Eutelsat Reports Decline in Video Revenue Amid Strong Demand for Services

French satellite operator Eutelsat announced disappointing first quarter revenues on September 30, 2023, as a significant decline in its video business overshadowed robust demand for government services, particularly in Ukraine. The company’s total revenue reached 283 million euros (approximately $330 million), reflecting a 1.2 percent decrease year-on-year. This figure fell short of the average analyst forecast of 295 million euros, highlighting ongoing challenges within the company.

The video segment, which provides satellite broadcasting to over one billion viewers worldwide and constitutes nearly half of Eutelsat’s total revenue, experienced a sharp 10.5 percent fall in revenue compared to the previous year. This decline is attributed to a long-term downturn in the video market, compounded by sanctions that impacted Russian channels. According to Eutelsat’s statement, these sanctions are projected to cost the company around 16 million euros this year.

Government Services Show Strong Growth

Despite the struggles in the video sector, Eutelsat reported a surge in its government services segment, which emerged as the fastest-growing area. Revenues in this category rose by 18.5 percent year-on-year to reach 52.4 million euros, aligning with market estimates. This growth reflects increasing demand as European governments seek alternatives to existing satellite services, particularly in light of geopolitical developments.

Eutelsat operates a constellation of over 600 Low Earth Orbit (LEO) satellites through its London-based subsidiary OneWeb. These satellites are now viewed as a viable alternative to Elon Musk‘s Starlink, further gaining traction in the market. Nevertheless, Eutelsat continues to face challenges with sluggish sales growth, primarily due to its declining legacy video business.

In light of these developments, Eutelsat has confirmed its annual and long-term financial targets, indicating a commitment to navigating the current landscape while addressing the pressing issues affecting its revenue streams. The company remains focused on leveraging its strengths in the government services market, even as it grapples with the complexities of the broader media environment.