The UK government and Indian telecom giant Bharti Global Limited won the assets of aspiring satellite operator OneWeb in a bankruptcy auction. Each party will invest $500 million in the company as part of the recapitalization plan. Subject to further government and regulatory approvals and funding, OneWeb will resume manufacture, launch and operation of its satellite constellation.
We are delighted to have concluded the sale process with such a positive outcome that will benefit not only OneWeb’s existing creditors, but also our employees, vendors, commercial partners, and supporters worldwide who believe in the mission and in the promise of global connectivity.
– Adrian Steckel, CEO of OneWeb
Common path to different goals
For Bharti the stake in OneWeb allows the company to further expand its data connectivity reach. Within India (and 17 other countries across Asia and Africa) Bharti operates the Airtel mobile phone network. Growing its global footprint with the low-latency, high capacity, low earth orbit constellation will allow Bharti to further expand its data network offerings.
The Her Majesty’s Government’s stake is managed by the UK Secretary of State for Business, Energy, and Industrial Strategy, with an initial focus on position and time (PNT services) rather than data. As part of Brexit the UK dropped out of participation in the EU’s Galileo constellation, an alternative to the US-government’s GPS satellite network. The UK government briefly floated the idea of building its own constellation from scratch, but the option to piggy back on the OneWeb network proved far more compelling from a financial and technical perspective.
Read More: OneWeb launches high-speed satellite production facility
Of course, the UK government can also benefit from the data capabilities the OneWeb constellation brings to bear, beyond just the PNT services. A fully deployed and operational OneWeb network would allow for other parts of the UK government, such as the military, to access (relatively) low-latency bandwidth on a truly global scale. The UK government sees this sovereign global satellite system as an opening to “further develop its advanced manufacturing base, making the most of its highly skilled workforce as the hardware is further developed and equipment and services are deployed to make the most of this unique capability.”
This successful outcome for OneWeb underscores the confidence in our business, technology, and the work of our entire team. With differentiated and flexible technology, unique spectrum assets and a compelling market opportunity ahead of us, we are eager to conclude the process and get back to launching our satellites as soon as possible.
– Steckel
Will it fly for airlines?
Just under a year ago OneWeb announced a Commercial Aviation division, focused on delivering an inflight connectivity solution to airlines. That operation took a hit with the bankruptcy, but it did not disappear. It still depends on developing the necessary phased array antenna technology and support infrastructure to convince airlines that choosing OneWeb is a safe long-term investment. OneWeb VP Commercial Aviation Ben Griffin previously expressed optimism on the terminal front, though the market has seen its share of failures and bankruptcies in recent months.
And, of course, OneWeb is not the only LEO constellation vying for potential airline services. Starlink from SpaceX and Telesat have both suggested they also want to serve the market.
Also worth noting on this front is that Bharti is a founding member of the Seamless Air Alliance, a group aiming to smooth the installation, operation, and billing services functions for inflight connectivity. That it now also owns part of a satellite network certainly helps its ambitions on that front.
Moving the factory
The UK’s interest in OneWeb could also see the manufacturing operation move from Florida to the British Isles as the government aims to bring high tech manufacturing jobs into the country The current facility in Florida, built in cooperation with Airbus, is just a year old. While an outright move of manufacturing to the UK would come with significant costs and likely disrupt the construction schedule, a second factory built in Britain might make some sense. Airbus is unlikely to object, so long as its UK arm remains part of the partnership, though it may balk at additional capital investment right now.
The demand for a second facility also depends on how large the constellation will grow. The initial spec calls for 650 Ku-band satellites in operation, while follow-on filings suggested it could expand to tens of thousands in orbit. Given the current in orbit count and timeline for bringing a second factory online the builds might be completed before the new factory is ready.
Finally, it is unclear if the $1 billion in new funds (on top of the $3.4bn previously raised) will be enough to get the constellation into service and generating free cash flow to fund ongoing operations. But it is a strong commitment to trying.
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