Eutelsat’s Strategic Gambit: A High-Stakes Bid in the Arctic

The French satellite operator Eutelsat is making a bold strategic play in North America, directly challenging its rival SpaceX's Starlink for a critical military contract. This move comes as the company's shares continue to trade near their lows, presenting a stark contrast between its ambitious offer and its subdued market valuation.

At the heart of Eutelsat's strategy is a substantial proposal valued at approximately 250 million US dollars (around 240 million euros) submitted to the Canadian government. The objective is to establish a secure broadband network for military operations in the Arctic region, leveraging the Low Earth Orbit (LEO) technology from its OneWeb constellation.

The company is explicitly framing its bid around the concept of "sovereign capacity." David van Dyke, Eutelsat's General Manager, underscored the intent to provide an alternative that is not subject to the discretion of a single private individual. This statement references the discussions stemming from Elon Musk's Starlink decisions during the 2022 conflict in Ukraine. The proposal has already garnered high-level political support, with French President Emmanuel Macron raising the issue directly with Canadian Prime Minister Carney at the 2025 G7 summit.

Despite this backing, investor sentiment in early trading was cautious. The stock opened at €1.91 but dipped to a daily low of €1.84 before stabilizing around €1.86, reflecting a decline of roughly 1.6%.

Navigating a Geopolitical Arena

The Canadian bid is a single maneuver in a broader, geopolitically charged contest for dominance in the LEO satellite sector. Recent political developments in Canada appear favorable for Eutelsat. For instance, a $100 million contract between the province of Ontario and Starlink was rescinded in the summer of 2025.

However, the government contracting landscape remains highly volatile. Eutelsat recently experienced this volatility firsthand in the United States, where it lost a $55 million Department of Defense contract under the Trump administration. These tenders are not merely technological competitions; they also represent a clash of political alliances between the French-British Eutelsat/OneWeb entity and the US-based SpaceX/Starlink empire.

Should investors sell immediately? Or is it worth buying Eutelsat?

To fund its expansion in the LEO business, the company has significantly strengthened its financial foundation. In December 2025, it completed a rights issue raising approximately 670 million euros. This was part of a larger capital increase totaling 1.5 billion euros, earmarked specifically for financing its LEO ambitions.

Market Sentiment and Valuation Paradox

The market's tepid reaction highlights a disconnect between potential and realized value. While the Canadian contract offers a substantial revenue opportunity, investors are adopting a wait-and-see approach. An offer alone is insufficient; a signed agreement with Ottawa is viewed as the critical catalyst.

Sector-wide headwinds are also applying pressure. The European telecommunications sector is currently among the day's underperformers, with sector performance down approximately 8.43% according to recent market data.

Trading near €1.86, Eutelsat's shares remain close to their historical lows and well below levels seen prior to the capital increase. The company's market capitalization of just under 2.2 billion euros puts the scale of the Canadian deal into perspective: winning the contract would represent over 10% of its current market value, a figure significant enough to materially alter perceptions of the stock.

Outlook: Awaiting a Decision from Canada

In the near term, all attention is focused on a potential decision from the Canadian government. A successful bid has the potential to act as a powerful catalyst for a re-rating of the stock, potentially driving the share price back toward and above the €2.00 threshold.

From a technical analysis standpoint, the chart picture remains weak. A sustained move above the daily high of €1.92 is needed to signal a break from the prevailing downtrend. Analysts maintain a guarded stance; Deutsche Bank upgraded its rating to "Hold" in December, signaling a neutral position. The next concrete insight into operational progress will come with the upcoming quarterly sales figures, which are expected to shed light on the integration and utilization of the OneWeb services.