“The first carve-out of its kind”

On August 9th Swedish investor EQT Infrastructure announced it had entered exclusive negotiations to acquire a majority stake of French-based satellite operator Eutelsat’s Ground Stations Infrastructure Business.

EQT would own 80% of the entity with Eutelsat remaining committed as a long-term shareholder and anchor tenant, retaining 20% ownership. The deal could be valued at EUR 790mn (US$876mn) and includes approximately 1,400 antennas spread out globally, belonging to Eutelsat Group and third-party customers.

The new entity would become responsible for management and operations of the infrastructure network, and Eutelsat would act as the anchor tenant to manage their network of 40 GEO satellites .

The transaction will carve out passive assets including land, buildings, support infrastructure, antennas and connectivity circuits to form a new entity that will be rebranded after the transaction and headquartered in France.

Once finalised, Eutelsat will agree a long-term master service agreement (MSA) with the Ground Base Station Business and become the anchor tenant.

EQT would become the global leader in the ground station segment of the satellite industry and be positioned to benefit from the boom in LEO satellite launches by consolidating the global ground station market.

The transaction is subject to customary regulatory conditions and approvals, as well as consultation with French security authorities and the appropriate employee representative bodies. It is expected to close in Q1 2026.

Commenting on the deal, EQT Partner of their Value-Add Infrastructure advisory team Carl Sjolund commented “At EQT, we identified satellite ground stations as an attractive digital infrastructure vertical several years ago.

“They play an important role in ensuring global connectivity, especially for those not covered by fixed and mobile connectivity solutions and require deep global expertise in developing and operating telecommunications infrastructure businesses. We are delighted to partner with Eutelsat Group to create a ground station leader and capture the growth opportunity fuelled by technological innovation.”

Eva Berneke, Chief Executive Officer of Eutelsat Group, said, “We are proud to become the first satellite operator to embark on this innovative transaction which would allow us to build on the model adopted in other industries, and to optimise the value of our extensive ground network. In EQT we have found a partner of the highest quality, who shares our vision.

“This transaction would represent a win-win situation for all parties, and would enable Eutelsat to strengthen its financial profile, whilst continuing to rely on the unparalleled quality and reliability of its ground infrastructure. Moreover, we are confident that with the backing of EQT, the business would be in a position to fully embrace the opportunities opening up to it as the new global leader in this dynamic sector.”

Simply, a ground base station is a piece of real estate which contains the passive and active infrastructure needed to capture the signals from passing satellites, connecting the non-terrestrial to the core terrestrial network, and to end-users.

As one of the legacy satellite operators, Eutelsat owns a fleet of 648 older Geostationary Earth Orbit (GEO) satellites. These differ from the newer Low Earth Orbit (LEO) satellites as they sit stationary at much further distances. Each GEO satellite requires its own ground base stations to operate; typically a master station (acting as a network operations centre) owned by the satellite operator.

A larger, smaller network of independent localised ground stations which can be owned or co-owned by various third parties (like customers) is then used to connect the satellite to the customers’ network.

EQT define their Ground Station Business as a global infrastructure platform with a large footprint of satellite ground stations that enables the transmission of data between the Earth and orbiting satellites.

Traditionally positioned to interact with terrestrial networks there is increasing interest in strategically locating ground base stations as close as possible to new data centres to enable low latency connectivity between processing and LEO satellite constellations.

The agreement would mark the first time that a satellite operator has carved-out a portfolio of ground base stations in a sale and leaseback at scale.

There are existing examples of companies who own and operate ground base station to anchor satellite operators.

Traditional broadcast companies in Europe all used to have satellite business segments, one of these being what is now Spanish-based European towerco Cellnex, which still owns a single ground base station in Spain, handed over in some of the early asset transfers.

Another example is Castor Networks in the Netherlands which operates a teleport in the Netherlands, providing terrestrial connectivity for mostly maritime coverage. However, these are small and niche examples and quite different to what EQT is proposing.

According to EQT, yes. Carl Sjolund stated the firm went ahead with the acquisition “as it resembles the TowerCo model”.

“We have a strong belief that the satellite industry is seeing a little bit of what we’ve seen in the telecoms industry with telecom companies starting to spin off their passive infrastructure. The same trend is emerging now in the satellite industry”

The satellite industry is experiencing a dynamic period of growth with heavy investment into new launches and infrastructure to support emerging connectivity applications. According to SpaceQ, in 2023’s fourth quarter alone US$6.4bn was invested into the space sector by 108 companies, a rise of 31% quarter-over-quarter.

This has resulted in a skyrocketing deployment of new satellites, totalling over 9,000 non-terrestrial assets and a 35% increase from the previous year. As satellite fleets get larger and larger, so does the need for more ground stations to manage connections. Whether it's LEO, MEO or GEO satellites, all of them require ground base stations.

Satellite operators need ground base stations worldwide to connect their fleet to customers. In an ideal situation, any satellite operator would have one per market, allowing them to plug capacity anywhere in the world. MNOs also want to have ground base stations in every market they operate in to ensure they resilient access to backup connectivity.

But building and operating a global network of terrestrial ground base stations is expensive, complicated, and doesn't generate direct returns from invested capital for satellite operators.

Like towers, there is parallel infrastructure in ground base stations, wasting capex and complicating network operations - could this be mitigated by having a single neutral entity own and operate the passive infrastructure, offloading terrestrial capex to focus on the non-terrestrial? EQT is betting yet.

The echoes of the tower model are heard clearly, as the ability for MNOs to divest their non-revenue generating passive assets to reduce both capex and opex while also raising capital to invest into other verticals is what made the towerco business boom.

Well, not quite.

Firstly, there are regulatory complications that can require satellite operators to own ground base stations in the markets they want to provide connectivity to. In Turkey, satellite operators are required by law to land any satellite signal in the country due to national security and surveillance considerations. Other factors, such as rules around corporate tax and spectrum puts pressure on satellite operators to have ground infrastructure wherever they want to provide services to.

Another challenge is the separation between the infrastructure, services and responsibilities of the Ground base Station Company, and that of the satellite operator.

The towerco model continues to evolve over time as various stakeholder dynamics change, but when the first sale leasebacks took place there was a clear distinction between the passive operations and maintenance of ‘grass and steel’, and the active equipment (as well as power). This made master service agreements and devolving responsibilities relatively clear-cut, the industry evolving over time as both parties came to learn more about the nuances of the model.

In comparison, ground base stations are much larger and more complex pieces of infrastructure that are used to directly control satellites and capacity, much less separation between where the terrestrial ends and the non-terrestrial begins. The biggest challenges lie with the technical teams, who may show concern over how directly they can manage the non-terrestrial network.

Another challenge the extent to which ground stations can be shared, or co-located. The satellite industry is still very vertically integrated and lacks the same clear industry standards for antenna equipment and active infrastructure. A Eutelsat antenna is not capable of connecting to a Oneweb base station, and vice versa.

This means any prospective ground base station would need to own multiple antennas for each customer, so the neutral host model becomes more nuanced than the far more straightforward sharing of grass and steel.

What is clear is that the satellite space is an aggressive and fast-growing industry that is playing a major role in meeting the ever-changing holistic coverage needs of carriers. Demand for capital into new ground station infrastructure will increase as fleet sizes grow, and satellite operators will want to allocate capital in ways that maximise return on investment.

We will have to wait and see what happens when, and if, EQT is able to form the proposed Ground Base Station Company by 2026. TowerXchange is aware that multiple towercos in various markets have assessed opportunities in owning ground base stations, but no deals have materialised…yet.

Once there is more clarity over business models, structure and potential for real gains in operating ground base stations, it wouldn’t be unreasonable to speculate towerco involvement as the sector continuously evolves.