French and British satellite operators Eutelsat and OneWeb announced Tuesday plans to merge and create a "global champion" in broadband internet, rivalling US giants such as Elon Musk's Starlink.

Eutelsat and OneWeb said in a joint statement that they have signed a memorandum of understanding to join forces to become "a leading global player in connectivity... in an all-share transaction."

Each would hold a 50-percent stake in the combined entity, the statements said.

In what they said would be "a game-changer in the industry," Eutelsat would combine its 36-strong fleet of geostationary Earth orbit (GEO) satellites with OneWeb's constellation of 648 low Earth orbit satellites (LEO), of which 428 are currently in orbit.

"This ground-breaking combination will create a powerful global player with the financial strength and technical expertise to accelerate both OneWeb's commercial deployment, and Eutelsat's pivot to connectivity," said Eutelsat chief executive, Eva Berneke.

"The combined entity will be geared towards profitable growth," with a potential for "double-digit" increase in both sales and profit "over the medium to long term," both companies said.

"This combination accelerates our mission to deliver connectivity that will change lives at scale and create a fast growing, well-funded company which will continue to create significant value for our shareholders," said OneWeb CEO, Neil Masterson.

Satellite broadband promises to bring coverage to the most remote areas of the planet by doing away with the need for antennas and other infrastructure.

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EUTELSAT COMMUNICATIONS

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