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The French military has signed a 10-year deal with state-backed satellite provider Eutelsat as part of a programme that could see it spend as much as a billion euros on communications services across its forces.
The announcement, which came during the Paris Air Show on Thursday, will be a shot in the arm to heavily indebted Eutelsat just as it is on the verge of clinching a new capital raise in which the French government will participate. Shares rose about 11 per cent by mid-morning trading in Paris.
The French military’s commitment to using Eutelsat’s low Earth orbit satellites will implicitly backstop what is set to be an expensive investment push in the coming years. It has not been disclosed how much of the €1bn allocated to the military’s communication services will go to Eutelsat.
Eutelsat, which is pushing to build a European rival to Elon Musk’s Starlink, has been negotiating with its leading investors for funding and equity. Its shareholders include the UK government with an 11 per cent stake, India’s Bharti Global with 24 per cent — both had backed the rescue of satellite service OneWeb by Eutelsat in 2020 — as well as CMA CGM, the global container shipping group.
OneWeb has the second-largest constellation providing broadband services from low Earth orbit, with about 650 satellites compared with Starlink’s more than 7,000. But it has to replace many of them in the coming years, and also needs billions to invest in an EU-backed project known as Iris² towards the end of the decade.
The programme “aims to progressively enhance the security and functionality levels of the OneWeb system as it is renewed, in order to expand the range of potential military applications”, France’s defence ministry said in a statement. It also reiterated French support for the Iris² constellation, which it sees as a key element of the region’s sovereignty and independence.
Eutelsat’s chief executive Jean-François Fallacher said the contract “underscored the crucial role of low Earth orbit satellite capacity in responding to the requirements” of armed forces.
