Eutelsat: Orbiting Opportunity

Eutelsat-OneWeb now runs the only commercial LEO satellite network outside of SpaceX. The network is fully operational, with ambitions to grow revenues from €180m in FY25 to ~€850m by FY29. This gives Europe critical autonomy in space-based connectivity, and investors rare exposure to a true global LEO operator.

The EU's €6.5bn IRIS² program is a sovereign space initiative, and Eutelsat is its largest private backer. As the exclusive commercial LEO partner, Eutelsat will earn long-term contracted revenues while retaining sellable bandwidth. This “public-private” model gives downside protection and upside optionality, an enviable mix for infrastructure investors.

The French state just subscribed to €526m of new equity at €4/share, a 30% premium to market, while Eutelsat simultaneously secured a €1bn, 10-year defense contract. With both capital and customers from sovereign sources, Eutelsat may now be considered part of the EU’s “strategic autonomy” framework, a powerful moat in a geopolitically unstable world.

• Capital raise verdict: Closing of the roughly €1.35bn capital increase by Q4 2025 would validate sovereign sponsorship and extend runway for Gen-1 continuity. Slippage would reignite balance sheet worries.

• Sovereign bloc watch: Final clarity on UK and CMA CGM participation could push sovereign and strategic stakes toward a near-40 percent bloc, sharpening the “strategic autonomy” lens or, if absent, denting confidence.

• IRIS² milestones: satellite procurement, manufacturing awards, and EU updates ahead of 2030 service entry will act as sentiment checkpoints, with on-time progress likely to compress risk premia. Misses would do the opposite.

• LEO commercial proof points: larger contracts in mobility, enterprise and government plus pricing resilience would validate OneWeb’s thesis against Starlink and Kuiper. Weak order flow would delay the pivot to self-funded growth.

• IRIS² service start around 2030: at least €6.5bn concession revenues over 12 years plus exclusive resale rights can reshape the earnings mix toward contracted sovereign-grade cash flows.

• Geopolitics and sovereignty: if Europe leans harder into secure multi-orbit connectivity, Eutelsat’s status as a champion could support valuation multiples closer to strategic infrastructure.

Despite the €1.35bn capital raise, Eutelsat still faces a total of €4bn in planned capex, €2bn to expand the existing Gen-1 OneWeb network and another €2bn for IRIS² deployment starting FY28. With negative free cash flow expected through at least FY27, the business remains financially stretched and vulnerable to execution delays or cost overruns.

OneWeb has yet to demonstrate strong commercial traction, especially relative to Starlink’s early dominance. While management forecasts rapid revenue growth from LEO, current market visibility remains limited. If uptake lags or new competitors like Amazon’s Kuiper gain share, Eutelsat’s LEO growth assumptions may prove overly optimistic.

Eutelsat’s core video broadcasting segment, still a large part of its revenue base, is in structural decline. FY26 guidance implies flat total revenue growth, with LEO gains largely offset by erosion in GEO business lines. Without faster-than-expected LEO or IRIS² ramp-up, the overall top-line may stagnate.