Published by Global Banking and Finance Review
Posted on March 4, 2025
By Tim Hepher and Joey Roulette
PARIS (Reuters) - The head of one of Europe's largest satellite manufacturers, France-based Thales, has highlighted the risks to governments of relying too heavily on private satellite constellations in an apparent warning over Elon Musk's Starlink.
Speaking at a results briefing on Tuesday, Thales CEO Patrice Caine questioned the business model of Starlink, which he said involved frequent renewal of satellites and question marks over profitability.
Without further naming Starlink, he went on to describe risks of relying on outside services for government links.
"Government actors need reliability, visibility and stability," Caine told reporters.
"A player that - as we have seen from time to time - mixes up economic rationale and political motivation is not the kind that would reassure certain clients."
SpaceX, Musk's space launch company that also owns Starlink, did not immediately respond to a request for comment.
Starlink, with millions of customers globally and more than 7,000 satellites, has been sold as a secure means of accessing the internet, resilient to space-based attacks by the sheer number of replaceable satellites that make up the constellation.
SpaceX says it sees growing global demand for Starlink, as it expands a 1 million square-foot (92,903 sq m), heavily automated Starlink terminal manufacturing site in Texas that produces 15,000 terminals a day.
SpaceX has captured key markets for Starlink after using its reusable Falcon 9 rockets to deploy satellites far quicker than rivals, such as Europe's OneWeb.
In the early days of the Ukraine war, Starlink's security was stress-tested by a barrage of unsuccessful Russian hacking attempts that crippled rival Viasat.
In 2023, Musk said he had refused a Ukrainian request to activate the Starlink satellite network in Crimea's port city of Sevastopol the previous year to aid an attack on Russia's fleet there, saying he feared complicity in a "major" act of war.
Last month, Musk denied a Reuters report that U.S. negotiators pressing Kyiv for access to critical minerals had raised the possibility of cutting access to Starlink.
Caine said most European governments had backed systems based on commissioning assets more directly under their control, such as the future Iris2 constellation for secure networks.
"When you operate government communications you don't necessarily want to be dependent on an external person, whoever that is. That is why...the vast majority of government infrastructure in Europe is owned or has been purchased," he said.
"Other countries make other choices. They have private players invest and operate the services. It is very rare in Europe. (Positioning system) Galileo started like that and it didn't work."
Thales earlier reported continued losses in its own satellite business as it posted higher overall 2024 profits.
Caine said Starlink did not compete directly with Thales or its main European rival Airbus, Europe's two major satellite producers, but had indirectly shaken up their markets by disrupting commercial telecom satellite operators.
(Reporting by Tim Hepher in Paris and Joey Roulette in Washington; Editing by Jamie Freed)
