Last week, on March 27, satellite broadband provider OneWeb filed for bankruptcy in New York and put itself on the auction block. Will the company go the way of Iridium, being purchased by a suitor and with a strong anchor customer lined up? If it can’t, it will have to shutdown operations and de-orbit the 74 satellites it put into space. Prior to the announcement, the company conducted a 10 percent reduction in force earlier in the week.
“OneWeb has been building a truly global communications network to provide high-speed low latency broadband everywhere,” said Adrian Steckel, Chief Executive Officer of OneWeb. “Our current situation is a consequence of the economic impact of the COVID-19 crisis. We remain convinced of the social and economic value of our mission to connect everyone everywhere. Today is a difficult day for us at OneWeb. So many people have dedicated so much energy, effort, and passion to this company and our mission. Our hope is that this process will allow us to carve a path forward that leads to the completion of our mission, building on the years of effort and the billions of invested capital. It is with a very heavy heart that we have been forced to reduce our workforce and enter the Chapter 11 process while the Company’s remaining employees are focused on responsibly managing our nascent constellation and working with the Court and investors.”
OneWeb has been seeking to fully fund the company through its deployment and commercial services availability since the beginning of the year, according to the company’s press release, but “the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19.”
Satellite business analyst were skeptical of the OneWeb’s ability to secure financing before COVID-19, saying it would take around $3 billion more to build and launch the existing satellites and complete its ground network. SoftBank and other existing investors failed to reach agreement in the fall of 2019, leading to speculation the company was going to file for bankruptcy.
Assets OneWeb has to offer to a potential buyer include the aforementioned 74 satellites, secured global spectrum – arguably the most valuable asset it has, has half of its 44 ground stations completed or in development, and performed successful demonstrations of its system with broadband speeds of over 400 Mbps and latency of 32 ms.
OneWeb had raised a total of $3.4 billion in financing, with participation by SoftBank, Group Salinas, Qualcomm, and the Government of Rwanda among others. The company claims it has seen “significant early global demand” for OneWeb broadband services from governments and companies in the automotive, maritime, enterprise, and aviation sectors.
Speculation as to the futures of SpaceX’s Starlink and Telesat’s respective broadband LEO constellations is also on the table. SpaceX has deployed more satellites, but the company’s overall financial health remains opaque since it is a private company. Telesat has yet to select a group to build satellites and ground equipment for its LEO constellation, with the COVID-19 crisis allowing them to further delay a decision and squeeze vendors more on price.