Intelsat inks $500 million deal with Eutelsat

Essentially, the deal will allow Intelsat to combine the OneWeb LEO network – owned by Eutelsat for the past six months – with its own geostationary orbit (GEO) and terrestrial networks to broaden its service offering.

It builds on an existing partnership signed by the pair in March last year, another multi-orbit deal covering Europe, the Middle East and the Pacific. Clearly that deal has served Intelsat well for the past year. The new deal will increase and further integrate LEO capabilities into Intelsat's service offering, both for its existing customer base and potential future customers.

"We've been partnering with Eutelsat for quite some time now, leveraging its OneWeb LEO constellation to offer a multi-orbit solution, primarily in commercial aviation," said Dave Wajsgras, CEO of Intelsat, in a statement.

"We're now seeing so many additional opportunities for customers to benefit from multi-orbit solutions. We believe it's in Intelsat's interests, Eutelsat's interests, and our customers' interests for us to expand the partnership that's already in place – one that is working well and has strong demand," Wajsgras said.

That explains why we're talking about fairly hefty sums of money.

The seven-year deal kicks in in mid-2024. Intelsat has made a firm commitment of $250 million, which includes the $45 million deal from last year, and has the option of adding a further $250 million by the end of the period, Eutelsat explained in a separate announcement.

"This expanded partnership with Intelsat represents a strong vote of confidence in the capabilities of the OneWeb satellite constellation, today and well into the future, as well as showcasing the necessity in today's world for major satellite operators to be able to offer multi-orbit solutions to their customers," said Eva Berneke, CEO of Eutelsat Group.

"We are also delighted to further deepen our collaborative approach with Intelsat going forward, leveraging its unparalleled experience in the key verticals of aviation and government," she said.

In addition to Intelsat making greater use of the OneWeb network, and providing that aviation and government experience to Eutelsat, the deal also covers the ongoing development of OneWeb.

The companies did not share specifics, but noted that Intelsat will work with Eutelsat to assist in the development of the OneWeb constellation. It seems Intelsat will have some input into both the design and functionality of the new constellation as part of its role as one of OneWeb's major users.

This deal is clearly beneficial to both parties and is very much a sign of the times when it comes to the growing satellite market. We have been through a spate of mergers and acquisitions in satellite – some of which came to fruition while others did not – and it's pretty clear that collaboration will be the name of the game as the market develops.