The UK government has announced that it is set to spend £400 million on a stake in bankrupt satellite firm OneWeb, as part of its post-Brexit plan to replace the loss of access to the EU’s Galileo sat-nav system.
OneWeb declared itself bankrupt back in May after the company racked up $2 billion in debt, but the government’s pledge will see the UK able to access the firm’s 74 space-based satellites, building on its pledge from last month to make “high-risk, high-reward” investments in promising new technology.
The UK government joins India’s telecommunications tycoon Bharti Global – which is also due to make an equal £400 million contribution – in OneWeb’s project, designed to provide broadband from space. Together, the UK and India have boosted OneWeb with a total of $1 billion in new funding.
We are excited to announce that a consortium of @beisgovuk & Bharti Global have committed to provide more than USD$1 billion to acquire OneWeb and fund the full restart of our business operations. (1/7)
— OneWeb (@OneWeb) July 3, 2020
OneWeb currently operates 74 satellites in low Earth orbit, but the company’s press release fails to clarify if the Anglo-Indian investment is to be used to complete its original plans to install an extensive 650-satellite constellation before it filed for bankruptcy.
Nevertheless, the response from the UK side of the deal has been overwhelmingly positive. Business Secretary Alok Sharma hailed the investment as the first step towards the “first UK sovereign space capability” and puts the UK in slightly better stead ahead of its long-awaited exit from the EU this October.
In a statement on the news, Sharma brightly said:
“This deal underlines the scale of Britain’s ambitions on the global stage. Our access to a global fleet of satellites has the potential to connect millions of people worldwide to broadband, many for the first time, and the deal presents the opportunity to further develop our strong advanced manufacturing base right here in the UK”.
OneWeb stated on its press journal that the coronavirus pandemic has highlighted the “tremendous potential” and “demand for a new mix of connectivity services”. The UK’s nationwide work from home trend during lockdown has no doubt emphasised the importance of staying connected, and the bid for OneWeb’s satellite system shows that the UK government is well aware that it cannot afford to lose out on the broadband front once Brexit goes through.
Adrian Steckel, OneWeb’s CEO, commented on the firm’s announcement:
“We are delighted to have concluded the sale process with such a positive outcome that will benefit not only OneWeb’s existing creditors, but also our employees, vendors, commercial partners, and supporters worldwide who believe in the mission and in the promise of global connectivity. The combination of HMG [Her Majesty’s Government] and Bharti will bring immediate value as we develop as a global leader in low latency connectivity. This successful outcome for OneWeb underscores the confidence in our business, technology, and the work of our entire team. With differentiated and flexible technology, unique spectrum assets and a compelling market opportunity ahead of us, we are eager to conclude the process and get back to launching our satellites as soon as possible”.
The deal is still subject to approval from the U.S. Bankruptcy Court, but is expected to be sealed by 2020’s fourth quarter. In the meantime, the UK government and Bharti are to work alongside OneWeb’s management team to “further develop the strategy and business plan” as the satellite firm prepares to relaunch its regular schedule in the coming weeks.