Satellite internet operators OneWeb and Eutelsat plan to merge in hopes of becoming a stronger competitor to SpaceX’s Starlink, writes Engadget. The merger, which is subject to approval by regulators and Eutelsat shareholders, is expected to close by mid-2023. The deal values OneWeb at $3.4 billion, and OneWeb and Eutelsat shareholders will each own half of the combined company.

Eutelsat has a fleet of 36 satellites in geostationary orbit. They will be connected to a cluster of OneWeb satellites in low Earth orbit, which can provide access to the Internet. OneWeb currently has 428 satellites in orbit out of a planned 648 in the first generation network.

OneWeb and Eutelsat expect combined revenue of €1.2 billion in the 2022-23 financial year. Eutelsat Chairman Dominique D’Innin and CEO Eva Berneke will remain in their roles in the combined company. OneWeb investor Sunil Bharti Mittal will co-chair.

The reason for the merger was OneWeb’s inability to become a viable competitor to Starlink and Amazon’s Project Kuiper. In March 2020, OneWeb filed for Chapter 11 bankruptcy while seeking a buyer. The UK government and Mittal’s Bharti Global each paid $500 million for a 45% stake in OneWeb. In early 2021, the company received additional funding to launch hundreds of satellites.

Recently, OneWeb was forced to postpone the launch of satellites due to the full-scale Russian invasion of Ukraine. Roscosmos has blocked the launch of OneWeb satellites because the Russian government demanded that the UK sell its stake in OneWeb and wanted guarantees that the satellites would not be used for military purposes. OneWeb eventually turned to rival SpaceX to launch the remaining first-generation satellites.

After the expected merger, the UK will retain a “special interest” in OneWeb, as well as exclusive rights to the company. They give the government significant influence over national security control over the network and veto power over certain decisions, such as the location of OneWeb’s headquarters.