Elon Musk’s Space Push has major Satellite Rivals looking to merge

Elon Musk and Jeff Bezos are pioneers in the Space sector that has gained a lot of traction over the past year. The Billionaires are going to be launching thousands of satellites into orbits and the thought of this manifesting itself into reality has the other players in the industry looking to partner up with one another for consolidation.

Elon Musk’s SpaceX is working on providing broadband internet service through Starlink by launching its own satellite that will enable worldwide connectivity. Companies such as SES SA, the world’s second-biggest satellite operator in terms of sales view this as a threat to their business. The growth of streaming over fiber optic networks threatens another of their mainstays, Satellite TV.

Takeover, Investments, and Joint Ventures in the space industry have already surpassed 2020’s total amount, with over $3.6 billion spent so far in 2021 according to a report from Bloomberg.

SES Chief Executive Officer, Steve Collar said, “I’m sure everyone’s talking to everyone.” Space is “essentially a fixed-cost industry, so the scale that’s generated from consolidation can be important financially. And obviously, we’ve also seen some disruptors coming into the industry. That can also be a catalyst,” he said in an interview.

UK satellites 1047003 Elon Musk's Space Push has major Satellite Rivals looking to merge

ViaSat Inc. Chairman Mark Danberg said there “certainly is discussion” in the industry with respect to mergers.” One of the reasons for consolidation would be to try to divert more capital funding from broadcast into broadband.”

Despite industry executives downplaying the threat from Musk, they are adapting. Companies such as Inmarsat Holdings Ltd., ViaSat, Eutelsat SA, and Telesat LLC intend to launch high-throughput or low-latency satellites to offer their own broadband services to businesses and homes.

But each launch is an expensive bet that clients won’t defect to a cheaper alternative the very first chance they get. Mergers would make these rollouts less risky and more efficient.

The UK’s largest satellite company, Inmarsat, “is likely to have many interested dance partners,” its Chief Executive Officer Rajeev Suri told Bloomberg last month in an interview about his plans for a new network with similar low-earth orbit technology to Starlink.

Musk’s Space Exploration Technologies Corp. was valued by investors at $74 billion. In 2020, analysts at Morgan Stanley said that Starlink made up to four-fifths of SpaceX’s value which made it roughly worth double the combined value of the world’s largest listed satellite companies.

BLUE ORIGIN NEW SHEPARD CREW CAPSULE Elon Musk's Space Push has major Satellite Rivals looking to merge

“Eutelsat and SES were the giants but now, compared with the potential of Elon Musk and Amazon to invest in this industry, they are very very small, and they don’t have the leadership in new technologies,” said Kepler Cheuvreux analyst David Cerdan.

He said that Eutelsat should merge with SES if the country’s respective governments can agree over control, as they share the common issue of shrinking broadcast-TV income.

Corporate rivalries and political sensitivities have always been a speed-bump to satellite mergers. While the largest companies came close to consolidating in the past few years, large tie-ups have fallen through at the last moment.

Billionaire Charlie Ergen’s EchoStar made a bid for Inmarsat in 2018 and so did France’s Eutelsat, the company was ultimately acquired by a group of private equity funds and pension funds.

Funds for more deals are coming, with SES and Intelsat SA in line to receive a combined $9 billion for relinquishing airwaves for US companies to use. The funds that acquired Inmarsat in 2019 received delayed spectrum payments of $700 million last year, lowering the bar for them to make a return on the $3.4 billion buyout price.

The industry’s newly gained appetite for partnerships has already benefitted Musk’s UK rival OneWeb, which has launched hundreds of small, low-earth-orbit satellites and has the global right to airwaves. It’s attracted a consortium of owners including Eutelsat and Ergen’s Hughes Network Systems.

Intelsat tried to buy OneWeb as early as 2017, but it is currently held back from making deals as it is going through bankruptcy.

OneWeb’s CEO Neil Masterson told Bloomberg that he wants the company to be in the strongest position for an “inevitable restructuring” of the sector.

Source: Bloomberg

Also read:

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More like this

Incredible Elon Musk Net Worth: All You Need to...

Elon Musk Net Worth in 2025: Everything You Need to Know Elon Musk, the founder of Space X...
SpaceX's Fram2 Mission: First Astronauts to Fly Over Earth's Poles Next Week!

SpaceX’s Fram2 Mission: First Astronauts to Fly Over Earth’s...

SpaceX is once again pushing the boundaries of space exploration! On March 31st, the aerospace giant will...
Starlink

Starlink’s India launch faces security hurdles: What’s Next for...

Elon Musk’s Starlink, the satellite internet provider under SpaceX, is set to enter the Indian market with...

Cosmic Homecoming! Sunita Williams and Butch Wilmore’s Epic 286-Day...

In a triumphant return that captivated the world, NASA astronauts Sunita Williams and Butch Wilmore have safely...
Starlink

Starlink’s Indian Odyssey: A Game-Changer for Digital Connectivity

Starlink's Indian Odyssey: Hey there, tech enthusiasts and internet dreamers! Buckle up, because we're about to dive...

LATEST NEWS

Master Guide: How to Solo Defeat Aqua Breed Paldean Tauros in Pokemon GO

The Stunning Styles event has brought an exciting new challenge to Pokemon GO with the debut of Aqua Breed Paldean Tauros, a formidable 3-star...

Unleash the Healing Power: Complete Pokemon GO Mega Audino Raid Day Strategy Guide for April 5, 2025

The Pokemon GO universe is about to welcome a significant addition to its Mega Evolution roster as the adorable healer Pokemon makes its grand...

PBKS vs RR Dream11 Prediction IPL 2025: Expert Fantasy Tips, Playing XIs & Match Analysis

The electrifying atmosphere of IPL 2025 continues to captivate cricket enthusiasts as Punjab Kings prepare to host Rajasthan Royals in Match 18 at the...

CSK vs DC Dream11 Prediction IPL 2025: Ultimate Fantasy Guide and Expert Picks for Chennai Super Kings vs Delhi Capitals Match 17

As the IPL 2025 season heats up, cricket enthusiasts and fantasy players alike turn their attention to the 17th match of the tournament, featuring...

Featured