Enlarge /. A OneWeb receiver.
The UK has entered the increasingly competitive race for a global satellite Internet service provider after taking control of the failed space startup OneWeb with Indian billionaire Sunil Bharti Mittal.
The low-earth orbit satellite operator emerged from Chapter 11 bankruptcy protection on Friday and will now target an additional $ 1.25 billion through debt or equity to meet its ambitious mid-term goal of providing a global commercial internet service with an emphasis on remote areas by 2022 Areas to start.
It will face well-funded competitors including companies led by SpaceX's Elon Musk and Amazon's Jeff Bezos.
The UK government, which will have a golden stake in OneWeb, and Mr Mittal's Bharti Global are each paying $ 500 million for 84.4 percent of the company. The balance will be owned by existing creditors including SoftBank and Airbus.
Neil Masterson, former Co-Chief Operating Officer of Thomson Reuters, takes over the management. The UK government and Bharti Global will each have three representatives on the board and there will be three independent directors.
The emergence of OneWeb from Chapter 11, a process by which companies are in need to reorganize, is fueling the UK's ambitions to become a major commercial space provider and develop cutting-edge positioning technologies that could forge international security alliances .
"This deal gives us the opportunity to build on our strong base for advanced manufacturing and services in the UK, creating jobs and technical expertise," said Alok Sharma, business secretary.
Satellite Applications Catapult, a government-funded innovation center, is already working with OneWeb to develop positioning, navigation and timing technologies that can improve the resilience of existing navigation services such as GPS.
The first focus will be on having a working commercial internet service for the UK and the Arctic by autumn next year.
The company was one of the earliest companies to propose a mega-constellation for delivering the Internet to remote parts of the world. However, SpaceX's Starlink constellation already has about 800 satellites in low-earth orbit against OneWeb's 74.
Even so, OneWeb in its reborn form would increase its focus on business customers and help it compete, said Chris Quilty, an analyst at Quilty Analytics, a space industry consultancy.
"The two have taken different routes, with Starlink focusing on the consumer market and OneWeb focusing on corporate customers," he said. “SpaceX has developed lower-cost hardware for the consumer market, but has yet to subsidize it at a price of $ 450. OneWeb's enterprise customers can expect to pay thousands – or tens of thousands – dollars for the hardware, but they can expect more bandwidth. "
OneWeb intends to launch 36 more satellites on December 17th and will accelerate launches next year to meet its goal of having 650 satellites in orbit for worldwide coverage by 2022.
Mr Mittal, whose Bharti Airtel is one of the largest telecommunications companies in the world, told the Financial Times that he was confident that the funds would be available to complete the launches. In a call on Friday, he told staff that an investor had offered $ 700 million, but told the FT that the group also intended to take on debt.
He added that it had invested $ 3.3 billion before the group collapsed in March after a failed fundraiser. OneWeb's assets included regulatory priority over competing low-earth orbit constellations for broadcast services and a satellite manufacturing facility in Florida.
"A worthwhile investment"
"I don't see any difficulties [with the funding]," said Mittal. “In the hands of new investors, this constellation will be ready for commercial service at $ 2.25 billion [including the $ 1 billion pledged by new shareholders], and this will be the cheapest constellation compared to anyone on the Be world. I can confidently say this will be a worthwhile investment. "
The UK government's decision to invest in OneWeb against the advice of senior officials has been controversial and has led MEPs to criticize the use of taxpayers' money to rescue a failed company.
It also met with significant opposition from the UK state space agency, which pledged to develop a stand-alone global navigation satellite service after the EU banned UK access to secure elements of its Galileo initiative. This project was abandoned from the ground up due to the high cost of developing an independent navigation service.
As a communication constellation, OneWeb cannot provide identical navigation services for GPS or Galileo. According to experts, however, it could be a resilient alternative and be offered to partners in security alliances such as the Five Eyes Intelligence Group from the UK, US, Canada, Australia and New Zealand to expand existing services.
Chris McLaughlin, who helped OneWeb organize the deal as special advisor, said the UK government had entered an industry that had "options for decades to come".
"A sovereign nation needs a sovereign spatial capability," he added. "Buying OneWeb ensures this at a fraction of the cost of starting over."
With their golden share, the UK government will be able to decide who has access to the network. OneWeb will also be a means of fueling Britain's space ambitions for the space industry. The payloads for the next generation of satellites – which will be significantly more powerful than the current generation – are expected to be manufactured in the UK from around 2023.
© 2020 The Financial Times Ltd. All rights reserved. No redistribution, reproduction or modification in any way.