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UK government secure stake in satellite firm OneWeb

(Image credit: Shutterstock / Andrey Armyagov)

The UK government is to acquire in satellite firm OneWeb, allowing the firm to continue with its connectivity ambitions and enabling the development of a British global satellite navigation system.

London-based OneWeb filed for bankruptcy protection in March, leading to a bidding process for the company last week.

The Department for Business, Energy and Industrial Strategy (BIS) joined a consortium with Indian firm Bharti Global and was successful with its offer. The bid was worth around £1 billion, with the UK government stumping up around £400 million.

UK OneWeb

“The combination of [the UK government] and Bharti will bring immediate value as we develop as a global leader in low latency connectivity. This successful outcome for OneWeb underscores the confidence in our business, technology, and the work of our entire team. With differentiated and flexible technology, unique spectrum assets and a compelling market opportunity ahead of us, we are eager to conclude the process and get back to launching our satellites as soon as possible.”

OneWeb is headquarters are in the UK and the firm is regulated by Ofcom, however its management and manufacturing are largely American.

The company’s original initial intention was to create a network of satellites that could provide connectivity to connect parts of the Earth where it is impossible or uneconomical to use traditional technologies such as fibre or cellular.

The company had hoped to gain first mover advantage, and believed the combination of its harmonised spectrum and Low Earth Orbit (LEO) constellation design would give it technological supremacy.

The venture secured billions in cash from high-profile investors, with a funding round last year raising $1.25 billion from the likes of Japanese giant Softbank, Qualcomm and the Government of Rwanda. So far, it has launched 74 satellites and built 44 ground stations and had hoped to launch a total of 650 with a view to a commercial launch in 2021.

Bharti sees potential in this vision and believes its expertise in the telecoms sector, coupled with a presence in key South Asian and Sub-Saharan African markets, will see it realised.

The UK government believes the low-orbit satellites have other uses. British firms have been excluded from the EU’s Galileo project, which is building a European alternative to the US Global Positioning System (GPS) and Russia’s GLONASS.

However the development of a British venture from scratch would incur costs of several billion pounds. The government believes a stake in OneWeb will lower the barrier to entry, however some experts believe using a low-orbit constellation for such a purpose could be an expensive and challenging endeavour.

The agreement is subject to approval by OneWeb’s creditors.

“We are delighted to have concluded the sale process with such a positive outcome that will benefit not only OneWeb’s existing creditors, but also our employees, vendors, commercial partners, and supporters worldwide who believe in the mission and in the promise of global connectivity,” said Adrian Steckel, OneWeb CEO.