US and UK set to go into battle in space over future of OneW

US and UK set to go into battle in space over future of OneWeb

26 June 2020 | Alan Burkitt-Gray

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Ministers in the UK government agreed to invest $US500 million in OneWeb last night, according to numerous reports – mainly by political journalists in London.

According to the reports, which are still unconfirmed, Boris Johnson, the prime minister, and Rishi Sunak, the chancellor of the exchequer (finance minister), agreed the deal as a first step in a rescue of OneWeb, which is in bankruptcy protection.

However the US Department of Justice (DoJ) last night stepped in by potentially blocking a sale of OneWeb to a non-US company.

Audrey Strauss, acting US attorney for the southern district of New York, filed a notice with the district’s bankruptcy court warning that federal regulators could block any transaction if “it raises national security concerns”.

She cited the Committee on Foreign Investment in the United States (CFIUS), which allows the president “to review any merger, acquisition, or takeover ‘by or with a foreign person that could result in foreign control of any United States business”.

Though OneWeb is largely owned by non-US companies – including SoftBank, Airbus, Virgin Group and Bharti Airtel – and though its satellite licence is from the UK, the US is claiming it as one of its own. The company’s first satellites were built in Airbus’s factory in Toulouse, but later vehicles are being made in Florida. A number of satellites are already in orbit (see picture). 

In this morning’s reports, Francis Elliott, political editor of The Times, wrote: “Although the government technically is making a bid for the stake, British officials said the transaction was at ‘a very advanced stage’.” Elliott did not name the officials.

In the Financial Times, political editor George Parker teamed with industry editor Peggy Hollinger to report that the proposal was “part of a wider private-sector consortium bid” and added: “If the bid is successful, the British state could end up with more than 20% in OneWeb.”

No one has so far come forward as the potential bidders for the other 80%. Today is the deadline for bids for OneWeb, which went into Chapter 11 bankruptcy protection in March. If no viable bids are received, OneWeb’s assets will be auctioned off in a fire sale next week.

The reason for the UK interest is that the government has decided it is too expensive to build a British alternative to Galileo, a satellite positioning system being built by the European Union (EU). Having left the EU, the UK is no longer eligible for membership of Galileo, and the country considered and then rejected its own £5 billion system.

OneWeb was not designed for satellite navigation: it is intended to provide universal web access across parts of the world untouched by fibre or 4G services. But the UK has apparently determined that some or all of its low-orbit satellites can be modified to offer positioning.

The initiative comes from a UK government agency called the Satellite Applications Catapult, one of a group of similar bodies intended to accelerate investment in high technology. Another catapult is looking at suppliers for 5G infrastructure that are alternatives to the established vendors, Ericsson of Sweden, Huawei of China and Nokia of Finland.