Billion-euro merger: EU Commission examines Intelsat takeover by SES
The EU regulatory authorities want to find out whether Starlink is a serious competitor for SES and Intelsat – and are therefore sending out questionnaires.
(Image: Andrey Armyagov/Shutterstock.com)
The EU antitrust authorities, which are investigating the takeover of Luxembourg satellite operator Intelsat by competitor SES, have asked customers of both companies whether the ultra-fast satellite internet Starlink from US space company SpaceX is "a serious competitor" for both. This was reported on Tuesday by the news agency Reuters.
According to the report, the responses, which are to be received by Monday next week, will determine whether the EU Commission approves the deal with or without concessions. If the Commission has serious concerns about the takeover, it could also initiate a comprehensive investigation, according to the report. The EU Commission has set June 10 as the date for its preliminary examination.
Questionnaire from the EU competition authorities
In the questionnaire sent out, which could be viewed by Reuters, the EU competition authority wants to know, among other things, whether satellites in low earth orbit such as those of Starlink and OneWeb/Eutelsat are serious competitors for the provision of two-way satellite capacity. Two-way satellite internet is a form of connection in which the outward and return channels (downstream and upstream) are established via a satellite.
The survey also asks whether providers of low-Earth orbit satellites participate in and win tenders and customer contracts, and how they will influence competition over the next five years. Customers are also asked whether they have the bargaining power to secure favorable terms when purchasing two-way satellite capacity from SES and Intelsat, and whether they can easily switch to a competing provider. It remains unclear to whom exactly the questionnaire was sent.
Merger worth billions
Like Intelsat, SES is based in Luxembourg. Together, the two companies have more than 100 satellites in geostationary orbits and a further 26 in medium earth orbits. These are classic communications satellites that cover entire countries or continents and provide broadband Internet and satellite television, for example. SES and Intelsat are therefore among the largest satellite operators in the world. Only OneWeb/Eutelsat and SpaceX have more satellites thanks to their internet satellites, albeit in lower earth orbits.
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Last year, SES and Intelsat agreed a EUR 2.8 billion takeover after merger talks between the two companies had failed the previous year. The merger would create a stronger operator of satellites in different orbits that would be more resilient in a rapidly changing market, offer more diverse solutions and have more resources at its disposal, according to a statement from SES a year ago.
Movement in the satellite market
The merger of SES and Intelsat is becoming more concrete at a time when the EU is looking for European options for commercial and military satellite communications. It wants to become less dependent on US satellite operators and, above all, on billionaire Elon Musk's Starlink satellite internet. The background to this is growing concern about technological and security policy dependency, particularly on Washington, but also on Beijing.
The market is on the move. The French satellite operator Eutelsat and the British-Indian satellite internet company OneWeb agreed on a merger in mid-2022. The EU Commission is offering Ukraine, for example, Eutelsat as an alternative to Starlink for securing capacity for satellite communication. Recently, a surprising change of leadership at the top of Eutelsat also made headlines.
(akn)
