{"id":36674,"date":"2023-12-27T08:48:21","date_gmt":"2023-12-27T08:48:21","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=36674"},"modified":"2023-12-28T07:31:42","modified_gmt":"2023-12-28T07:31:42","slug":"uk-gov-sees-stake-in-oneweb-satellite-broadband-firm-halved","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/12\/uk-gov-sees-stake-in-oneweb-satellite-broadband-firm-halved.html","title":{"rendered":"UK Gov Sees Value of Stake in OneWeb Satellite Broadband Firm Halved"},"content":{"rendered":"<p>The tumbling share price of European <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/satellite\">satellite<\/a> operator <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/eutelsat\" target=\"_blank\">Eutelsat<\/a> has effectively more than halved the value of the UK Government&#8217;s associated stake in <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/oneweb\" target=\"_blank\">OneWeb<\/a> (currently worth c.\u00a3200m). The operator is now facing more pressure to secure a key EU <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/satellite\">satellite<\/a> broadband contract, which won&#8217;t be easy due to.. politics.<!--more--><\/p>\n<p><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/oneweb\" target=\"_blank\">OneWeb<\/a> (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/eutelsat\" target=\"_blank\">Eutelsat<\/a> <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/oneweb\" target=\"_blank\">OneWeb<\/a>) currently has 634 of their small (c.150kg) first generation (GEN1) <strong>Low Earth Orbit<\/strong> (LEO) platforms in space \u2013 orbiting at an altitude of 1,200km above the Earth (588 of them for coverage and the rest for redundancy). The network was technically completed in March 2023 (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/03\/oneweb-successfully-completes-leo-satellite-broadband-network.html\">here<\/a>) and promises both ultrafast speeds and fast latency times.<\/p>\n<div class=\"bq2\"><strong>NOTE:<\/strong> ISP <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a> is currently working with OneWeb on a UK rural broadband trial (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/07\/bt-and-onewebs-rural-broadband-trial-goes-live-in-devon-uk.html\">here<\/a> and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/04\/oneweb-and-bt-confirmed-for-rural-uk-satellite-broadband-trial.html\">here<\/a>).<\/div>\n<p>Just to recap. <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/eutelsat\" target=\"_blank\">Eutelsat<\/a> formally completed the acquisition of OneWeb in September 2023. Under the agreement, Eutelsat will remain headquartered in Paris, while OneWeb will be a subsidiary operating commercially as Eutelsat OneWeb with its centre of operations remaining in London. Eutelsat currently remains listed on the Euronext Paris Stock Exchange and has applied for standard listing on the London Stock Exchange (LSE).<\/p>\n<p>The merger was intended to help Eutelsat enter the new market for LEO based broadband satellites, which is an area that has thus far been dominated by <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/starlink\" target=\"_blank\">Starlink<\/a>. By comparison, OneWeb saw the deal as being a way of potentially helping them to fund and start delivering their next (second) generation of satellites in a couple of years&#8217; time.<\/p>\n<p>The problem is that Eutelsat&#8217;s share price has lost about a quarter of its value in just the past three months, which according to the <a href=\"https:\/\/www.telegraph.co.uk\/business\/2023\/12\/26\/taxpayers-200m-loss-satellite-oneweb-dominic-cummings\/\" target=\"_blank\" rel=\"noopener\">Telegraph<\/a> (paywall) now values the UK government&#8217;s remaining stake in the French company via OneWeb at around \u20ac225m (\u00a3195m) &#8211; roughly less than half of what they originally invested several years ago. But as a spokesperson for the government said: &#8220;<em>Share prices fluctuate in the short term but this was a long-term investment<\/em>.&#8221;<\/p>\n<p>As usual, there are a number of reasons for Eutelsat&#8217;s dismal performance. Firstly, the company was already under pressure from <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/starlink\" target=\"_blank\">Starlink<\/a>, but the OneWeb deal could only ever help to mitigate that by so much (it&#8217;s a much smaller network) and investors were uneasy about the cost of the deal. OneWeb will also need billions more in the future to deploy its second generation of satellites, but high interest rates make that much more expensive.<\/p>\n<div class=\"bq2\"><strong>NOTE:<\/strong> OneWeb has plans to launch another 1,280 satellites in the future (funds allowing), which are expected to reflect a GEN2 model that could sit in a higher <strong>Medium Earth Orbit<\/strong> (MEO) of 8,500km. The GEN2s are widely expected to have more data capacity, support for <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/5g\">5G<\/a> mobile and may, possibly, introduce enhanced navigation and positioning features.<\/div>\n<p>In addition, Eutelsat&#8217;s debt was recently (November 2023) downgraded by Fitch due to &#8220;<em>significantly increased execution and free cash flow risks<\/em>&#8220;. The <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/satellite\">satellite<\/a> operator is still hoping to tackle some of this by bidding on the EU&#8217;s own LEO network project, which is intended to provide an alternative to dependence upon Elon Musk&#8217;s <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/starlink\" target=\"_blank\">Starlink<\/a> (SpaceX).<\/p>\n<p>The problem is that EU leaders are known to be wary of such a bid because the UK government still retains veto powers over certain business deals via a golden share, which is applicable to specific points relating to national security, IP and changes to the nature and scope of OneWeb\u2019s business. For example, this means the government could veto a decision to shift OneWeb\u2019s HQ out of the UK or any sale of business to a hostile state (any changes to key UK suppliers of the OneWeb network might similarly throw up some issues).<\/p>\n<p>The UK Government has also previously hinted that OneWeb&#8217;s future GEN2 satellites could introduce enhanced navigation and positioning features, which is something they&#8217;ve long perceived as necessary due to being unable to stay a member of the Galileo project &#8211; Europe&#8217;s Global Navigation Satellite System (GNSS). But it remains unclear whether OneWeb&#8217;s second generation satellites will actually deliver this, assuming they do eventually get off the ground.<\/p>\n<p>Suffice to say that 2024 is going to be a very interesting year, although a quick look at Eutelsat&#8217;s historical trends over the past 5 years does rather suggest that things have been going downward a lot more than upward.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The tumbling share price of European satellite operator Eutelsat has effectively more than halved the value of the UK Government&#8217;s associated stake in OneWeb (currently worth c.\u00a3200m). The operator is now facing more pressure to secure a key EU satellite broadband contract, which won&#8217;t be easy due to.. politics.<\/p>\n","protected":false},"author":1,"featured_media":35856,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[85,38,77],"class_list":["post-36674","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-europe","tag-politics","tag-satellite"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/111651520870604196","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>UK Gov Sees Value of Stake in OneWeb Satellite Broadband Firm Halved - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The tumbling share price of European satellite operator Eutelsat has effectively more than halved the value of the UK Government&#039;s associated stake in\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/12\/uk-gov-sees-stake-in-oneweb-satellite-broadband-firm-halved.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UK Gov Sees Value of Stake in OneWeb Satellite Broadband Firm Halved - 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