Will OneWeb Catch Up to Competitors After Emerging from Chapter 11?

An artist’s rendition of the OneWeb constellation. Photo: OneWeb

OneWeb has emerged from Chapter 11 bankruptcy protection under the ownership of the U.K. government and Bharti Global, the company announced Friday, Nov. 20. This marks the start of OneWeb’s new iteration after it filed for bankruptcy in March, and allows the company to continue building a constellation of 650 satellites in Low-Earth Orbit (LEO) to provide broadband connectivity services. Neil Masterson, former co-chief operating officer of Thomson Reuters, has been appointed CEO. 

OneWeb is targeting Dec. 17 for it’s return to flight with a 36-satellite launch by Arianespace from the Vostochny Cosmodrome in Russia. Earlier this week, the satellites were shipped from OneWeb Satellites production facility in Florida to Vostochny and are now undergoing preparation for launch. OneWeb Satellites, a joint venture with Airbus, has been reactivated and the dual production lines brought back into service. OneWeb has 74 satellites in-orbit. 

The company plans to continue launches through 2021 and 2022, in order to begin commercial connectivity services to the U.K. and the Arctic region in late 2021, with plans to expand to global services in 2022.

“OneWeb has a strong social purpose to improve the world’s access to information, which I share. It has great talent, a compelling commercial opportunity, and is supported by committed and knowledgeable owners and investors,” Masterson commented in the release. “Our December launch puts the U.K. firmly in the global space business, alongside acknowledged Indian telecoms experts, Bharti Global. OneWeb will be a model for responsible cooperation in Space.”

Masterson worked for 20 years at Thomson Reuters, which sells software and tools for legal and tax professionals, and the news service Reuters. Masterson is currently based in New York and will relocate to the U.K. Former OneWeb CEO Adrian Steckel has been appointed adviser to the board. 

This announcement follows after the United States Bankruptcy Court for the Southern District of New York approved OneWeb’s Chapter 11 plan of reorganization in October. The U.K. government and Bharti in July announced their intent to acquire OneWeb with $500 million investment from each entity. Hughes Network Systems joined the consortium with a $50 million investment later that month. 

Under the bankruptcy exit plan, OneWeb is owned roughly 85% by the U.K. government and Bharti, and the remaining 15% Softbank and other secured creditors as part of the settlement. 

Sunil Bharti Mittal, founder and chairman of Bharti Enterprises, pointed to the value of OneWeb’s global spectrum with priority rights, and said the consortium will benefit from the $3.3 billion that has previously been invested, and the satellites in-orbit. 

“These are exciting times and the world now has a LEO alternative to work with. We look forward to partnering with those equally determined to enter this new Space Age. There is unmet demand around the globe for broadband connectivity and we intend to continue OneWeb’s social mission. We will use our joint venture facility to drive down cost of service, opening new use cases for low latency broadband provision,” Bharti Mittal said in the release. 

A New Direction?

OneWeb has pitched its service as a high-speed, low latency connectivity solution for high-end markets like maritime, aviation, enterprise, and government and cell backhaul, but it remains to be seen if the new iteration will shift the company’s target markets. 

NSR senior analyst Gagan Agrawal told Via Satellite he believes the U.K. sees OneWeb mainly as a way to boost its position in the space race. There has been speculation in the U.K. about using OneWeb as a Position, Navigation and Timing (PNT) system, but that is not an easy option, he said. 

Agrawal believes that Bharti, with its position in the Indian and African markets, will encourage backhaul and military applications in those areas. He said with Bharti having Indian owners, it may allow OneWeb to operate in India, where there are restrictions on private players in the space industry. 

Agrawal will be watching for OneWeb to complete its launch next month, and how Arctic operations and testing progress in 2021.

“I want to see some of these MOUs starting to convert to deals,” Agrawal said of previous OneWeb MOUs with distribution partners. “Given that OneWeb is largely a wholesale provider, not direct-to-consumer, these backlog contracts are extremely essential for us to understand how they’re going to move forward with this strategy.” 

Nathan de Ruiter, Euroconsult managing director of Canada, said that OneWeb lost its early mover advantage, as SpaceX put up hundreds of Starlink satellites while the company was in Chapter 11 and is already in public beta testing. Now, by the time OneWeb satellites are launched they will be competing also with upcoming Viasat’s Viasat-3 satellites, and O3b mPOWER from SES. 

At the same time, he said if OneWeb plans to mainly targets mobility applications, maybe the bankruptcy was good timing as the COVID-19 pandemic hit those markets hard in 2020. 

De Ruiter pointed to OneWeb’s advantage of true global coverage, that it will cover the Arctic region: “The Arctic is really a pain point where there’s a lack of kind of connectivity, it’s one of these key areas of interest. In terms of mobility, there may be some advantages with the Arctic, the northern shipping route, and polar flights. Those are markets — but is it significant [enough] to finance and fund a full global constellation?” 

De Ruiter said that many questions that still remain — whether OneWeb will stick to the original satellite design, and how much capital will be needed finish building and launching its constellation, if OneWeb will pivot on target markets, and how it will accelerate terminal development to meet the timelines it has set. 

Betty Bonnardel-Azzarelli, co-founder and director of Access Space Alliance, which supports the U.K. smallsat sector, commented to Via Satellite that this news is a positive signal to the space industry as a whole and for the small satellite market in the U.K. She said: “It shows that there is strong support for innovative telecom technologies and their potential for improving connectivity around the globe. In particular for the four U.K. nations, OneWeb is a great opportunity for servicing unconnected homes in remote places.”