Qioptiq logo Raytheon

UK Wins Bid For OneWeb

02 Jul 20. The FT reported today that Britain is set to go head to head with Elon Musk’s Starlink in the race to beam high-speed internet connections from space after the UK government’s joint $1bn bid with India’s Bharti Enterprises won an auction for satellite broadband operator OneWeb. If the bid is approved by a US judge next week, the British government is expected to take a stake of about 45 per cent in OneWeb, a lossmaking company that runs a low earth orbit satellite broadband network.

The government’s stake could still fall as discussions are continuing with other potential investors. Bharti Global, a subsidiary of the parent, will also hold 45 per cent of OneWeb and the rest will be held by existing creditors, including SoftBank, its biggest investor, with loans outstanding of $913m, according to bankruptcy documents filed in the US. The UK will also have a golden share, which gives it a say over any sale and over who has access to the OneWeb network.

OneWeb collapsed in March after SoftBank walked away from talks on a new $2bn financing round. The move underlines the government’s ambition to drive investment in the UK’s commercial space sector and to snare 10 per cent of the global market by 2030. The sector has been hard-hit by the UK’s departure from the EU, after being barred from contracts on many of the bloc’s space programmes such as Galileo. Business secretary Alok Sharma said the OneWeb investment would help the UK to exploit novel satellite technologies. “Our access to a global fleet of satellites has the potential to connect millions of people worldwide to broadband, many for the first time, and the deal presents the opportunity to further develop our strong advanced manufacturing base right here in the UK.” The investment comes as the government backs away from a plan launched two years ago to develop its own medium earth orbit satellite navigation system akin to GPS of the US or the EU’s Galileo.

Costs have spiralled to £5bn, from an initial estimate of £3bn-£4bn. However, officials and industry executives believe there are opportunities to develop new navigation technologies arising out of the communication service. The US Department of Defense has indicated its support for a programme that would help to offset the vulnerabilities of its GPS satellite navigation service. These traditional navigation platforms are easily jammed and low earth orbit systems are seen as a way to provide resilience. A person close to the subject said the US could be a joint investor in a OneWeb communication/navigation project in a “second phase”. Dominic Cummings, prime minister Boris Johnson’s chief adviser, has been instrumental in pushing the case for the UK government to invest in OneWeb in the face of fierce opposition from supporters of the original satellite navigation project. But Mr Johnson was determined to keep OneWeb, a London-based company with operations on both sides of the Atlantic, in the UK.

As part of the deal the group has agreed to bring manufacturing of its satellites — currently made in Florida — back to the UK. The support for OneWeb underlines the UK government’s readiness to invest in “high risk, high pay-off” science projects.

David Morris, chair of the all-party parliamentary committee on space, welcomed news of the deal and the partnership with Bharti. The committee had been an early supporter of OneWeb as a means to boost Britain’s commercial space ambitions. “We . . . look forward to the innovation, opportunity and growth that space capability brings to a modern, globally-facing UK,” he added.  OneWeb has 74 satellites in orbit, and had planned to launch 550 more by end of next year. The group has the second largest low earth orbit satellite broadband network after Starlink, which has more than 500 in operation and plans at least 50 more this month. Consultancy McKinsey predicts that 50,000 low earth orbit satellites will be operating within 10 years.

 

Back to article list