EU sees conflict of interest with Eutelsat’s investment in OneWeb

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WASHINGTON — Eutelsat’s investment in OneWeb may be incompatible with continued participation in the European Union’s proposed satellite broadband constellation, an EU official warned.

Eutelsat is part of an industry consortium that received a study contract from the European Commission in December 2020 to examine the feasibility of a European satellite constellation to provide secure communications and broadband services, particularly for underserved parts of Europe. The contract, which includes a wide range of European space and telecommunications companies, is worth 7.1 million euros ($8.7 million) and will last a year.

Eutelsat, though, is also investing in OneWeb, the broadband constellation that emerged from Chapter 11 bankruptcy last year after being acquired by the British government and Indian telecommunications company Bharti Global. Eutelsat announced April 27 it was acquiring a 24% stake in OneWeb for $550 million.

Thierry Breton, the EU commissioner whose portfolio includes space, suggested in a call with reporters May 24 that Eutelsat’s OneWeb stake may pose a conflict of interest. “Personally, I do not see how, structurally and in governance, an entity can have stakes in two competing projects,” he said when asked about Eutelsat’s investment in OneWeb.

He said he did not oppose, in general, Eutelsat’s investment in OneWeb. “They are free to do it, of course. I don’t want to prevent it,” he said. “However, we took a good note of the decision of Eutelsat to invest into a project in direct competition with the European initiative that we’re working on.”

He emphasized the importance of the satellite communications project to the “strategic autonomy” of Europe. “It is therefore important to preserve the interests of the Union,” he said, including reconsidering Eutelsat’s continued participation in the project.

Eutelsat, in comments last week after a conference session about the status of EU constellation study, argued that the two projects are not in conflict with each other, since the EU effort is focused more on the needs of European institutions, while OneWeb is doing business with companies and governments worldwide.

Breton suggested he was unhappy with the industry group’s progress on the satellite communications study. “To tell you the truth, it was very interesting, it was important, but not too innovative,” he said of the first results from that effort. He said the EU will commission a second study involving smaller businesses and startups, rather that the larger companies involved in the first one. They will provide a report within two months. “My dream will be to be able to go on vacation with this new study.”

The briefing was linked to Breton’s visit to the offices of the EU Agency for the Space Programme (EUSPA), the former European Agency for Global Navigation Satellite Systems that was rebranded, with an expanded mandate, earlier this year. EUSPA’s focus will expand beyond the Galileo satellite navigation program to include the Copernicus series of Earth observation satellites as well as satellite communications and space situational awareness.

The creation of EUSPA led some in the European space community to believe the EU was trying to create a competitor to the European Space Agency, an independent organization outside the EU umbrella. Both the EU and ESA have worked to clarify that EUSPA will carry out different roles than ESA, focusing more on operations than research and development.

“EUSPA is more focused, if I may say so, on exploitation of Galileo,” he said, and later with Copernicus. “ESA is more of the design architect for the future generation of our satellites.”

The EU and ESA are still finalizing what’s known as the Financial Framework Partnership Agreement that governs the roles and responsibilities of the two nations as they work on joint projects like Copernicus and Galileo. Breton said those negotiations are nearly complete, with a goal of completing it by June 22.

“I’m very happy with the cooperation that we have with the new director general of ESA,” he said, referring to Josef Aschbacher, who took over the job in March.