(Corrects paragraphs 11-12 to show merger of OneWeb and Eutelsat is not yet complete)
By Supantha Mukherjee and Martin Coulter
BARCELONA (Reuters) - Telecom operator Veon, which operates Ukraine’s largest mobile network, has struck a deal with British company OneWeb to integrate the firm’s satellite services with its terrestrial network, in one of the first cross-sector deals of its kind, according to sources familiar with the matter.
Satellites can help secure telecom connections when normal networks are disrupted by wars or natural disasters. Three sources familiar with the matter said the partnership could see the companies launch connectivity services in parts of Kazakhstan, Pakistan and Ukraine.
The deal is expected to be announced as early as Wednesday. Veon and OneWeb declined to comment.
The Ukrainian government did not immediately respond to a request for comment.
Veon’s Ukrainian unit, Kyivstar, already works with Elon Musk’s Starlink to bolster coverage across the war-ravaged country, sources said.
Veon and Starlink are negotiating fees for the coming year, after governments and other entities paid for the service through spring 2023.
Each OneWeb terminal provides connectivity to hundreds of people and can run on solar power. OneWeb has around 550 low-orbit satellites and plans to launch dozens more with the help of Musk-owned SpaceX.
SpaceX has shipped truckloads of Starlink terminals to Ukraine, and U.S. government earlier this month said it had conversations with Musk about the use of Starlink satellite internet in Ukraine.
Veon plans to use OneWeb’s services for emergency purposes, offsetting damage to networks on the ground and extending coverage to rural areas, sources said.
SpaceX activated Starlink over Ukraine following the Russian invasion last year, providing internet access to millions of civilians and military personnel.
In 2020, the British government rescued OneWeb from bankruptcy with a 500 million pound ($605 million) investment. French rival Eutelsat is in the process of acquiring OneWeb, with the British government retaining a minority stake.
The companies want to merge to build a constellation of low-orbit satellites to challenge Starlink and Amazon (NASDAQ:AMZN)'s Project Kuiper.
(This story has been corrected to show the OneWeb-Eutelsat merger is not yet complete in paragraphs 11 and 12)