Summary of Europe's Space Ambitions

Author: Ruben Dalfovo, Investment Strategist

Date: October 23, 2026

Key Takeaways

• Europe's satellite ambitions present opportunities for operators and manufacturers, but political backing does not guarantee profitability.
• Companies like Eutelsat and SES have varying levels of exposure, from satellite ownership to connectivity sales.
• US firms may face restrictions, while European companies must navigate costs, competition, and potential retaliation.
• Europe aims for greater control over satellite communications, which has drawn the ire of the US government.

Background

In October 2026, the United States issued warnings of potential severe retaliation against Europe if it moves forward with plans to reserve critical satellite frequencies for European operators. This includes companies like SpaceX, which operates the Starlink service. The conflict arises as Europe increases its investment in satellite communications, driven by defense needs and the desire for digital independence.

The Importance of Radio Spectrum

The core of the dispute revolves around radio spectrum, the invisible frequencies that enable satellite communication with devices on Earth. The European Commission's proposal aims to reserve two-thirds of a key frequency band for European operators, leaving one-third for international competition. This change directly impacts American companies like Viasat and EchoStar, whose licenses expire in May 2027.

Investment Opportunities and Risks

Beneficiaries

Eutelsat stands out as a primary beneficiary, with its satellite business growing rapidly, particularly through its OneWeb network. Luxembourg-based SES also offers satellite services to various sectors, including government and telecommunications. Additionally, aerospace and defense companies like Airbus, Thales, and Leonardo could benefit from manufacturing contracts without the burden of operating satellite networks.

Unexpected Players

Telecom giants such as Deutsche Telekom, Orange, Telefónica, and Vodafone are exploring a joint bid for European satellite spectrum, aiming to provide ground infrastructure rather than financing satellites directly. This strategy could enhance coverage while minimizing investment risks. AST SpaceMobile, an American firm, is also collaborating with European operators to develop satellite-to-smartphone services.

Risks to Consider

• Potential trade measures from Washington could impact European businesses beyond the satellite sector.
• Heavy investments in satellite networks may not yield returns if demand falters or costs rise.
• European competitors may struggle against established players with technological advantages.

Investor Insights

Investors should monitor regulatory developments, particularly the 2027 licensing process, which will clarify spectrum access for various companies. Additionally, tracking government contracts and cash flow will be crucial for understanding the financial health of satellite operators like Eutelsat and SES.

Conclusion

Europe's satellite ambitions extend beyond competition with Starlink; they represent a strategic move towards reliable communications infrastructure. While opportunities abound, the distinction between different business models and the political landscape will ultimately determine which companies thrive in this evolving market.