March 19 (Reuters) - France-based fixed satellite

service provider Eutelsat Group said on Tuesday it has

signed a seven-year $500 million agreement with Intelsat for its

OneWeb Low Earth Orbit (LEO)constellation.

The deal, which will commence in mid-2024 with a $250

million commitment, has an option of a further $250 million, the

company said.

The partnership will enable the company to integrate

OneWeb's LEO network with its Geostationary Equatorial Orbit

(GEO) and terrestrial networks, Eutelsat added.

"Today's announcement takes that partnership to a new level,

enhancing our ability to offer new, true multi-orbit services

and solutions across our portfolio of customers and business

segments," Intelsat's chief executive officer, Dave Wajsgras,

said.

The Eutelsat Group was formed through the merger of Eutelsat

and OneWeb in 2023, becoming the first fully integrated GEO-LEO

satellite operator with a fleet of 35 GEO satellites and a LEO

constellation of more than 600 satellites.

The group in January cut its targets for its 2023-2024

financial year as OneWeb's LEO activities were running behind

schedule, fueling concerns that rivals such as Elon Musk's

Starlink and Amazon's Project Kuiper could beat OneWeb to the

punch.

Eutelsat confirmed OneWeb's ground roll-out was on track to

reach 90% coverage by mid-2024.