Eutelsat stock has surged over 500% this week, adding more than $3B in market cap, driven by expectations of increased usage and a priority on EU defense.
Friday’s dust-up with Zelenskyy and Trump in the Oval Office set the stock in motion. Trump’s subsequent freeze of military aid to Ukraine, prospects of the EU ramping up defense funding, and the bloc weaning off Starlink then added fuel to the fire.
“We are actively collaborating with European institutions and business partners to enable the swift deployment of additional user terminals for critical missions and infrastructure,” a Eutelsat spokesperson told Payload in a statement.
The company also pointed out that its 630-satellite strong OneWeb LEO service already supports comms in Ukraine.
Hooked on Starlink
Adoption of Starlink satellite connectivity has rapidly proliferated throughout Europe over the past three years, becoming a key tool for Ukraine in its fight against Russia. In 2024, Ukraine was reportedly using roughly 42,000 terminals to support war efforts.
But now that Starlink connectivity faces uncertainty.
- Reuters reported last month that US officials may use Starlink as leverage in negotiations with Ukraine. Starlink denies these claims of wavering support, writing on X, “Starlink is fully committed to providing service to Ukraine. Any rumors to the contrary are categorically false.”
- The heightened US and EU geopolitical tensions on display this week threaten further defense funding and technology collaboration.
€800B boom: Regardless of how Starlink and US support shakes out, one thing is clear: the EU no longer believes it can fully rely on the US for defense support. Yesterday, the European Commission proposed investing a staggering €800B ($861B) over the next four years to support various defense programs.
One of those key programs will be beefing up the capability of satellite comms.
- Christophe Grudler, a French member of the European Parliament involved in the IRIS2 constellation, wrote in a letter to the EU, “I urge the European Commission to immediately take measures to evaluate all alternative satellite solutions that the EU could offer to Ukraine if this threat were to materialize.”
Eutelsat steps up: “Over Europe, Eutelsat offers the same capabilities as Starlink in terms of coverage and latency,” a Eutelsat spokesperson told Payload. While the company’s OneWeb LEO constellation may be able to achieve sufficient latency, it’s unclear if it will be able to handle all the capacity needed in the region or if increased OneWeb utilization would be mainly supplementary to Starlink.
To add more sovereign capacity, Europe will build IRIS2, a €10.6B ($11.6B) multi-orbit constellation, of which Eutelsat will be a key provider. But IRIS2 won’t be ready for 5 years.
OneWeb has 630 satellites and is investing in its next-generation OneWeb constellation to support further capacity. However, given the business’s heavy debt burden and financial position, the company is taking a ‘progressive approach’ to the build-out in order to smooth out its capex requirement.
Starlink, on the other hand, has over 7,000 satellites and can support many times more capacity than Eutelsat, which could present an issue for EU officials to move off the service.
Eutelsat Financials
Despite the 550% surge this week, the stock is down 25% over the last five years. Investors bailed on the satcom provider en mass after weighing Starlink’s rapid adoption and the company’s €2.7B of debt.
Eutelsat reported reported half-year earnings last month. For the six months ending Dec. 31:
- Revenue: €606m ($653M), a 4.4% proforma YoY increase
- Operating income: -€790M (-$851M)
- Liquidity: €1.2B ($1.3B) of cash and undrawn credit lines
- Debt: €2.7B
But things are on the up-and-up-and-up: last week, the company’s market cap was just $500M. Today, it is $3.7B.
