Europe faces significant challenges in competing with the United States in satellite-based communications technology, a gap underscored by recent disruptions to Starlink services in Ukraine. Starlink, operated by SpaceX, has become a critical communication tool on the battlefield, but Europe’s current alternatives remain limited both in scale and capability.

At present, Europe’s primary competitor to Starlink is Eutelsat’s OneWeb constellation, which operates approximately 600 low Earth orbit (LEO) satellites. In contrast, Starlink boasts a network exceeding 10,000 satellites positioned closer to Earth, offering lower latency and greater capacity—features crucial for military and strategic communications. This disparity highlights the urgency for Europe to develop more advanced satellite capabilities.

In response, European satellite operators SES, Eutelsat, and Hispasat are leading the IRIS2 project, aiming to establish a satellite constellation with an expanded fleet of 348 satellites across low and medium Earth orbits, with initial launches expected in 2029. Meanwhile, telecommunications firms including Vodafone, Telefónica, Orange, and Deutsche Telekom have expressed interest in acquiring parts of the spectrum reserved for domestic mobile satellite coverage, suggesting a broader drive for European self-sufficiency in space-based communications.

While Europe does not necessarily need to replicate Starlink’s broad consumer broadband services, particularly for rural connectivity where strategic importance is lower, defence-related capabilities remain a key priority. However, the cost of developing such infrastructure is substantial. The IRIS2 constellation has a budget of €15.6 billion, equating to over €40 million per satellite, while estimates value SpaceX’s most recent Starlink satellites at approximately $1.3 million each, offering significantly higher capacity.

Beyond financial hurdles, Europe also confronts technological and structural challenges. European rocket launch capabilities, essential for deploying satellites, accounted for only 7 percent of launches carrying European-owned satellites last year, according to industry analysis. Financially, SES carries a heavy debt load, and Eutelsat, despite recent government-backed recapitalization, faces constrained operating cash flows, complicating investment in expansion. Furthermore, European space capabilities are fragmented across multiple countries and defence contractors, impeding cohesive development.

To address these issues, there is growing recognition that European companies may require greater operational flexibility and stronger incentives. Government orders are one mechanism under consideration; analysts suggest that contracts could generate at least €500 million in incremental revenue for SES from 2030 to 2035. Additionally, European Commission President Ursula von der Leyen has advocated expediting approval processes for the proposed merger of aerospace firms Airbus, Thales, and Leonardo, aiming to consolidate resources and expertise. Telecommunications companies are also seeking regulatory relaxations to enable mergers, potentially lowering competition but boosting innovation and investment.

Although such policies may lead to higher costs for European consumers, policymakers appear willing to accept this trade-off to bolster Europe’s technological competitiveness. The ongoing conflict in Ukraine has highlighted the strategic significance of robust satellite communications, underscoring how much is at stake in Europe’s efforts to catch up with U.S. technological leadership in space.