TAMPA, Fla. — Eutelsat is taking another step away from consumer broadband as Starlink’s sprawling low Earth orbit (LEO) network continues to erode demand for geostationary services.
The French operator said Feb. 14 it is repurposing Konnect VHTS, the 500-gigabit-per-second satellite launched to geostationary orbit (GEO) in 2022 for consumer broadband over Europe and Africa, to serve higher-paying mobility customers in other markets.
Eutelsat CEO Eva Berneke said Konnect VHTS is currently providing connectivity to major customers in Spain, Switzerland and France, adding that only Italian telco TIM has opted not to proceed with migrating to the satellite.
“However, we will probably not sell all of the capacity,” she added, so “we are developing terminals for also mobility use,” such as connectivity on boats and planes.
Berneke pointed to mounting consumer broadband competition from Starlink, which can provide lower-latency services with LEO satellites orbiting much closer to Earth than GEO.
While SpaceX’s Starlink initially focused on the consumer broadband market, she noted that the U.S.-based company has been steadily expanding into enterprise and government services in recent years.
Shifting Focus
The legacy GEO operator formally shifted its focus to connectivity about a decade ago as its video business began to stagnate, with declines accelerating as online streaming gained traction.
In 2023, Eutelsat acquired OneWeb, a LEO broadband operator specializing in enterprise and government customers, to strengthen its connectivity push amid Starlink’s growing dominance.
That same year, Eutelsat sold off its European retail broadband operations, returning its focus to wholesale services.
Eutelsat currently has a fleet of 35 geostationary satellites for broadband and TV broadcasting, alongside 654 OneWeb spacecraft in LEO.
The operator sees its GEO fleet as a key differentiator from LEO-only broadband providers such as Starlink, offering redundancy and additional capacity in high-traffic areas.
Berneke said during the Feb. 14 financial results call that Konnect VHTS could empower OneWeb’s upcoming LEO services for the aviation market, for instance.
However, she also said Eutelsat is closely reviewing future GEO investment needs amid a general shift in the market toward LEO for connectivity.
Total Eutelsat capital expenditures are now set to come in at 500 million to 600 million euros ($525 million to $630 million) for the financial year ending in June — 200 million euros lower than previous estimates, Berneke said, “thanks to the timing of LEO investments and reinforced vigilance on GEO expenditures.”
Eutelsat expects to spend up to 2.2 billion euros to deploy 440 LEO spacecraft needed to sustain OneWeb’s constellation before it begins deploying 264 LEO satellites for Europe’s Iris² multi-orbit network, which is set to enter service around 2030.
Berneke said the operator is in talks with export credit agencies to help finance OneWeb’s replenishment, after recently ordering the first 100 follow-on spacecraft from Airbus.
Eutelsat is investing around 2 billion euros in Iris², with most of the spending planned for the later stages of the project. The company said it expects to generate at least 6.5 billion euros over an initial 12-year concession period, including several hundred million euros in government-backed capacity commitments from European Union members.
OneWeb vs. Starlink
With LEO constellations from Amazon and Telesat still years away from deployment, OneWeb remains Starlink’s only meaningful competitor.
However, ground infrastructure delays continue to prevent OneWeb from launching global commercial services.
“We still have around five gateways to go in some of the complicated places like Tanzania and Senegal and Martinique,” Berneke said, “and those are flowing into second half of the year.”
Regulatory issues are slowing deployment in other countries such as India, where Starlink is also still awaiting approval to provide satellite broadband.
Although Starlink has quickly gained LEO market share, Berneke pointed to strong demand for competition as customers seek alternatives to avoid reliance on a single provider.
“And lots of customers are putting a lot of importance also to have non-U.S., non-Chinese alternatives” for geopolitical reasons, she said, in addition to multiple networks for resiliency, citing a recent OneWeb contract with the Taiwanese government as an example.
Eutelsat reported 606.2 million euros in total revenues for the six months ending in December, up 4.4% year-over-year when adjusted for foreign exchange rates, as strong connectivity growth offset a 6.4% drop in video sales.