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OneWeb in surprise marketing merger with Eutelsat

Eva Berneke Eutelsat CEO.jpg

OneWeb has turned to Eutelsat, one of its biggest shareholders, to distribute its services in key markets, including maritime, aviation, enterprise, telecoms and government.

The two called it a distribution partnership agreement, but it looks like a merger of marketing operations, though not of the companies.

The deal marks a significant change in OneWeb’s strategy, which until now has formed its own links with potential customers.

Eutelsat, which is the second biggest shareholder in OneWeb, with almost 23%, said it would deliver its “extensive commercial reach to OneWeb” and that OneWeb’s low Earth orbit (LEO) satellites would complement Eutelsat’s geostationary (GEO) fleet. Bharti of India is the biggest shareholder.

Eva Berneke, CEO of Eutelsat, said: “This deal showcases the scope for synergies between our two companies and opens up the potential of low orbit to complement our geostationary assets in the fast-growing markets of aero and maritime mobility, fixed data and government services, building on the development of 5G and cloud technologies that will generate low latency requirements.”

She became CEO at the start of 2022 after seven years leading KMD, a Copenhagen-based IT and software company that is part of the Japanese group NEC. Earlier she was at Danish incumbent TDC.

The move comes two days after OneWeb found its get-out-of-jail-free card when SpaceX agreed to launch the rest of its satellites.

OneWeb previously relied on Russian Soyuz rockets, operated by Arianespace mainly from Russian space ports. But that deal was suspended after Russia started its war on Ukraine, with 428 satellites in orbit, and 220 still awaiting launch.

Sources at OneWeb say that the company has lost hope of regaining the 36 satellites that were on top of a Soyuz in February. Roscosmos, Russia’s space agency, removed them after OneWeb said it would no longer use Soyuz rockets.

But moving to SpaceX will delay completion of OneWeb’s 648-satellite fleet from the middle of this year to 2023, inevitably putting strain on its cashflow. The first iteration of OneWeb had paid all satellite build costs and launch costs before it went into Chapter 11 bankruptcy protection in mid-2020.

Now it will have to find more money, to pay SpaceX and to replace the 36 satellites that are set to join Roscosmos’s museum of space technology in Baikonur – along with Yuri Gagarin’s hut and a mock-up of Buran, the failed Soviet space shuttle.

OneWeb CEO Neil Masterson confirmed that it and Eutelsat will combine their offers to the market. “This expanded partnership with Eutelsat offers us a significant opportunity to combine our GEO and LEO connectivity solutions, expanding our global capacity and further enhancing our commercial service,” he said.

Berneke appeared to confirm that Eutelsat will now be marketing OneWeb services as if they were its own. She said: “As a shareholder in OneWeb, we are excited to play a role in the success of this new constellation by incorporating OneWeb’s connectivity services into our portfolio of solutions.”

Masterson said: “Drawing on Eutelsat’s decades of experience in serving the satellite industry, coupled with OneWeb’s substantial business momentum, the agreement demonstrates our collaborative approach to scaling up our LEO connectivity services. We are thrilled to see our services come together to expand connectivity solutions to communities.”

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