I. Tracking
1. Moody Downgrades Outlook of SES a Month After Downgrading Eutelsat
"Moody downgraded SES’s outlook from stable to negative, with its concerns focused on the rise in net debt from the acquisition of Intelsat, which could impact SES's financial profile. However, Moody's noted that debt reduction could begin in 2026 if the merger achieves synergies and earnings growth. Moody's had also downgraded Eutelsat's rating due to underperformance and delays in its OneWeb partnership.
Generally, the GEO satellite industry faces competition in internet delivery from non-geostationary satellites (NGSO), such as Starlink, but also primarily from the loss of TV viewers. As consumers around the world continue the 'cord cutting' trend, video broadcasts have taken a significant hit rendering some of the services offered obsolete. Eutelsat continues to operate its Starlink competitor OneWeb (though the two are not a perfect one-to-one comparison in their business models) and SES operates the O3b constellation in MEO for inter2025-week-9-financial-outlook-for-operators-downgraded-while-another-startup-looks-to-the-defensenet connectivity, signaling that the two companies have options to compete. The challenge for the two companies and other GEO operators will be to manage their costs and operations of their GEO satellites as consumers shift media consumption habits.
What will be interesting to observe is Starlink's growth once users have finished shifting from GEO to LEO offerings. It remains difficult to see what the actual interest in space-based internet is as much of Starlink's growth has been by poaching existing customers of satellite services. Granted, there are many new consumers in the mix, however, Starlink still is a massive space operation that requires large finances to back them up."
2. As Defense Cuts Loom, More Startups Pivot to Defense to Fund Ambitious Growth
"Both ABL Space and True Anomaly represent a broader trend within the space industry where startups, initially focused on commercial applications, are pivoting to defense-centric roles. ABL Space, now rebranded as Long Wall, is moving away from its original small satellite launch market with its RS1 rocket toward defense applications, including missile defense and hypersonic flight testing. As already covered previously, True Anomaly, positioned also itself squarely within the defense domain, with a strong focus on military space operations rather than commercial space ventures. True Anomaly has recently expanded into Southern California to build closer ties with the U.S. Space Force. Both companies share a belief in the potential of venture-backed companies to offer the speed, flexibility, and innovation that traditional defense contractors may lack. Despite initial challenges (such as failed launches and technical setbacks) these startups are capitalizing on the defense sector's growing hope that collaborating with private firms to deliver complex technologies to address rapidly evolving threats.
However, as government budgets face tightening, particularly with looming cuts to defense and other key sectors, the pool of available funding for both defense and space startups is becoming increasingly competitive. While the US government continues to prioritize military and defense spending in response to rising geopolitical threats, there is a growing recognition that the total available funds are limited and will be spread thinner across multiple projects. It’s also becoming apparent that US allies are seriously considering decoupling key defense technologies from American licenses, including space-based ones. This presents a challenge for startups looking to secure contracts, as they must compete not only with established defense contractors but also with each other for a piece of the shrinking financial pie. The stakes are high and the need for strategic alignment with government priorities is more critical than ever.
II. Immediate Awareness
1 Airbus reported an additional 300 million euros in charges for its space programs in the fourth quarter of 2024, bringing the total for the year to nearly 1.4 billion euros, indicating the challenges of adapting to the current realities of the space industry.T
2 On the heels of its FAA approval, German ATMOS secured 13.1 million euros in funding for its PHOENIX 2 reentry capsule, helping to support one of the most challenging aspects of developing a true space economy that evolves from our existing one that has existed since the first launch of Sputnik.
3 In another reminder of the challenging demand for launch vehicles, Orbex has recently revelealed that it is depending entirely on a European Launch Challenge bid win to be able to continue work on its launch vehicle, demonstrating that government support continues to be necessary for access to space.
4 India's government has launched a $58 million Technology Adoption Fund to support space startups by funding up to 60% of mission costs, aiming to boost commercialization and help Indian companies compete globally in the space industry.
5 Beijing's Yizhuang district has set an ambitious 100-launches-per-year target to continue boosting commercial space ambitions, demonstrating the CCP's desire to match US speed of innovations using public-private parternships.
6 Startup Kapta Space has emerged from stealth mode with plans to develop spaceborne radar technology to track moving targets in orbit, hoping to addressing a significant challenge in the defense sector and SSA, which may soon be funded by the US government to boost its own SSN.
7 Spain's PLD Space has signed an agreement to launch its Miura 5 rocket from a new spaceport in Oman in 2027, but it faces challenges related to infrastructure development and regulatory hurdles that may limit the number of clients.
III. Quote of the Week
“Much of the funding still comes from public sources, and when the government tightens its belt, the private sector tends to follow."
Lucas Pleney, Senior Consultant at Novaspace, regarding the difficult signals coming from shifting political priorities.