Eutelsat’s stock surged by 268% in just five days, driven by its commitment to fill the void left by Starlink’s exit from Ukraine. The company has been a key satellite internet provider in the region during the conflict. Eutelsat, formed from a merger with OneWeb, combines GEO and LEO satellite capabilities, positioning itself as a strategic alternative in European space connectivity. New partnerships and initiatives to improve digital access in Africa and the Middle East further bolster its revenue potential amid recent financial challenges.
+268%. In merely five days, the stock price of Eutelsat has seen an extraordinary rise. The shares of this Franco-British satellite operator were listed at 4.78 euros on Wednesday, March 5, a staggering fourfold increase compared to their value on Thursday, February 27. What factors contributed to this remarkable surge?
A recent announcement from a Eutelsat representative to Reuters triggered this dramatic shift. The European satellite operator asserts its readiness to fill the gap left by Starlink’s anticipated withdrawal from Ukraine due to the Trump administration’s decision to halt military assistance. For context, Starlink, owned by Elon Musk, is closely associated with the American president.
“We have deployed and continue to operate hundreds of terminals across Ukraine and the Black Sea,” stated the Eutelsat executive. He emphasized that the company has been a crucial provider of satellite internet access in the region since the war’s onset, ensuring vital communication for ground forces.
“The rising tensions between the United States and Europe threaten Starlink’s sales growth in Europe, leaving OneWeb as the sole alternative in low Earth orbit,” remarked Stéphane Beyazian, an analyst at Oddo BHF.
Created through the merger of French Eutelsat and British OneWeb in 2023, Eutelsat Group uniquely combines a fleet of 35 geostationary satellites (GEO) stationed 36,000 kilometers above Earth with a low Earth orbit (LEO) constellation of over 600 satellites.
Preparing for the EU Constellation
Mathematically, Eutelsat may not match the capacity of Starlink’s massive 7,000-satellite constellation. Nonetheless, its strategic GEO-LEO positioning presents a viable alternative while awaiting Iris², the upcoming multi-orbit constellation from the European Union, in which Eutelsat is actively participating.
As the administration of Giorgia Meloni contemplates utilizing Elon Musk’s satellite network, Eutelsat stands out as the sole entity capable of bolstering Europe’s strategic independence in space connectivity.
This move also serves to insulate the company from the unpredictable actions of the billionaire. Elon Musk has previously admitted to intervening in the ongoing conflict by disabling Starlink services during a Ukrainian offensive in Crimea.
In light of this, Eutelsat is showcasing its strength. Recently, it has formed numerous partnerships and, in collaboration with Airbus and Mediatek, has conducted the world’s first tests of a non-terrestrial 5G link. This serves as a significant competitive edge against Starlink’s Direct-to-cell services.
Expanding Reach in Africa and the Middle East
During the MWV event, Orange announced a partnership with Eutelsat aimed at bridging the digital divide in Africa and the Middle East. Their joint satellite internet initiative intends to connect remote regions in countries such as Jordan, Ivory Coast, Senegal, and the Democratic Republic of Congo. “With the goal of gradually extending it to all countries in the region,” stated Orange.
Orange is already leveraging Eutelsat’s Konnect VHTS satellite to provide broadband services to its customers in France. Designed by Thales Alenia Space and launched in September 2022 via Ariane 5, Konnect VHTS is celebrated as the largest communication satellite ever engineered in Europe.
These recent developments are likely to enhance Eutelsat’s revenue streams. This is particularly encouraging as Les Echos points out that Eutelsat has been grappling with the challenges of integrating OneWeb. “During the release of semi-annual results at the end of February, Eutelsat faced new financial write-downs, pushing its accounts into the red,” the economic daily noted.
In conjunction with its financial report, the company announced revised investment forecasts, now ranging between 500 and 600 million euros, “a reduction of about 200 million euros compared to earlier projections.”
In response to these financial updates, the operator has made significant changes within its Board of Directors. Former French minister Fleur Pellerin has notably resigned, and Dominique D’Hinnin, the Chairman of the Board, is also stepping down. Meanwhile, Michel Combes, the former leader of Alcatel-Lucent and SFR, will be joining as an independent director.