Bharti-backed OneWeb, French Co Eutelsat ink key pact to boost connectivity

BENGALURU: Bharti-backed OneWeb on Tuesday said it signed an MoU with French satellite operator Eutelsat Communications for creating a leading global player in connectivity through the combination of both companies in an all-share transaction. Eutelsat will combine its 36-strong fleet of GEO satellites with OneWeb’s constellation of 648 Low Earth Orbit satellites, of which 428 are currently in orbit.“With its uniquely superior GEO/LEO offerings, complementing high throughput with low latency, the combined entity will help bolster the satellite communication capabilities of the nation, catering to the varied range of needs of the private industry as well as the Government. Coming at a crucial time when the Indian space policy is on the anvil, the new entity shall provide further impetus to the recently signed agreement on space coordination between India and France,” OneWeb said.As the largest shareholder in the combined entity, Bharti will continue its full interest in Oneweb, via Eutelsat. “Sunil Bharti Mittal will be the co-chair of the combined listed entity and Shravin Bharti Mittal, the second Bharti director. Oneweb India will also become a subsidiary of the Eutelsat JV post FDI clearances, and with its unique capabilities of covering all unconnected white spaces, is confident of furthering the objective of a digitally connected India,” it said.“...The transaction would be structured as an exchange of OneWeb shares by its shareholders (other than Eutelsat) with new shares issued by Eutelsat, such that, at closing, Eutelsat would own 100% of OneWeb (excluding the ‘Special Share’ of the UK Government). OneWeb shareholders would receive 230 million newly issued Eutelsat shares representing 50% of the enlarged share capital,” it added.The potential transaction, as per a statement shared with TOI, builds on the deepening collaboration between Eutelsat and OneWeb, begun with the equity stake acquired by Eutelsat in OneWeb in April 2021, the global distribution agreement between Eutelsat and OneWeb announced in March 2022, and the new exclusive commercial partnership, addressing mainly the European and global cruise markets, signed Tuesday.Dominique D’Hinnin, chairman, Eutelsat, said: “Bringing together our businesses will deliver a global first, combining LEO constellations and GEO assets to seize the significant growth opportunity in connectivity, and deliver to our customers solutions to their needs across an even wider range of applications.” This combination, D’Hinnin said, will accelerate commercialisation of OneWeb’s fleet, while enhancing the attractiveness of Eutelsat’s growth profile. Eutelsat and OneWeb, as per the statement, will address the considerable connectivity market opportunity, which is fueled by the growing needs of customers in both the B2B and B2C segments for consistent, reliable connectivity. These market segments are forecast to grow by three and five times respectively over the next decade, to reach a combined value of circa $16 billion by 2030, with growth being served by both GEO and LEO capacity.Sunil Bharti Mittal, executive chairman, OneWeb, said: “Having played a pioneering role in providing connectivity in the emerging world, I’m excited about the possibilities of connecting the unconnected. The Eutelsat and OneWeb combination represents a significant development in that direction as well as a unique GEO/LEO combination…Our customers are actively seeking a combined GEO/LEO offering leading us towards this important step. Bharti, as the lead shareholder of OneWeb, along with other key shareholders, is looking forward to playing a meaningful role in providing expanded connectivity through OneWeb and Eutelsat.”Eutelsat CEO Eva Berneke said the firm’s initial investment in OneWeb was underpinned by its belief that the future growth in connectivity will be driven by both GEO and LEO capacity. “...This ground-breaking combination will create a powerful global player with the financial strength and technical expertise to accelerate both OneWeb’s commercial deployment, and Eutelsat’s pivot to connectivity. The combined entity will be geared towards profitable growth, with strong medium-term cash flow generation and a rapid deleveraging driven by strong forecast EBITDA growth,” Berneke said.OneWeb CEO Neil Masterson said that just 20 months ago, the firm resumed its mission to connect the unconnected and remove barriers to connectivity that hold back many of the world’s underserved economies and communities.