Shares of French Satellite Group Eutelsat soared this week as SpaceX's Starshield drew criticism after the Ukrainian military's access to its systems was suddenly restricted.
Earlier this week, tensions rose between the U.S. and Ukraine after Kyiv accused Elon Musk's SpaceX of imposing new restrictions on its military-grade Starlink internet service without warning, curbing connectivity and limiting Ukraine's ability to defend itself against Russian attacks.
Ukraine's President Volodymyr Zelenskyy criticized the U.S., saying "Starlink was switched off" in the middle of the night, preventing Ukrainian drones from intercepting Russian attacks, and ultimately contributing to civilian deaths.
"They knew what they did," Zelenskyy said. "It's not about attack. It's also about defending the lives… People were killed because not enough destroying, not enough interceptors, including interceptors with Starlink, which didn't work."
SpaceX CEO Elon Musk responded by shifting blame on the U.S. government and said that Starshield systems were under Washington and President Donald Trump's control.
Eutelsat shares rose 19% on Friday, and was up 25% over the past five days following the news of Starlink's struggles in Ukraine.
Eutelsat's share move this week is more evidence "supporting the sovereign value of European Satellite networks," Deutsche Bank analysts said in a note Thursday. Markets viewed Eutelsat as "the credible Starlink alternative" amid the disruption, they added.
"Whilst we note Eutelsat does offer a global LEO [Low Earth Orbit] constellation, we believe it lacks the scale to offer the number of terminals that Starlink can provide," they added. "We would expect the shares to give up some of the gains."
Eutelsat consolidated with satellite internet provider OneWeb in 2023, looking to challenge Starlink's market dominance. However, Eutelsat currently has over 600 satellites in orbit, while Starlink has more than 6,750, the company's websites show.
Ukraine's deputy minister for recovery, infrastructure, and transport Serhiy Derkach told CNBC on Friday that Russia had amped up attacks on Ukrainian infrastructure, taking advantage of restrictions on military applications, including striking bridges, railway networks, and border crossings.
"With U.S. limiting the use of Starlinks on the battlefield, Russia feels that this is their moment to try and inflict even more pain and suffering on Ukraine's civilian infrastructure," Derkach said.
"We are definitely moving towards very harsh weeks and months and need our partners' support now more than ever," he said, adding that Ukrainians already experience blackouts lasting 4-12 hours per day.