Paris-based geostationary orbit satellite company Eutelsat has acquired a 24% stake in low Earth orbit satellite company OneWeb for $550m.
The deal will provide London-headquartered OneWeb with additional market opportunities and fresh financial backing for its low-latency internet communications network.
It makes Eutelsat a leading shareholder alongside Bharti Global and the UK government, both of which rescued OneWeb from bankruptcy last year in a $1bn takeover.
In January Japanese conglomerate SoftBank pumped a further $400m into OneWeb, which at the time brought its total funding to $1.4bn. With the Eutelsat investment OneWeb now has 80% of the funding for its first-generation constellation.
So far it has launched 182 of a planned 648 satellites, which orbit 1,200km above the Earth. The network is expected to offer “significant regional coverage” by the end of 2021 and global coverage in 2022.
Its constellation is playing catch up to Elon Musk-owned competitor Starlink, which has more than 1,300 satellite orbits and plans to launch thousands more.
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Eutelsat operates a network of satellites about 36,000km above the Earth that provides continuous coverage on a specific part of the planet, which makes it suited for fixed services such as direct-to-home TV and mobile data connections. OneWeb’s satellites cater to governments and businesses, as well as communities in remote areas where internet coverage is poor. This business reach includes the maritime and aviation sectors.
Once the full constellation is deployed, OneWeb forecasts annual revenue of around $1bn within three to five years.
Chief executives from the two companies said the businesses would complement one another.
In a statement, Eutelsat CEO Rodolphe Belmer touted OneWeb’s “earliness to market, priority spectrum rights and evolving, scalable technology.”
He added: “OneWeb will become our main growth engine outside our broadcast and broadband applications, as we continue to maximize cash-flow extraction from our highly profitable heritage business and grow our fixed broadband vertical leveraging our geostationary assets.”
As part of the deal Eutelsat will gain similar governance rights to the UK government and Bharti Global, which includes board representation.
OneWeb CEO Neil Masterson said: “Eutelsat is a great partner for OneWeb thanks to our high level of complementarity in terms of technology, assets, addressable markets, geographic reach and institutional relationships.”