(Reuters) – Eutelsat reported on Tuesday that revenue from operating activities fell 1.2% at constant exchange rates and perimeter and below expectations in the first quarter, as strong demand for government services was not enough to offset weakness in the video sector.

Over the quarter, the French satellite group posted a turnover from operational activities of 283 million euros while analysts expected an average of 295 million euros, according to a consensus provided by the group.

Eutelsat owns and operates a constellation of more than 600 Low Earth Orbit (LEO) satellites providing high-speed Internet access through its London-based subsidiary OneWeb.

These satellites, which currently constitute the only other LEO constellation available besides Starlink, are on the rise as European governments seek local alternatives for satellite services.

Earlier this year, Eutelsat secured an additional €1.5 billion in funding from its major shareholders, including the French and British governments.

However, the group is still facing sluggish sales growth, penalized by the decline in the video business. In the first quarter, it showed a drop of 10.5% year-on-year.

Government services was once again the fastest growing segment this quarter, with revenues up 18.5% year-on-year to €52.4 million, in line with estimates.

Eutelsat has been boosting its satellite internet services in Ukraine this year, in response to the prospect that the US government could cut off access to Starlink in Kyiv.

The group has sent thousands of additional terminals to Ukraine, although Starlink has not been cut in the country.

Eutelsat also confirmed its annual and long-term financial objectives, including 2025-26 turnover at the same level as the previous financial year.

(Written by Etienne Breban, with Gianluca Lo Nostro, edited by Augustin Turpin)

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