Don’t go head-to-head with Musk on space internet, satellite CEO tells Europe

The European Union should avoid spending billions on competing against Elon Musk’s entrenched Starlink global communications system, and instead zero in on areas where SpaceX has a smaller lead, a Finland-based satellite company chief told POLITICO.

Rafał Modrzewski, the CEO of ICEYE, said that an example of what not to do was the troubled European effort to build its own version of Starlink called IRIS². It’s a project that will be built by the bloc’s behemoth aerospace players, such as Airbus and Thales Alenia Space, and then operated by its telecoms and satellite giants in the SpaceRise consortium.

“Totally new entities are thriving, deploying capabilities at speed and cost that are unthinkable for some of the established prime contractors,” said Modrzewski of the space industry, adding that with IRIS² the EU was “trying to do something new the old way.”

Instead, he wants the bloc to invest in a military-grade satellite surveillance network. That would give the Continent a capability independent of the U.S. and also compete with SpaceX, which is getting around $1.8 billion in Pentagon contracts to develop the Starshield system of hundreds of spy satellites for continuous real-time monitoring of targets around the globe.

An EU-wide program to build roughly 100 observation satellites would cost around “€2 billion to €3 billion” to get going, Modrzewski told POLITICO.

“This is a reasonable number if you want to build a European response to Starshield,” he said.

For now, Brussels is focused on responding to Starlink with the IRIS² internet constellation, but that program is mired in negotiations over the terms and cost of getting it off the ground.

While at least €2.4 billion in financing for the IRIS² program is locked down in EU law, the Commission could also launch a program geared at providing a defense-ready surveillance network for militaries, spy agencies and disaster relief organizations as part of its next budget, Modrzewski said.

There’s a reason he’s so keen on such a scheme.

ICEYE is a small company — founded in 2014 and with only about $100 million in revenue last year, but it owns a network of more than 30 small surveillance satellites — each weighing less than 100 kilograms.

Rafał Modrzewski, the CEO of ICEYE, said that an example of what not to do was the troubled European effort to build its own version of Starlink called IRIS². | Noam Galai/Getty Images for TechCrunch

The satellites are equipped with synthetic aperture radar (SAR) sensors that scatter microwaves and then measure the signals that bounce back. That makes them usable at night and in bad weather, unlike optical sensors. With a boost of computational power, the satellites can process images accurate to around 50 centimeters.

Any new orbital spy network would include SAR satellites, as well as basic optical sensors and systems capable of picking up electromagnetic signals, such as from a mobile phone.

Those systems combined give the capability to cover almost every inch of the world — something that’s in increasing demand by militaries and governments, especially thanks to the deteriorating security environment caused by Russia’s invasion of Ukraine and rising tensions with China.

“Being able to see something every hour allows you to take this to another level,” Modrzewski said of the benefits of high-intensity Earth observation. “It’s no longer the spy agencies that could be using it, it would be the squadron leaders and medics too.”  

Space startup

The idea for ICEYE came out of a project dubbed Aalto-1, part of a joint venture launched a decade ago between Aalto Business School on the outskirts of Helsinki and Stanford University which was designed to use SAR technology to monitor ice — hence the name.

The company launched its first satellite in 2018, and it quickly saw that SAR had wider applications.

“We started out to observe ice,” said Modrzewski. “But the world ended up being what it is today and so we had to adjust.”

Russia’s attack on Ukraine accelerated that shift. A crowd-funding scheme following Moscow’s invasion raised enough for Kyiv to buy one of ICEYE’s satellites and the database of its other spacecraft.

That allowed Ukraine’s military to “destroy thousands of military targets” according to Serhiy Prytula, the former TV presenter whose foundation led the cash collection, and meant Ukraine has been able to spy on troop movements, logistic routes and maneuvers at sea.

Many companies run SAR satellites and governments have been developing their own networks, but ICEYE claims to have been the first to miniaturize the technology and roll it out at scale.

While the Finnish company has built up its own capability, national systems have run into trouble. Germany contracted Bremen-based aerospace firm OHB to build three SAR satellites under the SARah program for use by the German military, but two reportedly malfunctioned in orbit.

While the EU is committed to IRIS², it has been mulling a spy program.

Thierry Breton, the internal market commissioner, told a space industry meeting in January that he wanted to launch a new space surveillance program in the years ahead. However, that would be focused on monitoring satellites already in orbit.

“We should fully unlock the potential of the EU space programs for defense,” Breton said.

Modrzewski said early conversations have already taken place with the Commission over a more granular observation program than the existing Copernicus network to be financed under the bloc’s next seven-year budget.

“At this point in time, it would be premature for the Commission to pronounce itself on the details of the multi-annual financial framework entering into application after 2027,” said Johanna Bernsel, a Commission spokesperson.

However, Bernsel said it was clear that space and defense programs would be ramped up in the next budget period. “The Commission intends to turbo-charge investment — both private and public — in innovative European companies and start-ups,” she said.

Modrzewski pitched ICEYE as possibly leading such a venture, together with other space startups like French company Unseenlabs, Belgian optical specialist Aerospacelab and D-Orbit, which is based in Italy.

“This is 100 percent a response to Starshield,” Modrzewski said of the idea. “Europe has to ask itself the question: Are we going to just let the United States own Earth observation in the future?”

This article has been updated.