Eutelsat Adopts Gradual Path for OneWeb Gen 2
Eutelsat has opted to slow the pace of its OneWeb second-generation satellite program, prioritizing service continuity for customers with long-term contracts over an immediate leap in performance. The French satellite operator announced the shift on Feb. 16, outlining a progressive upgrade strategy that trims nearly one-third from the previously projected $4 billion budget for the Gen 2 constellation.
Chief executive Eva Berneke explained the rationale during an earnings call, emphasizing the importance of maintaining uninterrupted service. “It’s very important to us that we keep the continuity of service with our customers in these multi-year contracts and set them up over time, and then bring the new functionality when it’s ready,” she said. The approach also leaves room for potential public sector funding, notably from Europe’s IRIS² sovereign broadband initiative, to support new technology development.
Eutelsat tested a Gen 2 technology demonstrator in 2023 and has been in discussions with manufacturers about a constellation of roughly 300 satellites, with deployments potentially starting in 2025. The current OneWeb network consists of 633 satellites launched between 2020 and 2023, designed for operational lifespans extending to 2027–2028. These spacecraft were built through a Florida-based joint venture with Airbus, which recently acquired Eutelsat’s stake in the venture.
Under the revised plan, Eutelsat has not disclosed the exact number of satellites to be deployed. The company has previously indicated that Gen 2 could be smaller than Gen 1, partly by leveraging its geostationary (GEO) satellites to handle traffic in high-demand regions. This hybrid approach could reduce the number of low Earth orbit (LEO) satellites needed while enhancing overall network efficiency.
Chief financial officer Christophe Caudrelier noted that Eutelsat is engaging with export credit agencies in India, the United Kingdom, and France to finance most of the Gen 2 costs. The expansion of OneWeb’s commercial services worldwide is expected to underpin these investments. However, despite having all satellites for global coverage in place, ground segment delays have slowed the rollout. Originally planned for early 2024, full global service is now projected to reach only 90% of the ground network by the end of June, hindered by installation and licensing challenges.
Key markets awaiting activation include India and Saudi Arabia, both significant enterprise and government customer bases. As of December, Eutelsat reported a OneWeb customer backlog of about 700 million euros ($754 million), up 23% from three months earlier. In regions where service is live, such as Alaska, customers are seeing download speeds up to 195 megabits per second, uploads at 32 Mbps, and latency around 70 milliseconds.
While LEO operations face delays, Eutelsat’s GEO assets have delivered notable gains. The recently launched Konnect VHTS and Eutelsat 10B satellites have contributed to reversing years of revenue decline tied to the shrinking legacy video market. For the six months ending Dec. 31, Eutelsat posted 572.6 million euros in revenue, a 1% increase year-on-year when adjusted for currency changes. Video services, still the largest segment at 331.1 million euros, fell 8% due to non-renewed contracts, scaled-down broadcasts, and sanctions affecting Russian and Iranian channels.
Growth came from government services, mobile connectivity, and fixed connectivity, which rose 10.5%, 35.6%, and 9.2%, respectively. These sectors benefited from OneWeb’s contribution, underscoring Eutelsat’s strategic acquisition of the company to accelerate its shift toward connectivity-focused operations. Adjusted EBITDA for the period stood at 365.6 million euros, down 12.7% from 419 million euros a year earlier.
