French satellite operator Eutelsat to become leading investor in OneWeb

Eutelsat Communications will buy a 24% stake in OneWeb for $550 million (Rs 4,101 crore), making the French satellite firm the leading shareholder in the communications network company.

Eutelsat, whose satellites are used for video broadcasting, data connectivity, connecting aeroplanes and ships, will receive governance rights similar to the UK government and Bharti Global, including board representation.

London-headquartered OneWeb said that the investment, expected to be completed in the second half of 2021, will bring its total funding to $1.9 billion in fresh equity.

“This investment from one of the world’s most experienced and largest global operators is a vote of confidence in OneWeb and underscores the arrival of Low Earth Orbit satellites into mainstream long-term growth planning for major operators,” OneWeb said.  

It expects annual revenues of about $1 billion in three to five years following the deployment of its second-generation constellation.  

“As OneWeb accelerates the deployment of its fleet and engages in discussions with potential customers, we welcome the powerful support of Eutelsat during the next exciting phase of our journey together, benefitting both companies equally,” Neil Masterson, CEO of OneWeb, said.

OneWeb secured 80% of the necessary financing and is well advanced in securing its remaining funding needs this year, the release said.

“OneWeb will become our main growth engine outside our broadcast and broadband applications, as we continue to maximise cash-flow extraction from our highly profitable heritage business and grow our fixed broadband vertical leveraging our geostationary assets,” Rodolphe Belmer, CEO of Eutelsat, said.

The company reiterated its dividend policy and said that the investment was consistent with its financial hurdle rates and did not alter the firm’s financial objectives.

Eutelsat has a fleet of 39 satellites serving broadcasters, video service providers, telecom operators, ISPs (internet service providers) and government agencies operating across Europe, Africa, Asia and the Americas. It has a workforce of 1,200 professionals across 50 countries.

OneWeb was founded in 2012 and is powered by a constellation of 650 Low Earth Orbit satellites.