Global satellite operator Intelsat has agreed to buy more capacity from Eutelsat’s OneWeb’s LEO satellite constellation to expand Intelsat’s multi-orbit business strategy and cash in on growing demand for LEO connectivity.
Under a partnership deal announced on Tuesday, Intelsat said it will combine Eutelsat OneWeb’s LEO satellite constellation with its geostationary satellite and terrestrial network offerings to deliver “comprehensive customer solutions supporting networks, government, and mobility sectors.”
The deal, which will commence in the middle of this year, is valued at up to US$500 million over seven years, with a firm commitment of US$250 million now and an optional US$250 million by the end of the contract period.
The initial US$250 million includes the US$45 million multi-orbit agreement signed by Eutelsat and Intelsat in March last year. Under that deal, Intelsat integrated OneWeb services and Eutelsat’s geostationary high-throughput capacity to support mobile connectivity solutions over Europe, the Middle East, and the Pacific. The new deal expands that coverage globally.
“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 Intelsat CEO Dave Wajsgras 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.”
Meanwhile, Intelsat will cooperate with Eutelsat to provide direct design and functionality input in the development of its next-generation OneWeb constellation, which will start replacing the original LEO satellites as they reach the end of their life around 2027 and 2028.
“This expanded partnership with Intelsat represents a strong vote of confidence in the capabilities of the OneWeb constellation, today and well into the future, and it showcases the necessity in today’s world for major satellite operators to have the ability to offer multi-orbit solutions to their customers,” said Eutelsat Group CEO Eva Berneke.
Demand for satellite broadband connectivity has been on the rise over the past couple of years as LEO players like OneWeb and SpaceX’s Starlink have come on the scene. Emerging markets in particular have been striking deals with various existing and upcoming satellite players in hopes of bridging the digital divide.
That said, Intelsat sees plenty of demand for LEO satellite connectivity and multi-orbit solutiions in its vertical customer base. According to Space News, Intelsat's Wajsgras said the company has won more airline business with a multi-orbit offering over the last three years combined than it ever did with its geostationary-only offering.
In an interview with Space News, Wajsgras said Intelsat is “seeing demand signals that actually could exceed half a billion dollars” over the contract period.