Eutelsat Joins OneWeb Consortium With $550M Investment
Eutelsat has joined the OneWeb investment consortium with a $550 million investment. This brings funding for the new iteration of OneWeb to $1.9 billion — 80% of what is needed to finance the first-generation constellation.
This is a vote of confidence in Low-Earth Orbit (LEO) for Eutelsat, a large satellite operator firmly entrenched in Geostationary Orbit (GEO). OneWeb said this partnership will bring Eutelsat’s relationships with governments and enterprise customers, and allow the companies to explore future GEO/LEO integrations.
Rodolphe Belmer, Eutelsat’s CEO commented: “We are excited to become a shareholder and partner in OneWeb in the run up to its commercial launch later in the year and to participate in the substantial opportunity represented by the LEO segment within our industry. We are confident in OneWeb’s right-to-win thanks to its earliness to market, priority spectrum rights and evolving, scalable technology.”
Earlier this month at the LEO Digital Forum, Belmer emphasized that LEO developments do not threaten Eutelsat’s core business in video.
“When we try to calculate what’s the production capacity of all the LEO constellations, we see absolutely no way, no possibility that those Low-Earth Orbit systems can fulfill demand,” Belmer said. “Geostationary satellites [are] by far the most cost effective, the most practical solution for broadcasting linear content.”
According to OneWeb’s Tuesday announcement, Eutelsat will receive a c.24% equity stake in OneWeb and similar governance rights to the U.K. government and Bharti Global, making it a significant equity partner and joining leading investors including the U.K. Government, Bharti Global and SoftBank. The investment is expected to be completed in the second half of 2021, and is subject to regulatory approvals.
This funding means that OneWeb is still seeking the remaining $450 million to fully fund its constellation. CEO Neil Masterson recently said at the LEO Digital Forum that he is “very confident” on that front.
On Monday, OneWeb completed the third launch in its “Five to 50” program — a five-launch stretch that will bring connectivity to all regions north of 50 degrees latitude by the middle of 2021. Global coverage is targeted for the end of 2022. OneWeb is targeting markets including government, cellular backhaul, and mobility markets like aviation and maritime, for its broadband connectivity.
In Tuesday’s announcement, the company said it is targeting annual revenues of approximately $1 billion in year three, or soon thereafter.
“As an open multi-national business, we are committed to serving the global needs of governments, businesses and communities across the world. Together we are stronger, benefitting from the entrepreneurial energy of Bharti, the extensive global outreach of the U.K. government, and the expertise in the satellite industry at Eutelsat. OneWeb, with its innovative and disruptive approach, is poised to take a leading position in LEO broadband connectivity,” said Sunil Bharti Mittal, founder and chairman of Bharti Enterprises.