TAMPA, Fla. — Eutelsat expects to take a 7% revenue hit as delays securing landing rights in India, Thailand, Turkey, and elsewhere prevent the OneWeb broadband constellation it finished launching nearly a year ago from providing global coverage before the second half of 2024.
The company had planned to start providing the service worldwide in early 2024 after deploying 633 satellites in low Earth orbit (LEO), including in-orbit spares.
However, Eutelsat CEO Eva Berneke said in a Jan. 29 management call with analysts that the company is behind on rolling out gateways for the constellation, and expects to have only completed 90% of the ground network by the end of June.
Only 30 gateways have been installed so far, Eutelsat spokesperson Joanna Darlington told SpaceNews via email, and the aim is to reach 38 by the second half of 2024, and then deploy the rest over the following six months.
Around 40 gateways are needed for global service, Berneke said on the management call, and gaps include countries such as India and Saudi Arabia where Eutelsat has significant “take-or-pay” contracts for LEO broadband capacity. The take-or-pay contracts require the buyer to accept delivery of LEO capacity once operational or pay a penalty.
LEO delays mean Eutelsat now expects to record revenues for its fiscal year to the end of June between 1.25 billion and 1.3 billion euros ($1.35-1.4 billion) — versus 1.32 billion to 1.42 billion euros previously — mainly driven by the entry into service of two geostationary satellites: Eutelsat 10B and Konnect VHTS.
Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, is now due to come in at between 650 million and 680 million euros for the current fiscal year, 14% lower than previously expected.
Last year, Eutelsat had expected OneWeb to contribute between 125 million and 225 million euros in revenues over the 12 months to June 30, 2024. Most of Eutelsat’s current LEO broadband services are in North America while it waits to expand the network globally.
Previously a geostationary-only satellite operator, France-based Eutelsat acquired the LEO network after buying OneWeb of the United Kingdom in September to diversify its broadband business.
LEO contracts are secure
Berneke said Eutelsat has around 1.15 billion euros worth of LEO business in the pipeline, including a 275 million euro take-or-pay contract from within the group.
These agreements are typically five-year contracts, she said, and are not subject to cut-offs that would be affected by the ground segment delays.
“So I don’t see this at all as melting ice cubes,” she said in response to an analyst’s question.
“Almost the contrary, I think there’s quite a lot of customers right now asking for additional take-or-pay” contracts, she said, adding “we’re in a couple of discussions with customers who’ve taken a first chunk, and now are discussing to increase that.”
She said the LEO business backlog increased by around 150 million euros over the previous few months following a couple more take-or-pay contracts.