OneWeb in ‘advanced’ talks with next big investor, Capacity

OneWeb in ‘advanced’ talks with next big investor, Eutelsat says

29 April 2021 | Alan Burkitt-Gray

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Satellite company OneWeb is in “advanced discussions” with potential investors to provide its missing US$475 million.

This week Paris-based Eutelsat became the third major investor in the UK/Indian venture, promising its own $550 million. OneWeb CEO Neil Masterson said on Monday: “We now have 80% of the necessary financing for the Gen 1 fleet, of which nearly 30% is already in space.” 

Now, according to documents shown to Eutesat investors, London-based OneWeb is “well advanced [in] discussions with potential backers”. Capacity does not yet know which companies OneWeb is talking to.

OneWeb has raised $1.9 billion in new money since it was rescued from bankruptcy last year, with Bharti Global and the UK government each injecting $500 million. Bharti, part of the same Indian group that owns Airtel, Eutelsat and the UK will each own 24%. SoftBank, which invested $350 million in January, plus Hughes and potential newcomers will own 28%, say Eutelsat documents. 

OneWeb is about a quarter of the way to launching its planned 648 satellites in what it calls “gen 1”, which will give it a total of 1.1Tbps of capacity. It is making satellites at the rate of 15 a week in France and Florida, and French company Arianespace is launching them from eastern Russia.

Sunil Bharti Mittal (pictured), the executive chairman of OneWeb, told Capacity earlier this year that that the second generation — or “gen 2” — satellites are due to be in service in 2024-25, and will include positioning, navigation and timing (PNT) facilities, designed to allow the company to compete with other satellite navigation services such as the EU’s Galileo, Russia’s Glonass and the US’s GPS.

The Eutelsat documents say that gen 2 will have “optionality to provide more capacity at a significantly reduced cost with enhanced operational flexibility”.

With the current gen 1, OneWeb aims to cover everywhere north of 50° north latitude by the fourth quarter of this year, including the Arctic, extending to everywhere north of 22.5° north and everywhere south of 22.5° south by the middle of 2022. Coverage will be global by the fourth quarter of 2022.

User terminals, now in development, will provide customers with 195Mbps connections, the documents reveal. OneWeb, with low Earth orbit (LEO) satellites at 1,200km above the surface, will provide connections with low latency: the distance will give the same sort of round-trip time that most internet users achieve to big data centres.

The company says it is targeting a market that will be worth almost $3 billion a year by 2029, almost equally split into three sectors: fixed data, government and mobility.

The fixed data market includes mobile backhaul, community broadband and enterprise networks. Mobility includes in-flight and maritime connectivity.

Polar coverage — something geostationary satellites cannot achieve — will be important for government, military and security applications, say the documents.

An industry executive close to the satellite business told Capacity: “OneWeb has an overlooked capability — 74 LEOs over the Arctic. With recent Russian and Chinese activity in the Arctic, it is now a zone of potential conflict with poor communications. OneWeb could be the solution.”

This might give a clue to the next big investor that OneWeb is seeking out — mobile service providers already working with the Pentagon, suggested one of Capacity’s sources.

“That means it’s either AT&T or someone small,” said one. “I think whoever invests in OneWeb will get a rumoured $1 billion multi-year contract for service. That would be motivation enough to invest $400 million for $1 billion in revenue, guaranteed.”