Eutelsat's Bid for Italian Secure Telecoms Contract: A Geopolitical Gamble

Eutelsat, the Franco-British satellite operator, is vying for a secure telecoms contract with the Italian government, according to two sources close to the matter. This move underscores Europe's desire to develop homegrown alternatives to Starlink, the U.S.-based company that has dominated the sector and is in focus now amid transatlantic tensions over the war in Ukraine.

Italy is aiming to guarantee encrypted communications between the government, diplomats, and defense officials operating in risky areas. Eutelsat is among the contenders, along with Elon Musk's Starlink. The firm's involvement has not been previously reported and highlights Europe's push for strategic autonomy and sovereignty in critical technologies, reducing dependence on foreign suppliers, especially in times of crisis like the war in Ukraine.

The sources declined to provide details on how far in the talks Eutelsat has progressed. However, the company merged with Britain's OneWeb in 2023 and manages a constellation of around 650 low Earth orbit (LEO) satellites. A spokesperson from Eutelsat told Reuters that the company "regularly engages with European governments and institutions on secure satellite communications" as part of a commitment to "resilient and sovereign connectivity solutions."

Eutelsat's network is much smaller than that of Starlink, which has 6,700 active satellites. However, its shares have surged in recent days on talks with the European Union to supply additional internet access to Ukraine. Eutelsat was founded as an intergovernmental body between Italy and France and is now a French-led company. The Italian concession holder is Telespazio, a joint venture between Italy's Leonardo (67%) and France's Thales (33%).

Discussions between Prime Minister Giorgia Meloni's right-wing government and Musk's Starlink have met sharp criticism from opposition parties in Italy, which question the wisdom of handing a national security contract to a foreign businessman. Meloni is an ally of U.S. President Donald Trump and was one of only a few foreign leaders to attend his inauguration in January. However, tension has been rising between the United States and Europe over the defence of Ukraine.

Italy's government says that no contract had been signed with Musk, and it is also aiming to develop its own low-orbit satellites involving Italy's main national players. That hardly represents an immediate solution to Italy's needs, and Meloni in January said no public alternatives were available yet, amid delays in the development of the EU's IRIS² satellites.

A source with knowledge of the matter told Reuters earlier this year that Rome was considering a five-year deal with Starlink worth a total 1.5 billion euros ($1.61 billion). The Italian government's decision to consider Eutelsat's bid for the secure telecoms contract could have significant implications for the geopolitical dynamics between Europe and the United States, particularly in the context of the war in Ukraine.

Eutelsat's involvement in the Italian secure telecoms contract bidding process highlights Europe's desire for strategic autonomy and sovereignty in critical technologies. By considering a European company for this contract, Italy can reduce its dependence on foreign suppliers and maintain control over its communication networks. This is particularly important for Italy's national security, as it ensures that critical communications remain within its jurisdiction and are not subject to foreign influence.

However, the competition between Eutelsat and Starlink for the Italian contract also has economic implications. The awarding of the contract to Eutelsat could provide a significant boost to the European satellite industry, potentially challenging Starlink's dominance in the sector. This could have broader implications for the global satellite market, as Europe seeks to assert its economic independence in the face of U.S. competition.

In conclusion, Eutelsat's bid for the Italian secure telecoms contract has the potential to significantly impact the geopolitical dynamics between Europe and the United States, particularly in the context of the war in Ukraine. The move underscores Europe's desire for strategic autonomy and sovereignty in critical technologies, while also potentially exacerbating transatlantic tensions and challenging U.S. dominance in the global satellite market.