Germany's Rheinmetall, OHB eye home-grown "military Starlink"

German defence heavyweight Rheinmetall and satellite manufacturer OHB are in early-stage talks about a joint bid to build a secure, military-grade satellite internet network for the Bundeswehr, in a move that could give them access to a share of Berlin’s €35 billion military space technology budget. The proposed project has been likened by officials to a sovereign “Starlink for the Bundeswehr” and would aim to reduce Germany’s reliance on US-based systems.

According to three people familiar with the discussions, the Düsseldorf-based arms group and Bremen-headquartered OHB are considering forming a joint venture to compete for a multibillion-euro contract to deploy a low Earth orbit (LEO) satellite communications constellation dedicated to military use. The people told The Financial Times that talks are at an early stage, with procurement authorities still preparing to issue a formal tender.

The initiative comes as Germany, Europe’s largest economy, accelerates efforts to strengthen its armed forces and expand domestic capabilities in space and defence. Berlin last year pledged to invest €35 billion in military space technology, a level of spending that would make Germany the world’s third-largest space technology spender after the US and China, according to consultancy Novaspace.

Interest in sovereign satellite communications has intensified since the war in Ukraine highlighted the military value of resilient, space-based broadband. Starlink, owned by Elon Musk’s SpaceX, proved crucial for Ukrainian forces after Russia’s full-scale invasion, providing high-speed, easily deployable communications when terrestrial networks were destroyed or disrupted. SpaceX has since expanded into government-focused services with Starshield, a defence and intelligence variant of Starlink.

However, many European governments are wary of relying on US-owned systems or a single commercial provider. German officials have stressed that the Bundeswehr’s future network should be built domestically.

Armin Fleischmann, a space co-ordinator for a division of the German military, told Handelsblatt last week that the network would be built “over the next few years, primarily with German companies”. He added that initial deployment would focus on Nato’s eastern flank, where Germany is establishing a permanent 5,000-strong brigade in Lithuania, and that “everything else will follow”.

Rheinmetall’s interest reflects its rapid diversification beyond traditional land warfare systems such as tanks and artillery. As Germany has ramped up defence spending, the company has moved aggressively into new domains, including space. At the end of last year, it won its first space contract, worth up to €2 billion, partnering with Finnish company Iceye to produce radar reconnaissance satellites at a converted car factory in Germany. The constellation will provide surveillance capabilities that function through cloud cover, poor weather and darkness.

For OHB, the potential partnership offers a strategic opportunity amid rising competitive pressure in Europe’s satellite industry. The company, which has supplied spacecraft for the EU’s Galileo navigation system and radar satellites for the German military, faces the prospect of a powerful rival if the space divisions of Airbus, Thales and Leonardo merge. OHB chief executive Marco Fuchs has previously warned that such a combination could be anti-competitive.

As Europe’s third-largest satellite manufacturer, OHB is seeking to expand its military business and broaden its portfolio of small- and medium-sized satellites. Last week, the company raised its earnings and revenue forecasts for this year and next, partly on expectations of a surge in military space spending.

By Sabina Mammadli