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EU to take on SpaceX and Amazon with its own satellite internet system

The EU is to launch plans for a multibillion-euro satellite internet system to compete with the likes of Amazon and SpaceX despite previous objections from its internal watchdog.

Brussels’ initiative to provide encrypted broadband coverage will be unveiled on Tuesday in amended form after proposals were twice rejected by the European Commission’s Regulatory Scrutiny Board. The board – which vets impact assessments for proposals put forward by the commission – believed the scheme would waste money and compete with commercial services, according to EU officials.

The Secured Communications initiative has been put forward by Thierry Breton, the internal market commissioner, who wants the EU to build a third satellite system in lower earth orbit (LEO) for secured communications and access to the internet. The EU already has Galileo, a global navigation system, and Copernicus, which is used for earth observation.

The signal from the new system would be encrypted and offered to Europe and Africa to give that continent an alternative to Chinese-built infrastructure. It would also provide a backup in case of cyber attacks.

Breton told French TV channel BFM on Monday that the EU needed a sovereign system with encryption that governments and companies could use.

“It is indispensable that Europe has its own constellation and does not depend on the Americans and Chinese,” he said. “It will run north-south and secure our communications in case of cyber attack. It has a military and sovereign dimension. We can offer connectivity to the continent of Africa. ”

The commission’s scrutiny board rejected the impact assessment for the project twice, according to two people familiar with the situation, on the basis that other options had not been fully considered. This in effect ruled out cheaper options such as renting space on a commercial provider’s network or using an earth-based system.

Some amendments were made following the rejections with a commitment to involve small companies in the design and building of the system to boost the EU space industry. Businesses will be asked to provide € 2bn of the initial investment in a public / private partnership.

It is rare for a project to be rebuffed twice from the commission’s own watchdog and a scheme would usually be blocked unless Maros Sefcovic, vice-president of the commission for interinstitutional relations, agreed to take it forward. The commission declined to comment on internal procedures.

One EU diplomat said although several member states had reservations they believed the plan would receive approval.

The commission contracted companies including Airbus, SES and Eutelsat to carry out a technical study for the project. The running costs are significant, with LEO satellites needing replacement roughly every five to seven years.

The EU conceived the idea after the UK bought a stake in OneWeb, the satellite operator, in 2020. Last year Eutelsat, in which the French government has a stake, invested in OneWeb, causing Breton to question whether Eutelsat could take part in the EU project.

SpaceX, owned by Tesla founder Elon Musk, has launched close to 2,000 satellites under the Starlink name and has applied for licenses to fly more than 40,000.

Amazon’s Project Kuiper will comprise more than 3,000 satellites.

The EU intends to offer services to consumers in remote places without broadband. But Starlink heavily subsidizes the hardware needed to receive it, charging $ 499 at a cost at least four times that. Broadband costs $ 99 a month in the US, around double the price of fiber.

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