Softbank Invests $350m in OneWeb’s LEO Satellite Broadband Network

In an interesting development OneWeb, which is owned by a consortium of the UK Government and Indian conglomerate Bharti Global (here), has secured an investment of $350m (c.£257m) from Japanese company Softbank – the same firm that effectively forced it into bankruptcy last year by putting a stop on further funding.

At present OneWeb, under its new owners, is rapidly getting back into the business of building a mega constellation of “high-speed” broadband satellites in Low Earth Orbit (LEO). A total of 110 LEOs have already been launched into space (36 were added last month) and the initial plan is to build a constellation of 648 satellites, which is enough for a reasonable level of global coverage by around the end of 2022.

After that they have future approval for a total of 2,000 satellites and 1,280 of those will be a second-generation model that sits in a higher Medium Earth Orbit (MEO) of 8,500km. We strongly suspect that the MEO generation may add some global navigation technologies too, provided enough investment can be found to support its deployment.

At this point it’s worth remembering that OneWeb started life with support of around $3bn from SoftBank, but the Japanese company had problems of its own and put the brakes on fresh funding a year ago. This ultimately resulted in the space firm filing for voluntary relief under Chapter 11 of the Bankruptcy Code in the USA.

Today the satellite business is under new ownership and has recently been trying to secure additional funding for their initial fleet. As part of that SoftBank already holds a stake of c.9% after converting $90m of debt into equity as part of the rescue deal, but on top of this they’ve now agreed to put $350m into the space firm (they also gain a seat on the Board). In addition, Hughes Network Systems will add $50m (overall investment total of $1.4bn).

Neil Masterson, CEO of OneWeb, said:

“OneWeb’s mission is to connect everyone, everywhere. We have made rapid progress to re-start the business since emerging from Chapter 11 in November. We welcome the investments by SoftBank and Hughes as further proof of progress towards delivering our goal.”

The deal means that SoftBank now owns roughly 30% of OneWeb, which dilutes the stakes held by the UK and Bharti to 42.2%, although the UK Government will still retain their golden share. According to the announcement, this funding “positions the Company to be fully funded for its first-generation satellite fleet, totalling 648 satellites” (i.e. reports suggest they’ll still need another $1bn to complete that).

At present no funding exists to build or launch the future generation of MEOs, but that’s still a long way off in the distance and design work can still take place. Plans are also being developed for going beyond the current strategy of 2,000 satellites, but that is even further off and currently lacks regulatory approval (a total constellation of 6,372 is proposed).