A report from analysts at BNP Paribas looks at the prospects for Europe’s two satellite operators: SES of Luxembourg, and Eutelsat of Paris. Both now play a truly global role – with SES having acquired Intelsat, and Eutelsat firmly backing OneWeb and its global appeal to telcos, commercial enterprises and government/military users.

The bank, which has re-initiated coverage of the two operators – examines the challenges for the pair, not least the decline of DTH and rising competition for satellite users from broadband operators.

For SES, the bank said: “Opportunities ahead – initiate at Outperform with €7.2 Target Price. SES shares were trading on December 19th at about €5.20 […] SES is facing similar industry challenges as Eutelsat with regards to competition and Video exposure. In addition, the Intelsat acquisition has increased the group’s leverage substantially. However, with >60 per cent of its revenues in Networks (incl. c.25 per cent in Government), operating a multi-orbit fleet and benefitting from C-band optionality, opportunities outweigh challenges. The delivery of synergies with Intelsat should provide self-help support for earnings. Shares are up >70 per cent YTD but trading at 5x EV/EBITDA 26e, we see further upside potential and [we] initiate at Outperform.”

For Eutelsat, the bank said: “Eutelsat: balanced risk/reward post capital raise – initiate at Neutral with €2 Target Price. On December 19th Eutelsat shares were trading at about €1.75 […] Eutelsat still has sizeable exposure to the declining Video segment, competition is intensifying and FCF will likely remain negative in coming years, notably on elevated capex. However, the €1.5 billion capital raise improved the balance sheet while also funding investments in the growing LEO constellations. Meanwhile, we think that Eutelsat is well placed to benefit from the space policy and sovereignty theme in Europe. Trading at 6.2x EV/EBITDA 2026e, we see a balanced risk/reward and initiate with a Neutral rating.”

The bank sees positive prospects ahead: “With growing consumer and corporate demand, development of new technologies (AI, cloud computing) and space increasingly becoming a strategic domain for governments (defense, security, connectivity), the space economy is set to grow at a mid-single digit pace p.a. by 2033. A growing number of governments are developing policies to support space programmes. In Europe, we have recently seen the emergence of new projects, and we think that the planned increase in defense spending may benefit the European operators. In the current geopolitical context, the space policy and sovereignty theme in Europe is likely to be a tailwind for European operators Eutelsat and SES. Eutelsat and SES respectively derive c.17 per cent (at end June 2025) and 23 per cent (pro-forma) of their revenues with Government.”

The report also comments on the prospects of an FCC C-band reward. “While a first transition has already been completed, the US Federal Communications Commission (FCC) is looking to expedite the second C-band repacking process. An auction would occur no later than July 2027 and would be for at least 100 MHz. We think this represents a material optionality for SES. We assume a value of >€1 billion in our SOTP for SES’s C-band, representing close to 50 per cent of the group’s current market cap. Eutelsat has a relatively low exposure to the C-band case.”

But if there’s an upside, there is also a downside. The bank said: “Competition for the European satellite operators has materially increased in recent years. Starlink already operates a constellation of ~9,000 satellites and new LEO constellations are set to enter into service shortly. Amazon started deploying Kuiper (which has recently been renamed Amazon Leo) in April 2025 with the launch of its first 27 satellites into space (with an ambition of >3,000 satellites) and commercial debut likely to begin shortly. Meanwhile, China’s GuoWang also has ambitions to operate 13,000 LEO satellites by 2030. Overall, we believe that Starlink and other new entrants would likely increase competitive/pricing pressure although they are mostly skewed to the B2C segment.”

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Tags: BNP Paribas, eutelsat, SES