FILE PHOTO: A SpaceX Falcon 9 rocket lifts off from launch complex-40 carrying the European Space Agency Hera spacecraft on a mission to the asteroid Dimorphos, at the Cape Canaveral Space Force Station, in Cape Canaveral, Florida, U.S., October 7, 2024. REUTERS/Steve Nesius/File Photo

By Miranda Murray

BERLIN (Reuters) -A senior official from the European Space Agency said mergers could be needed to reach the scale to compete with U.S. and Chinese rivals, but that too much concentration could limit choice.

The only three European companies that deliver entire space systems rather than individual components - Airbus, Italy's Leonardo and France's Thales - are in talks to combine their satellite businesses.

"Having only one in the future is not too helpful," European Space Agency Director of Operations Rolf Densing told Reuters on Thursday. "On the other hand, they need a critical mass of business, which I perfectly understand."

The proposed 10 billion euro ($11.68 billion) satellite joint venture is designed to counter competitors, including Elon Musk's Starlink, and an initial agreement is possible before the end of the year.

The space agency is the largest customer for satellites in Europe and the European Commission, which can block merger proposals if it finds them anti-competitive, is likely to consider its views along with those of other customers.

Despite investment in other aspects of spaceflight, Densing said Europe continues to depend on others to launch its astronauts into space.

It should instead strive to conduct space missions entirely independently, without relying on foreign partners or external suppliers for critical components or services, Densing said.

"Former good partners are now in a war," he said. "And NASA is probably today not what it used to be a couple of years ago."

The increased importance of space in defence has added to the need for independence.

"I'm convinced that the future of defence is in space, or at least that space plays a major role in this," Densing said.

(Reporting by Miranda Murray; editing by Barbara Lewis)