Satellite broadband provider OneWeb lives again after the British government takes £400 million take in the firm.
The British government move comes after it lost access to the EU’s Galileo sat-nav system, following the UK’s withdrawal from the European Union.
The company had made the decision to file for bankruptcy protection in the United States as the Coronavirus lockdown began, after it had run out of cash and failed to secure additional funding.
Lead investor Softbank, which had led two previous funding rounds in 2016 and 2019, had backed away from further funding talks with OneWeb.
But now OneWeb has confirmed that “a consortium of Her Majesty’s Government (HMG) (through the UK Secretary of State for Business, Energy and Industrial Strategy) and Bharti Global Limited have committed to provide more than USD$1 billion to acquire OneWeb and fund the full restart of its business operations.”
OneWeb said that following its new ownership, it will look to resume operations as soon as possible and continue with progress towards providing global high-speed, low latency connectivity via its satellite constellation.
However, this all depends on the agreement of OneWeb’s creditors, the Bankruptcy Court, and applicable regulators. It said it expects the transaction to be completed by the fourth quarter of 2020.
“Following a competitive process, the consortium’s winning bid represents a strong offer that will enable OneWeb to successfully emerge from the Chapter 11 process with a robust foundation on which to continue its progress towards commercial operations and secure OneWeb’s position as a global leader in low latency connectivity,” the firm said.
The deal is being touted as a positive move for all parties. Bharti, via its Bharti Airtel division, is the third largest mobile operator in the world, with over 425 million customers, and has “its own extensive mobile broadband networks and enterprise business, which will act as the testing ground for all OneWeb products, services, and applications.”
For the UK, the acquisition of a stake in OneWeb will “contribute to the UK government’s ambition to join the first rank of space nations, along with its commitment to making the UK the world’s leader in science and research and development.”
“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,” explained Adrian Steckel, CEO of OneWeb.
“The combination of HMG and Bharti will bring immediate value as we develop as a global leader in low latency connectivity,” said Steckel. “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 said.
But there is little doubt that OneWeb is facing stiff competition.
In February this year OneWeb had launched 34 satellites into orbit to join the first six broadband satellites in February 2019. It intends to build an initial network of 650 satellites around the world operating at 1,200km above the earth.
It added another 34 satellites in late March, just before it entered Chapter 11.
When its network is completed (sometime in late 2021), it intends to offer Internet access initially in the Northern hemisphere, before rolling it out globally.
Unlike SpaceX, OneWeb intends to sell its connectivity services to governments and corporate customers that provide internet service to airplanes, ships and boats.
It will eventually sell bandwidth to consumer-facing internet providers
Other companies racing to construct satellite-based broadband networks include Jeff Bezos’ Blue Origin, which intends to deploy a 3,200-satellite network known as Project Kuiper.
Additional players include Kepler, LeoSat and Telesat Canada.
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