French satellite operator Eutelsat has announced its intention to establish a company to provide terrestrial satellite communications services worth approximately €790 million ($863 million).
The world's largest satellite operator by turnover also plans to sell most of its teleport services business to a private equity firm run by Sweden's EQT Partners.
Negotiations to sell 80% of its earth station-as-a-service business, including land, buildings, antennas and other infrastructure assets, began after Eutelsat announced outside investors were interested in creating a company focused on network infrastructure investments. This transaction is aimed at strengthening the financial profile of the operator of geostationary and low-orbiting satellites.
“We are proud to be the first satellite operator to embark on this innovative transaction, which will allow us to leverage a model adopted by other industries and optimize the cost of our extensive terrestrial network,” said Eutelsat CEO Eva Bernecke.
Eutelsat plans to remain a long-term shareholder, major tenant and partner of the new infrastructure company.
Eutelsat is looking to acquire the business of telecommunications company OneWeb to tap into the growing market for low-Earth orbit communications services.
Terrestrial satellite services will begin next spring once the last eight of 45 gateways have been deployed, Eva Bernecke said. Due to delays in the rollout of OneWeb's ground segment, Eutelsat expects to post roughly flat total revenue from its four operating verticals rather than growth in the next fiscal year.
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