EU Queries SES, Intelsat Customers Over $3.1bn Merger

The European Commission has said it plans to decide by 10 June whether to clear a $3.1 billion (£2.4bn) acquisition by satellite company SES of competitor Intelsat in an effort to create a large European competitor to the likes of SpaceX’s Starlink or Amazon’s Project Kuiper.

Intelsat is one of the world’s largest satellite operators, with a fleet of 52 communications satellites as of June 2022, while SES operates more than 70 geostationary and medium Earth orbit (MEO) units, including European television broadcast satellites and O3b mPOWER data satellites.

The companies, both based in Luxembourg, have been in talks for a potential acquisition of Intelsat since at least March 2023, before announcing the current deal in April of last year, saying at the time that the deal was expected to conclude in the second half of 2025.

Competition questions

The Commission, which has been examining the acquisition, has sent questionnaires to the two companies’ customers asking whether Starlink is a credible rival to them, Reuters reported.

The responses are intended to inform the Commission’s decision on whether to approve the deal without concessions or to launch a four-month full investigation.

The questionnaire reportedly asks whether low-earth orbit (LEO) satellites such as those operated by SpaceX and Eutelsat’s OneWeb are credible competitors to two two-way satellite capacity offered by SES and Intelsat.

The Commission also asked whether LEO satellite suppliers are taking part in tenders and winning customer contracts and how they will affect competition in the next five years.

Customers were asked whether they have sufficient negotiating and bargaining power to secure favourable terms and conditions when purchasing two-way satellite capacity from SES and Intelsat and if they can easily switch to a competitor.

European countries have been seeking alternatives to American suppliers in areas such as satellite communications and defence with the arrival of a US administration seen as volatile and difficult to work with with.

European alternatives

In April then-chief executive of Eutelsat Eva Berneke said the German government had been paying for Ukraine’s access to Eutelsat satellite-based internet services for about a year to provide an alternative to Starlink, Ukraine’s primary satellite-based internet provider, which operates about 50,000 Starlink terminals in the country.

The number of Eutelsat terminals in the country is much smaller, at fewer than a thousand, Berneke said at the time.

Earlier this month Eutelsat appointed telecommunications veteran Jean-François Fallacher as its new chief executive, taking over from Berneke, who had overseen Eutelsat’s takeover of UK-based OneWeb, in what Eutelsat described as part of the next phase of integration with OneWeb.

OneWeb is building a 648 LEO satellite fleet to deliver high-speed, low-latency broadband connectivity, covering the UK, Alaska, Northern Europe, Greenland, Iceland, the Arctic Seas and Canada.