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Fixed satellite service provider Eutelsat agrees $500 million partnership deal with Intelsat

The logo of the European satellite operator Eutelsat is pictured at the company's headquarters in Issy-les-Moulineaux

(Reuters) - France-based fixed satellite service provider Eutelsat Group said on Tuesday it has signed a seven-year $500 million agreement with Intelsat for its OneWeb Low Earth Orbit (LEO)constellation.

The deal, which will commence in mid-2024 with a $250 million commitment, has an option of a further $250 million, the company said.

The partnership will enable the company to integrate OneWeb's LEO network with its Geostationary Equatorial Orbit (GEO) and terrestrial networks, Eutelsat added.

"Today's announcement takes that partnership to a new level, enhancing our ability to offer new, true multi-orbit services and solutions across our portfolio of customers and business segments," Intelsat's chief executive officer, Dave Wajsgras, said.

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The Eutelsat Group was formed through the merger of Eutelsat and OneWeb in 2023, becoming the first fully integrated GEO-LEO satellite operator with a fleet of 35 GEO satellites and a LEO constellation of more than 600 satellites.

The group in January cut its targets for its 2023-2024 financial year as OneWeb's LEO activities were running behind schedule, fueling concerns that rivals such as Elon Musk's Starlink and Amazon's Project Kuiper could beat OneWeb to the punch.

Eutelsat confirmed OneWeb's ground roll-out was on track to reach 90% coverage by mid-2024.

(This story has been refiled to add the dropped word 'million' in paragraph 2)

(Reporting by Devika Nair in Bengaluru; Editing by Alan Barona)