After a turbulent year for OneWeb, the company is regularly launching batches of satellites to build out its promised constellation, which is expected to provide more service to northern Canada as soon as this year.
The last few weeks saw a flurry of business activity after OneWeb’s latest launch of 36 satellites into orbit April 26, bringing its total in orbit to 182 out of a planned constellation of 648. OneWeb has not disclosed how many of its current fleet is commissioned, but has said service is slated to start by the end of 2021.
This latest launch is the third of five planned ones OneWeb will offer for services in Canada and other northern regions. Future launches this year are expected on May 27 and July 1 along with another five planned for the rest of the year.
More funding for OneWeb also was announced recently. The next day after the launch, April 27, OneWeb said it would receive $550 million USD in funding from Eutelsat Communications, making total funding $1.9 billion once approved. The projected infusion of cash – once approved – will bring OneWeb 80 percent of the way to funding its satellite fleet.
OneWeb entered bankruptcy protection in March 2020, just as the pandemic hit hard around the world, laying off most of its workforce while keeping control of its operational satellites during court protection procedures. In November, a new ownership group took over, led by the Government of the United Kingdom and Bharti Global; they each hold 42 percent of the company’s equity and board.
Eutelsat, a traditionally geostationary focused company, will do well in diversifying to low-Earth orbit constellations with OneWeb, Jefferies satellite equity analyst Giles Thorne wrote in a research note. But given OneWeb’s delicate financial situation, he noted, Eutelsat is taking a risk in putting all of their C-band proceeds “towards a moonshot,” he said.
“Some might quibble with that characterization, but none can conjure any heritage of Ku-band spectrum being viably monetized from low-Earth orbit,” Thorne added. “SoftBank’s withdrawal of funding from OneWeb less than a year [ago] is a firm reminder of that.”
In quarterly financial results posted May 11, Eutelsat hinted at a motivation for the OneWeb deal. Eutelsat’s financials showed that broadband is the only one of its verticals that reported a year-over-year increase; that vertical rose slightly by almost two percent to $25 million USD (20.5 million euros) in the first three months of 2021, compared with last year. Eutelsat noted that full-year revenues overall across all verticals should be higher than forecast when its current fiscal year closes on June 30.
As OneWeb is privately held, we do not have much detail yet on its finances. Early-stage space companies, however, often rely on equity funding to build out infrastructure, until that costly phase is past and they can maintain profitability through customer wins and service agreements.
Previously OneWeb had been considering launching around 2,500 satellites as of plans announced to media in February 2017. For now, however, OneWeb is focused on a more conservative first phase of 648 satellites and has not yet discussed at length what it will do after the fleet is operational.
OneWeb also plans to beef up its Arctic services in the United States, which may have eventual implications for Canada given a business need driven by a lag in connectivity in higher latitudes. On May 5, Hughes Network Systems and OneWeb together announced that the U.S. Air Force Research Lab selected them “to connect the Arctic region to sites around the globe.”
The pact (whose value was not disclosed) calls for Hughes to test and implement services through the OneWeb system that would run between U.S. Northern Command locations. The companies called this “a first step in harnessing the power of LEO [low-Earth orbit] satellites for high-speed, low-latency broadband access in the Arctic.”
OneWeb has two satellite operations centres in Virginia and London (United Kingdom); the company has not disclosed the number of ground stations it has, nor their locations. Media reports say OneWeb has three United States stations in Alaska, Connecticut and Florida and facilities in Norway and Portugal.
Amid the company’s growth, projected headwinds for OneWeb include stiff competition from larger players in the satellite constellation business (such as SpaceX and Amazon) and ongoing concerns from the astronomy community about the effect of such constellations on observations, particularly wide-field or space defence-related telescopic operations.
That said, OneWeb is leaning hard into Arctic services this quarter, with a late-breaking announcement May 10 pledging OneWeb would acquire TrustComm, a satellite services firm, to provide more government services at northern latitudes. The deal’s value was not disclosed, but OneWeb’s head of government services Dylan Browne said the acquisition would “rapidly scale” their work for the U.S. Department of Defense and other government agencies.
Note: Additional contributions to the story were made by SpaceQ editor Marc Boucher.