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Musk “changing the way we think about risk”: Satellite incumbent plots Starlink fightback

Eutelsat, a major satellite company, has been facing declining revenue in its traditional broadcast operations while dealing with the challenges posed by tech billionaires Elon Musk and Jeff Bezos. In an effort to revitalize the company’s prospects, Eutelsat CEO Eva Berneke is placing a strategic bet on the acquisition of British firm OneWeb.

Eutelsat’s primary source of revenue comes from geostationary satellites that provide connectivity for TV networks. However, this revenue stream has been gradually diminishing. OneWeb, on the other hand, specializes in low Earth orbit (LEO) satellites used for internet connectivity. Berneke sees the combination of Eutelsat’s legacy business with OneWeb’s LEO business as a significant advantage.

The acquisition of OneWeb, which filed for bankruptcy in 2020 but was saved by investments from the U.K. government, positions Eutelsat to compete with Musk’s Starlink and Bezos’ Project Kuiper. By merging the two networks—a geostationary plus low orbit constellation—Eutelsat aims to enhance its offerings and solidify its position in the market.

While some Eutelsat shareholders have expressed concerns and pushback due to the significant changes and the suspension of dividends, Berneke emphasizes the company’s shift toward becoming a high-growth entity. New investors are expected to enter the stock, and Eutelsat plans to dual list on the London Stock Exchange after finalizing the OneWeb deal.

Acknowledging the disruptive influence of Musk and his willingness to take risks, Berneke highlights the need for companies to adopt a similar mindset and embrace measured risks while moving forward rapidly.

Overall, Eutelsat’s acquisition of OneWeb represents a bold move to transform the company’s trajectory by capitalizing on the synergies between their respective satellite technologies and competing against industry giants in the evolving satellite internet connectivity space.