European satellite stocks rally as investors reassess Starlink rivals

European Satellite Operators Surge as Starlink Restrictions Drive Investor Interest

European Satellite Operators Gain Momentum Amid Starlink Limitations

By Gianluca Lo Nostro

Market Reaction to Starlink Restrictions

Oct 16 (Reuters) - Shares in European satellite operator Eutelsat surged on Friday, adding nearly a quarter in value this week as Ukraine faced speed limits on SpaceX's Starshield satellite system, which has renewed investor interest in European alternatives.

Eutelsat shares were up 20% by 1202 GMT, bringing weekly gains to 31%. Paris-listed SES, another European satellite operator, also rose 7.1%.

Background on Starshield Service Limits

Reuters reported on Friday that an order to limit Starshield services in Ukraine came from inside the White House, citing two US officials and a Western official briefed on the matter.

Analyst Perspectives on European Satellite Operators

Equity analysts said the development reinforced the case for European satellite operators at a time when governments increasingly seek alternatives to US technology.

Comments from Market Analysts

"The Starlink Ukrainian issue helped," Oddo BHF analyst Stéphane Beyazian said about the share moves.

"But more generally, shares have been done so much due to the Starlink risk — now investors are reconsidering them as the European industry will not disappear to Starlink," he added.

European Alternatives to Starlink

Eutelsat and OneWeb's Role

Eutelsat operates OneWeb, a network of about 600 low-Earth orbit (LEO) satellites providing space-based broadband connectivity to governments, airlines and telecoms operators.

Backed by the French and British governments, OneWeb is widely seen as Europe's leading challenger to Starlink, whose vast network dominates the global LEO broadband internet market.

Operational Capabilities in Ukraine

Eutelsat CEO Jean-François Fallacher said in March the company had sold its entire capacity in Ukraine and was operating as a dual-use company with thousands of antennas active and devices able to operate in environments with GPS jamming.

Future Prospects for European Operators

ING analyst Jan Frederik Slijkerman said Eutelsat and SES have become more attractive to some investors following a slump that had started in the summer.

"We don’t see (Europe's IRIS² satellite project) fully replicating Starlink’s capabilities in the short term, although SES and Eutelsat can already provide complementary satellite connectivity," Slijkerman said.

(Reporting by Gianluca Lo Nostro, additional reporting by Hugo Lhomedet; Editing by Milla Nissi-Prussak)