European Satellites Poised to Replace Musk’s Starlink in Ukraine
Eutelsat Stock Soars Amid ukraine Satellite Internet Shift
Table of Contents
- Eutelsat Stock Soars Amid ukraine Satellite Internet Shift
- Eutelsat and OneWeb: Navigating the Future of Satellite Internet in Ukraine and Beyond – Q&A
The European satellite operator Eutelsat experienced a dramatic surge in its stock value, climbing over 370% last week. This spike is attributed to the possibility of Eutelsat replacing Starlink in Ukraine, amidst ongoing tensions between the U.S.and ukraine.
eutelsat’s OneWeb Satellites: A Potential Starlink Option
European satellites,specifically the OneWeb satellites managed by the Franco-British company Eutelsat,are poised to potentially supplant Elon Musk’s Starlink in providing internet services over Ukraine.
The company is reportedly in discussions with the European Commission, which has fueled a notable increase in its stock price. Over the last five sessions, shares have jumped by more than 370%, reaching €5.84 and valuing the company at €2.55 billion on the Paris stock exchange.
Tensions and Shifting Alliances
The surge in Eutelsat’s stock follows a period of heightened tension involving the U.S. and Ukraine.Concerns about the future of Starlink in Ukraine arose after reports surfaced in February that the U.S. government threatened to withdraw Starlink support unless Kiev agreed to cede its critical minerals to the U.S. in exchange for aid in the conflict against Russia.
Adding to the uncertainty, the U.S. recently announced a pause in military aid to Ukraine, suggesting that it was time for Europe to take the lead.
Eutelsat’s Role in Ukraine
An official source from Eutelsat told “reuters” this week: “We are talking with the EU to see how we can contribute to the efforts in Ukraine. We have provided and continue to operate hundreds of terminals in Ukraine and the Black Sea.”
In comparison, Starlink operates approximately seven thousand satellites, delivering internet services to 125 countries.
Eutelsat’s Capabilities and Expansion
Following its merger with OneWeb in 2023, Eutelsat now manages a constellation of 650 Low Earth Orbit (LEO) satellites, providing internet services to numerous corporate clients.
While possessing less than a tenth of the satellite count compared to Elon Musk’s Starlink, Eutelsat boasts the second-largest LEO constellation globally and asserts its ability to offer comparable services within Europe.
Notably, in 2024, the Ukrainian mobile operator Kyivstar announced it was testing OneWeb’s technology.
According to the company, “We are actively collaborating with European institutions and partners to enable the rapid development of critical missions and infrastructure.”
Analysts Weigh In
Stephane Beyazian, an analyst at oddo BHF, suggests that “U.S.-Europe tensions put Starlink sales at risk in Europe, and OneWeb is the only other option in low orbit.”
Jan Frederik Slijkerman, an analyst at ING, highlights the “importance” of Eutelsat for Europe’s “defense capabilities,” noting that ”We expect customers looking for satellite connections to rotate the risks related to individual suppliers, which is why they may be looking for additional suppliers.”
Goldman Sachs has also shifted its recommendation from ‘sell’ to ‘neutral’ this week. Analysts stated, “We underestimated the bullish risk of government support,” citing increased defense spending in Europe and the geopolitical landscape as favorable factors.
Challenges and Opportunities
The landscape shifted rapidly for Eutelsat. In January, Moody’s downgraded its rating further into ‘junk’ territory, citing underperformance of certain satellite types and cash flow pressures due to necessary investments.
In Italy, Eutelsat is engaged in discussions with the government to provide a secure communications system, even though some within Giorgia Meloni’s government reportedly favor starlink.
Retail Investor influence
The company’s stock performance is also being influenced by retail investors, described by Kepler Cheuvreux analysts as “the French version of the Gamestop effect,” referencing the U.S. company that experienced a rally in 2021 after influencer keith Gill invested in the stock.
Future Outlook
Reflecting on the company’s stock behavior and future prospects, Latvian investor Martins Krusts, quoted by “Reuters,” suggests Eutelsat could become “the cheapest defense company on planet Earth.”
Eutelsat’s Stock Surge: Understanding the Dynamics
Why did Eutelsat’s stock value surge recently?
Eutelsat experienced a critically important stock surge, climbing over 370%. This increase is primarily attributed to the possibility of Eutelsat, through its OneWeb satellites, replacing Starlink in providing internet services to Ukraine, coupled with geopolitical tensions between the U.S. and Ukraine.
What is the current valuation of Eutelsat?
As of the recent stock surge, Eutelsat is valued at €2.55 billion on the Paris stock exchange, with shares reaching €5.84.
What is driving investor confidence in Eutelsat?
Potential for increased government support and defense spending in Europe.
Geopolitical landscape favoring option satellite internet providers.
Analyst upgrades, such as Goldman Sachs shifting from ‘sell’ to ’neutral’.
the perception that Eutelsat could become a key player in European defense capabilities.
Eutelsat’s OneWeb Satellites as a Starlink Alternative
How is Eutelsat positioned to potentially replace Starlink in Ukraine?
Eutelsat, a Franco-British satellite company, manages the OneWeb constellation.Discussions with the European Commission have fueled speculation that OneWeb satellites could provide internet services in Ukraine, especially given tensions between the U.S. and Ukraine regarding starlink.
what are Eutelsat’s capabilities in comparison to Starlink?
While Starlink operates approximately 7,000 satellites globally, Eutelsat, after merging with OneWeb in 2023, manages a constellation of 650 Low Earth Orbit (LEO) satellites. Although smaller, it is the second-largest LEO constellation globally and aims to offer comparable services within Europe.
Has OneWeb technology been tested in Ukraine?
Yes, in 2024, the Ukrainian mobile operator Kyivstar announced it was testing OneWeb’s technology.
How many terminals does eutelsat currently operate in Ukraine?
Eutelsat currently operates hundreds of terminals in Ukraine and the Black Sea.
Geopolitical Tensions and shifting Alliances
How are U.S.-Ukraine tensions affecting the satellite internet landscape?
Reports indicated that the U.S. government threatened to withdraw Starlink support unless kiev agreed to cede its critical minerals to the U.S. This tension, combined with a pause in U.S. military aid, has prompted Europe to consider taking a leading role and exploring alternatives like Eutelsat’s OneWeb.
Why are analysts highlighting U.S.-Europe tensions?
Analysts suggest that tensions could put Starlink sales at risk in Europe, positioning OneWeb as the only viable alternative in low orbit, especially as customers might potentially be looking for additional suppliers to mitigate risk.