pays for Ukraine’s access to Eutelsat and Eutelsat has delivered thousands of user terminals to Kyiv.

Eutelsat told Reuters that it was not directly affected by the collapse on September 8 of the French government. However, the company – which is dependent on France pledging immediate financial relief – underlined the need for stability and continuity.

Asked about the risk of political turmoil possibly delaying France’s 2026 budget, Eutelsat said it would only affect the next fiscal year.

“In terms of timing, it’s unlikely to be impacted by a deadlock at this stage.”

The funding is expected to reduce Eutelsat’s 2.6-billion-euro debt and help deploy 340 low Earth orbit (LEO) satellites for its OneWeb constellation costing over 2 billion euros.

Eutelsat acquired OneWeb in 2023 to capitalise on growing demand for satellite internet. —Reuters