Investors are increasingly concerned about the state of finances at Europe’s two giant satellite operators, SES and Eutelsat, according to a report in the FT.“The cost of buying insurance against France’s Eutelsat and SES of Luxembourg defaulting on their bonds has soared to record highs, as investors fear the two will struggle to repay their debts, which together amount to about €7 billion,” said the report.The damage is being caused by Elon Musk’s Starlink broadband system which has won an increasingly large slice of business from the world’s maritime fleets and airlines and their In Flight Communications services. One deal saw Starlink secure an Air France contract and elbowing out Eutelsat in the process.“Europe’s incumbents are in danger of being left behind,” said one high-yield credit investor who has recently sold out of Eutelsat’s bonds, quoted by the FT.In December, the European Union committed to a €10.6 billion project to develop a European satellite network to rival Musk’s Starlink, with 61 per cent funded by Europe and bodies such as the European Space Agency, and the rest coming from the SpaceRise industrial consortium, led by Eutelsat, SES and Spanish operator Hispasat.The problem is that the EU project will not be ready to operate until 2030 at the earliest, by which time Starlink – and perhaps the Jeff Bezos-funded Project Kuiper – will be extremely well established.Meanwhile, SES and Intelsat have submitted their data and general responses to the FCC in support of their plans to combine their businesses. The submission happened on Day 161 of the FCC’s mandated 180-day timetable for review.
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