French satellite operator Eutelsat—often dubbed Europe’s answer to Elon Musk’s Starlink—saw its shares tumble on Wednesday after a Reuters report confirmed that Japanese conglomerate SoftBank has reduced its stake in the company.
At 6:00 a.m. ET, Eutelsat stock was down 7.8%.
According to the filing, SoftBank sold 36 million rights, equivalent to roughly 26 million shares, slicing its ownership in half.
Eutelsat owns OneWeb, the satellite‑internet provider it merged with in 2023 as part of a strategy to challenge Starlink’s market dominance. Despite the high‑profile partnership, the combined entity has struggled to capture significant market share in the United States.
Today the French group operates more than 600 satellites, while Starlink fields over 6,750—a stark contrast that underscores the scale gap between the two rivals.
After a meteoric rally of more than 600% in early March—fuelled by a wave of European “tech‑sovereignty” initiatives following the U.S. reduction of military aid to Ukraine—Eutelsat’s stock has since fallen more than 70%.
Europe views Eutelsat as a critical pillar of its digital‑sovereignty agenda. In June, the French state led a €1.35 billion ($1.57 billion) capital injection, becoming the largest shareholder with roughly a 30% stake.
Tech sovereignty and the financing curve
SoftBank’s divestment follows its broader strategy to free up capital for artificial‑intelligence investments. Earlier this year the firm sold its entire holding in U.S. chipmaker Nvidia to fund its stakes in OpenAI and other AI ventures, a move announced by founder Masayoshi Son at a recent conference.
Analyst Luke Kehoe of Ookla notes that SoftBank’s stake reduction is part of an “aggressive monetisation” push across its portfolio. He adds that, with European governments and strategic investors now underwriting Eutelsat’s recapitalisation, the company is shifting from a pure growth story to a cornerstone of Europe’s digital‑infrastructure ecosystem.
Starlink retains a decisive scale advantage in retail broadband, but Eutelsat is carving out a niche in high‑value B2B segments—government communications, aviation backhaul, emergency response networks, and maritime connectivity. This focus could deliver more stable cash flows, albeit at the cost of slower subscriber growth.
Key questions for investors include whether Eutelsat’s B2B‑centric model can generate attractive returns once the current wave of capex and recapitalisation settles, and whether European policymakers are prepared to continue subsidising the massive investment required to close the gap with Starlink.
While Eutelsat and SoftBank declined to comment, market participants will be watching closely for any signals on future funding rounds, potential strategic alliances, or further asset sales that could reshape the competitive landscape.
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