France-backed Eutelsat reports stronger revenue in Starlink push

PARIS, Feb 13 (Reuters) - Eutelsat ‌on Friday reported ​better-than-expected ​revenue, bolstered by efforts from France to advance plans for a European competitor to Elon Musk's Starlink, boosting the ‌satellite operator as it pivots to focus on internet ⁠services.

Revenue for the first half of the year ended in December reached 592 million ‌euros ($702 million), surpassing analyst estimates ‌of 581 million euros.

Though it remained loss-making, the company reduced operating losses by 85%.

Eutelsat also slashed net debt by more than ​half after the French state, now its top shareholder, led a 1.5 billion euro rescue last year to stabilise a balance sheet ⁠shaken by a declining video business and rising borrowing costs.

France sees Eutelsat as Europe's only ​viable challenger to Starlink, given its ownership of OneWeb, the only other active satellite network in low Earth ​orbit (LEO).

Those satellites, folded into the group in ‌the 2023 merger with London‑based OneWeb, are used by governments and militaries and have become strategic assets for ⁠national security.

The bet is starting to show early signs of traction even as high costs persist.

Eutelsat said OneWeb's revenue jumped almost 60% and now makes ⁠up about a fifth of group sales, partly outweighing the steady decline of ​legacy broadcasting.

Still, it must replace ageing OneWeb satellites and has secured a state‑backed loan of 1 billion euros to buy 340 new Airbus spacecraft.

Eutelsat also cancelled ‌a satellite order from Thales Alenia Space, trimming its expected full-year capital expenditure to about 900 million euros ‌from an earlier range of up to 1.1 billion.

The company said it ⁠would now proceed with refinancing ‌its bonds, after last ​year's cash call triggered upgrades from credit rating agencies.

($1 = 0.8427 euros)

(Reporting by Gianluca Lo Nostro in Paris; Editing by ‌Matt Scuffham)

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