Hughes pitches in $50 million to OneWeb rescue

Hughes Network Systems, a subsidiary of EchoStar, is participating in the U.K. Government and Bharti consortium acquiring OneWeb out of bankruptcy.  The company is putting in $50 million – a paltry sum compared to the combine $1 billion the other two are putting up – but will continue as a “trusted technology and distribution partner” for OneWeb as it continues to build out its satellite broadband network.

“We are pleased to be part of this winning team, along with the British Government and Bharti,” said Pradman Kaul, president, Hughes. “Our continuing and strengthened involvement with OneWeb extends naturally from our position as a leading geostationary satellite operator and ground network innovator, along with a meaningful partnership with Bharti and longstanding relationship with the U.K. through our business operations in both countries.”

Sunil Bharti Mittal, Founder and Chairman, Bharti Enterprises said “We are delighted to welcome Hughes to the consortium. The investment by Hughes underlines OneWeb’s exciting commercial prospects, reflected in the ongoing discussions with some of the world’s leading strategic and financial investors.”

Unsaid is Hughes protecting its role as a major hardware supplier to OneWeb for ground stations and end-user terminals. Hughes had already floated OneWeb $5 million, according to bankruptcy filings. Parent EchoStar bought in $1.9 billion in 2019 revenue so the company could presumably cover another $50 million out of cash.

OneWeb filed for bankruptcy in the spring, blaming its problems on the tightening of capital due to COVID-19.  The company had raised $3 billion in investments and was working with Softbank and others to secure another $3 billion in investments to complete the construction of its 648 satellite global broadband constellation.

Before filing for bankruptcy, OneWeb had launched 74 production satellite, built roughly half its ground stations, and successfully demonstrated the network could deliver over 400 Mbps downstream with latencies of around 32 ms.  No plans have been announced as to when OneWeb will resume operations to build and launch more satellites.

Doug Mohney

Doug Mohney, a principal at Cidera Analytics, has been working and writing about IT and satellite industries for over 20 years. His real world experience including stints at two start-ups, a commercial internet service provider that went public in 1997 for $150 million and a satellite internet broadband company. Follow him on Twitter at DougonTech or contact him at dmohney139 (at) gmail (dot) com.

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