Europe satellite sector gains urgency as Starlink reliance risks deepen

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Europe satellite sector urgency

Highlights

European policymakers are intensifying focus on alternatives to Starlink as concerns grow over Ukraine's access and allied control of communications infrastructure.
Eutelsat and SES are identified as medium-term alternatives, while the EU-backed Iris2 satellite network, costing 15.6 billion euros, will not be operational until at least 2030.
Europe faces significant investment and regulatory hurdles to reduce reliance on SpaceX, with interim solutions hinging on projects like Eutelsat’s expanded OneWeb and potential partnerships with Telesat and Amazon.

Alternative networks draw fresh strategic focus

As reported by Bloomberg, citing BusinessWorld Online, concerns over possible limits on Ukraine's access to Starlink are intensifying debate in Europe over who controls critical communications infrastructure during conflict. The issue is pushing policymakers to look more closely at existing non-SpaceX satellite options, even though their current scale remains well below Starlink's.

Paris-listed Eutelsat Communications and SES are among the companies seen as the most viable medium-term alternatives if European governments seek to reduce reliance on Elon Musk's SpaceX. Bloomberg Intelligence analyst John Davies says those operators have less capacity and bandwidth than Starlink, but they are still better placed than most rivals if official demand shifts toward allied-controlled networks.

The EU is also backing a broader sovereign response through Iris2, a planned 15.6 billion euro satellite network supported by the recently recapitalized Eutelsat and other continental groups. Officials could also accelerate approvals for cross-border industrial projects such as Project Bromo, which involves Leonardo, Airbus and Thales, while giving greater weight to telecoms sovereignty in policy decisions.

Investment gaps and political risks remain

Europe still faces a long timeline before it can mount a meaningful challenge to SpaceX across launch, satellite deployment and network scale. Iris2 is not expected to become operational until at least 2030, underscoring how far the region remains from matching the reusable-rocket model that has helped SpaceX expand rapidly.

Eutelsat's existing OneWeb low-Earth orbit constellation could offer a nearer-term partial answer if it is expanded with more portable military-ready terminals. That would likely require additional funding and manufacturing support from the company's French and UK government backers, especially as Eutelsat remains unprofitable and exposed to a declining satellite television business.

Europe may also need to combine autonomy goals with outside partnerships. Possible counterparts include Canada's Telesat, whose Lightspeed network is due online next year, and Amazon, which is launching a commercial satellite service this year and is also linked to Europe through Arianespace launches.

Francesco Nicoli, associate professor at the Politecnico Institute of Turin, says closer ties could reduce dependence on Musk and potentially support cooperation in rocket production. He also suggests regulators could push for terminal interoperability, although any attempt by the EU to reserve parts of the telecoms market for local operators could provoke trade retaliation from the U.S. and expose the bloc's wider dependence on American technology.

Our earlier coverage on sovereign resilience in a higher-rate environment explained how prolonged geopolitical tensions and elevated public spending are increasing borrowing and refinancing risks for governments. We noted that the Russia-Ukraine conflict and the war in the Middle East have helped keep energy and food prices high, feeding inflation and tightening fiscal headroom—pressures that can spill over into strategic policy choices.

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