OneWeb Take £200m Hit Over Scrapping of Russian Satellite Launch

British-registered OneWeb, which is building a mega constellation of Low Earth Orbit (LEO) based ultrafast low-latency broadband satellites, has confirmed in their accounts that they took a $229.2m (£199m) hit after Russia blocked the launch of 36 platforms earlier this year due to the war in Ukraine and related sanctions.

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.

However, their launch plans have since suffered a sizeable delay due to the need to find new launch partners, which occurred earlier this year after Russia invaded Ukraine and set off a chain of events that continues to unfold. The fallout from that (i.e. heavy sanctions and restrictions against Putin’s regime) also caught OneWeb and prevented further launches (here), which up until recently had been busy lofting their LEO platforms into space aboard Russia’s Soyuz rockets.

Russia is effectively still holding those satellites’ hostage, but OneWeb has otherwise been successful in signing deals with new partners for six launches (e.g. SpaceX, New Space India Limited etc.) and are expected to resume the process of rocketing those platforms into orbit before the end of this year.

In theory, the initial network of first generation (GEN1) satellites should now be completed by sometime later in 2023. But all of this has had a financial impact.

Extract from OneWeb’s Annual Report for 2022

The Group’s operating loss increased by 631% compared to the previous year after the impact of an impairment of $229.2 million. The impairment arose from the Russia-Ukraine war resulting in the postponement of a planned launch on 4 March 2022, the associated postponement of subsequent scheduled launches, the loss of satellites not returned to the Group and the impairment of a portion of the Group’s prepaid launch insurance. The operating loss for the year excluding the effect of the impairment was $196.7 million.

Not that any of this has dampened the interest in OneWeb’s future prospects, which was underlined by Eutelsat’s proposed merger terms (here).