OneWeb Seek £3bn to Expand Ultrafast Broadband Satellite Network
British satellite operator OneWeb, which is partly owned by the UK Government and various other investors, is reportedly seeking funding of around £3bn from a group of banks to help it cover the cost of massively expanding their ultrafast broadband network with second-generation (GEN2) satellites.
The company has so far managed to launch 428 of their small c.150kg Low Earth Orbit (LEO) based ultrafast (100Mbps+) and low-latency (sub-100ms) broadband satellites into space – orbiting at an altitude of around 1,200km – and their initial plan is to build a constellation of 648 (588 are needed for coverage – the rest are for redundancy), which is enough for a reasonable level of global coverage. This is due to complete by the end of 2023.
However, the operator has long been planning for what comes after their first constellation, which will require fresh investment. OneWeb already has approval for a total of 2,000 satellites (although they want to go beyond that) and 1,280 of those will be the GEN2 model that could sit in a higher Medium Earth Orbit (MEO) of 8,500km, which are widely expected to have more broadband capacity and introduce enhanced navigation and positioning features.
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The UK Government are quite keen on GPS-style navigation features, which is due to the post-Brexit loss of full access to the EU’s alternative Galileo system. The downside of MEOs is that their higher orbit would increase the network latency (server response times), albeit while enabling wider coverage. But this could be mitigated through clever use of both LEOs and MEOs (e.g. LEOs handling latency intensive apps, while MEOs do big data transfers). But we aren’t expecting to see the first non-trial MEO satellites until 2024-25.
In any case, such a plan would need a lot of extra funding. One potential source for that could be the proposed merger deal with existing investor and rival French operator Eutelsat (here), which has planned to set aside up to $5.3bn (£4.6bn) to complete OneWeb’s network and update its technology by 2030. But some of Eutelsat’s shareholders still need convincing, so it’s not yet a done deal.
According to the Mail on Sunday, OneWeb is working with the Government’s export credit agency – UK Export Finance (UKEF) – and a similar agency in the USA, to raise the funds from a group of banks (e.g. France-based BPI). The UKEF can provide funds and guarantees to lenders for firms in strategic industries exporting from the UK. But the talks are at an early stage and may take up to a year to finalise.
The Eutelsat merger, which is subject to clearance by the usual meetings and regulatory authorities, is expected to close by the end of the first half of 2023. In case it wasn’t already obvious, that’s roughly in keeping with the timeline for OneWeb’s funding negotiations with the banks. The merger would make such banks much more likely to approve new lending, but it could also give OneWeb a plan B in case the Eutelsat deal falls.
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The report claims that OneWeb will set out their plans for a future network next month, which should finally clear up some of the speculation around what features and enhancements their GEN2 satellites will include.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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Why don’t the government just invest the money directly instead of all this fund raising. There seems to be a disconnect with technology at a government level, and the result is all these projects end up getting privately funded and the tax payer foots the bill. Just cough up and fund these projects, same goes to nuclear power.
Are they finally using SpaceX or are the Brits too proud to use their launch services and instead are getting cancelled Russian rides that never launch XD
The British government is increasingly distancing itself from OneWeb, there have been no further ‘investments’ from them and their share holding is dwindling to become one of the smallest minorities.
Future OneWeb launches have been agreed with SpaceX and the commercial arm of the Indian space agency IRSO, assuming the Eutelsat merger goes ahead, their preferred launch provider Arianespace is likely to be employed going forward.
‘The Brits’ didn’t really have a say in which launch service provider are used, their golden share only gives them veto powers in regard to the sale of the firm… their ordinary share holding is now too small for for them alone to make other operational decisions.
The British government doesn’t use taxpayer funds, they just reach into the magic money universe and pay for everything with that… taxpayer funds are just shoveled into the ever growing void.
Presumably they can’t see a way for either themselves or their donors to personally profit, and they can’t really asset strip and sell off on the cheap in return for kickbacks.
Companies owned with a government majority stake end up becoming political footballs. Once run by the public sector they become incredibly inefficient. ‘It’s only tax payer money’. It just wouldn’t work due to the lack of incentives and private enterprise.
@William:
Yes, nothing should be in public hands, privatise the lot, it’ll save us a bloody fortune!
Just look at the shining examples of the water and energy firms they’re doing a fantastic job, very efficient next to zero waste or reliance on tax payer’s money!.. oh… wait… never mind…
“ Why don’t the government just invest the money directly”
Because of three reasons:
1. The funding / debt would sit on the government balance sheet
2. Due to state aid rules
3. There are willing private sector investors so there’s no need
@A tiny no-longer wanted slice of the pie – “the magic money universe”, you mean they don’t take responsibility for their tech projects and get the global market to fund them instead, resulting in no control? Sounds about right for the British Government.