Telefónica, Deutsche Telekom, Orange and Vodafone have signed a letter of intent to explore a joint bid for the allocation of radio spectrum for satellites that Brussels may be preparing for 2027. Europe could divide the 2 Gigahertz (GHz) band into three thirds. One third for government and defence services, another for a European direct mobile connectivity operator, and another open to international competition. The four telecoms aspire to secure the second lot, the spectrum intended for a European operator.
The European operators are reacting to what has been seen in the US, although the initiative does not seem aggressive enough to effectively compete with Starlink in terms of satellites. The initial plan is to do it without investment, that is, without their own satellites, and the goal is to launch the service in 2029. To achieve this, they will depend on a third party's satellites, likely the American firm AST. Therefore, we reiterate our recommendation to Sell on the telecommunications sector. It is a mature sector, with high competition and the risk of new operators entering, such as Starlink, where the main growth avenue is cost reduction. Furthermore, the sector maintains high levels of indebtedness, which limits the sector's capacity for consolidation and investment in new technologies, such as satellites.