Starmer and Macron have picked an indomitable foe in Elon Musk

Telegraph

12-07-2025

They didn't fix the migrant crisis, at least once you dig into the small print. They didn't end the war in Ukraine, and neither did they find a way to significantly increase trade or investment between the two countries.
Still, France's President Emmanuel Macron and Britain's Prime Minister, Sir Keir Starmer, did agree on one thing: they are going to outwit Elon Musk in one of the hottest new industries around, with a huge new investment in Eutelsat, the European challenger to Starlink.
Seriously? Starmer and Macron versus Musk?
There have been some unequal contests over the years, but this is off the scale. In reality, both men are simply chucking taxpayer's cash at a project that has little hope of success – and we will all be left to pick up the bill.
With the arguments over asylum seekers taking up so much energy, and dominating the headlines, the one significant industrial agreement coming out of President Macron's state visit this week did not get so much attention.
The Prime Minister signed up to take part in a fund raising by the French based satellite company Eutelsat. The UK will contribute £140m in fresh money, which will be enough to keep our stake of slightly over 10pc in a business that is now majority owned by the French government.
The project already has a troubled history. The Johnson government invested in OneWeb, which was then taken over by Eutelsat after it ran into difficulties. But with the extra cash it will now be getting, the company and its backers are hopeful it will have a far better future.
'This investment reflects our commitment to support the development of these critical technologies and maintain an important stake in the global satellite communications sector,' said Peter Kyle, the Technology Secretary, as the deal was announced.
In fairness, it is not a terrible idea.
There is a big market for satellite communications, and plenty of customers might be interested in an alternative to an American owned system. With President Trump showing less and less interest in paying for European defence it looks as if the Continent will have to stump up for it itself, and it will be looking to buy domestic kit instead of always relying on the United States.
Here's the problem, however: it will also have to compete with Musk's Starlink, a start-up that is already valued at more than $200bn (£148bn). In reality, competing with that emerging giant is going to prove very, very difficult.
First, Starlink has a clear lead in the technology. True, satellite communications are not right at the cutting edge of science any more. Putting some kit into orbit has been fairly straightforward for many years. Even so, Starlink along with Musk's rocket company SpaceX has become a clear global leader in launching and running satellite systems reliably and at relatively low cost.
Getting a system up and running and on budget, as well as offering competitive prices to customers, is a lot harder than it looks. The logistics, to put it mildly, are formidable. It is going to be very challenging for Eutelsat to keep up with that.
Next, Eutelsat has a very difficult history. It was originally set up way back in 1977 as a partnership by 17 European countries to develop satellite broadcasting. It has been through number iterations since then without genuinely making a success of any of them.
European cooperative ventures can be successful, as Airbus has shown, but more often than not they burn their way through a lot of government money without ever having anything very much to show for it.
After all, if Eutelsat is not able to stand on its own two feet after half a century it is hard to believe that it ever will.
Even worse, the business will be under the majority control of the French government, and the UK will merely be a minority shareholder. That doesn't sound like the kind of deal any self respecting investment bank would recommend accepting. In reality, Britain will be on the hook for the bills but will have little influence over how the operation is run
Finally, it will be competing with Elon Musk. It would be hard enough to take the fight to Boeing or one of the traditional aerospace giants. But regardless of whether you love him or hate him – and there are plenty of people in both camps – Musk is clearly one of the smartest business tycoons in the world today.
He can make quick decisions, and while a few of them go wrong, he is more often right than wrong. Musk will be able to shift with the market while the people at Eutelsat are still trying to arrange a meeting with the relevant ministers. It is hardly the best recipe for building a new business.
Let's be honest about this. In one corner we have Sir Keir Starmer and Emmanuel Macron, two massively unpopular politicians. In the other, we have Musk, perhaps the world's most successful serial entrepreneur in the world today.
I know who I would put my money on in that contest.
The Prime Minister clearly still thinks he can pick industrial winners, even though there is nothing in his past record to suggest he has the faintest clue what makes a successful business work. President Macron may have bamboozled him into getting out his chequebook.
'Thanks to our British friends as they continue to follow us on the Eutelsat adventure!' he chirped on social media, with the air of a man who has just pocketed a couple of hundred million of someone else's money.
'We're over the moon to keep going with you. Together we go further.'
Maybe it will. But it is unlikely to end well – and worst of all, it is the long-suffering British taxpayer that will end up footing the bill.