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Europe’s satellite dreams risk being lost in space

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rocket launch - Malcolm Denemark/Florida Today via AP
rocket launch - Malcolm Denemark/Florida Today via AP

Thierry Breton, the European Commission’s big business tsar, took to the podium to reveal the bloc’s most ambitious grand project. The bespectacled 66-year-old, a veteran of France’s corporate world and a minister under Jacques Chirac, was looking skyward, to the future of Europe’s space policy.

Breton was finally able to reveal Europe’s bid to blanket the skies in low-orbit satellites, Brussels’ rival to SpaceX. “My objective is to go fast,” he told delegates in January, aiming to put the project to a vote before the end of the year.

After gaining ground on the US and China with Galileo, a network of GPS satellites, Europe knows it is falling behind the race for “LEO” – or low-earth-orbit – connectivity. “They are looking with envy at Starlink, OneWeb and the Chinese projects,” says one industry insider.

A consortium of European companies has been assembled to take a first look at the project, reported to be worth up to €6bn (£5.1bn). A Commission spokesman said no budget had been decided.

“The European Commission drove an EU-wide coalition to create Galileo,” says Rupert Pearce, the former chief executive of satellite maker Inmarsat and venture partner at Columbia Capital. “Breton wants to initiate a similar coalition to create a ‘European Starlink’, to continue to keep the Commission in the vanguard of the global space industry.”

An initial €7m has been handed to a pilot study that includes aerospace giant Airbus, rocket firm Arianespace, telecoms firm Orange, as well as satellite operators SES and Eutelsat.

Steve Collar, of Luxembourg-headquartered satellite company SES, says: “We are seeing a recognition of the strategic importance of space, whether that is communications, secure communication, climate change, earth observation or GPS.”

But just a few months after it was announced, Breton’s space vision has been split by a dispute with one of its participants.

Even as it was backing Europe’s project, Eutelsat, the €2bn Paris-based company and the world’s third-largest operator of satellites, was in talks with Britain’s OneWeb over a $550m investment.

The investment was met with dismay by Breton, who has threatened to exclude Eutelsat from the project.

Paris-headquartered Eutelsat has said it is committed to both projects, but Breton appears happy to exclude a major player from his constellation ambitions. A Eutelsat spokesman said: “We do not see any conflict of interest.”

In further confusion, Airbus, which is also a shareholder in OneWeb – partly owned by the UK Government after its rescue last year – and builds the company’s satellites in the US, has not attracted any similar threats from the Brussels bureaucrat.

Breton also needs to nail down a budget among 28 member states. The EU has already allocated €13.2bn for its space budget over the next five years, but the constellation will be in addition to that.

Breton must also “counter the concern that low-earth orbit networks are as yet unproven and may be a technology in search of a decent business case”, Pearce says.

Rival constellations have costs ranging into the tens of billions of dollars. Elon Musk has pegged the cost of Starlink, which will ultimately include thousands of satellites, at $30bn.

Elon Musk - Hannibal Hanschke-Pool/Getty Images
Elon Musk - Hannibal Hanschke-Pool/Getty Images

The EU is not expected to spend that much, with Bloomberg reporting a cost of about €6bn. Sources expect the project to include 100 to 200 low orbit satellites, below 1,000km, augmented by other satellites at higher orbits.

Despite the prospect of more heavy spending, France is likely to be keen to back an initiative that pumps funding towards its own companies, such as Airbus, Thales and Orange.

Insiders say member states are broadly supportive, although they admit Breton is some way off securing the funding he needs.

The EU still has heavyweight corporations on board, all of whom are keen to jump start their own responses to Elon Musk’s Starlink, which has already begun to serve thousands of customers across Europe.

There could be another thorn in the Commission’s plan. While Breton has disowned Eutelsat and its investment in OneWeb, the UK firm has been eyeing Europe’s plans.

The operator’s biggest backer, Indian billionaire Sunil Mittal of Bharti Global, is understood to have written to the European Commission expressing an interest in collaborating on the EU constellation.

Project sources believe the EU wants a “sovereign” capability and any involvement from OneWeb is likely to be “difficult”.

The EU’s project is already well behind Starlink, which has 1,800 satellites in orbit, OneWeb and even Amazon’s Project Kuiper, which has yet to launch a satellite into space. But this may not be all bad.

Shagun Sachdeva, founder of space consultancy Kosmic Apple, says: “They cannot meet Starlink or even OneWeb’s timing. However, the benefits from not being first in the market is that they can learn and take advantage of economies of scale that will lead to prices coming down.”

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