Delays to the ground network rollout for OneWeb’s Low Earth Orbit (LEO) satellite constellation and other factors have prompted recently merged Eutelsat Group to cut its fiscal year 2023-2024 earnings guidance and suspend its fiscal 2025 guidance.
“The results of the LEO activities of OneWeb, while progressing well, with 100% of the satellites in place and a backlog of $1.1 billion at the end of the last quarter, are running behind schedule relative to the original roadmap,” Eutelsat Group revealed in a trading update today.
“This reflects delays in the availability of the ground network, as well as a revenue mix more oriented than expected towards the sale of user terminals, which impacts margins. The delay in the ground network impacts revenues, especially in mobility and in certain geographies where market access is still outstanding,” added the Group, which was formed last fall when French satellite operator Eutelsat merged with London-headquartered OneWeb.
In the mobility vertical of inflight connectivity, OneWeb is a key partner to both Intelsat and Panasonic Avionics, which intend to use the LEO satcom service to support multi-orbit IFC for airlines, as complemented by their respective GEO satellite network capacity. In business aviation, Gogo and Satcom Direct have each partnered with OneWeb to deliver LEO-only IFC solutions for business aircraft.
OneWeb previously planned to introduce its commercial aero service in 2023, but its satellite launch schedule was interrupted following Russia’s invasion of Ukraine in early 2022. It subsequently delayed its aero service launch until “early 2024“.
It’s not immediately clear when OneWeb’s aero service will enter revenue service on aircraft. But if 90% of the ground network is largely completed in the second quarter — per Eutelsat Group’s fresh guidance — a 2024 launch may still be in the cards.
Following a post-merger three-month assessment, Eutelsat Group said today that its legacy Eutelsat business remains on track to return to top line growth for fiscal 2023-2024, mainly driven by the entry into service of satellites EUTELSAT 10B and KONNECT VHTS.
But given the aforementioned OneWeb delay, full fiscal year group revenues are now expected to be in a range of EUR 1.25 billion to EUR 1.3 billion versus a previous range of EUR 1.32 billion to EUR 1.42 billion.
Adjusted EBITDA has also been reduced to a range of EUR 650 million to EUR 680 million.
Eutelsat Group added that management remains confident in the prospects of OneWeb and the potential of Eutelsat Group’s own unique combined GEO/LEO offer. “As the [OneWeb] constellation achieves full global operational coverage, we anticipate an acceleration in revenues and continue to target double-digit CAGR in revenues and Adjusted EBITDA between FY 2024 and FY 2028.”
Intelsat and Panasonic, meanwhile, have each been preparing for a 2024 service launch for their respective multi-orbit inflight connectivity solutions, with Panasonic eyeing a late 2024 EIS. Both firms are using an electronically steered antenna, and are partnered with Stellar Blu Solutions on the ESA package.
In a conversation last August with Panasonic VP product management, portfolio management and marketing Andy Masson, OneWeb vice president of mobility Ben Griffin noted that the timeline for OneWeb’s activation in aviation would be dictated by certification of the aviation terminal, likely in the March/April 2024 timeframe.
Intelsat, which has already announced several customers for its ESA connectivity, including Alaska Airlines, Air Canada, American Airlines and Aerolíneas Argentinas, recently confided to Runway Girl Network that it will conduct a prototype installation in February on its CRJ700 testbed aircraft “for credit” to support supplemental type certification work.
In business aviation, Gogo’s LEO-focused service will be supported by Hughes Network Systems’ ESA. Hughes has been working against a 2H 2024 timeline for flight-testing and serial production. Satcom Direct is planning for a 2025 entry.
Separately today, Airbus US Space & Defense, Inc. announced completion of a deal with Eutelsat OneWeb to purchase its 50% share of the Airbus OneWeb Satellites (AOS) joint venture, which manufactures the OneWeb Ku-band LEO satellites. Airbus is now the sole owner of AOS and the satellite manufacturing facility in Merritt Island, Florida, it said.
Related Articles:
- One-on-one with ST Engineering iDirect as multi-orbit IFC accelerates
- Intelsat shares color around multi-orbit aero ESA
- Panasonic’s Wade on how OneWeb LEO differentiates in aero
- Key attribute of Stellar Blu ESA package could ease Boeing linefit
- OneWeb postpones inflight connectivity service launch to early 2024
Featured image credited to istock.com/Pollyana Ventura
