OneWeb faces bankruptcy, even as it is about to launch more satellites
According to reports today, OneWeb, one of two companies presently building a constellation of satellites for providing worldwide internet access, is facing a serious cash crunch and might have to file for bankruptcy.
The main investor, Softbank, apparently is short of cash due to bad investments, worsened further by the stock market crash due to the Wuhan virus panic this week. Furthermore, the panic has caused Arianespace, which is launching many of OneWeb’s satellites, to suspend all launches from its French Guiana spaceport.
OneWeb has already launched 74 satellites, with a Soyuz launch of 34 more from Russia tomorrow. While fewer than the 360 that its main competitor SpaceX has launched of its Starlink constellation, OneWeb doesn’t need as many based on constellation’s design to become operational. After tomorrow’s launch, OneWeb will have launched about 18% needed, compared to SpaceX’s 24%.
If OneWeb goes out of business, it will do great harm to both Russia’s launch industry as well as Europe’s Arianespace, both of which have contracts for launching most of OneWeb’s satellites. In fact, for Russia, OneWeb is pretty much the only commercial customer they have. If they lose that it will be a serious financial blow.
Similarly, Arianespace’s next generation rocket, Ariane 6, has had problems garnering contracts. Losing the OneWeb launches will also hurt their bottom line.
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According to reports today, OneWeb, one of two companies presently building a constellation of satellites for providing worldwide internet access, is facing a serious cash crunch and might have to file for bankruptcy.
The main investor, Softbank, apparently is short of cash due to bad investments, worsened further by the stock market crash due to the Wuhan virus panic this week. Furthermore, the panic has caused Arianespace, which is launching many of OneWeb’s satellites, to suspend all launches from its French Guiana spaceport.
OneWeb has already launched 74 satellites, with a Soyuz launch of 34 more from Russia tomorrow. While fewer than the 360 that its main competitor SpaceX has launched of its Starlink constellation, OneWeb doesn’t need as many based on constellation’s design to become operational. After tomorrow’s launch, OneWeb will have launched about 18% needed, compared to SpaceX’s 24%.
If OneWeb goes out of business, it will do great harm to both Russia’s launch industry as well as Europe’s Arianespace, both of which have contracts for launching most of OneWeb’s satellites. In fact, for Russia, OneWeb is pretty much the only commercial customer they have. If they lose that it will be a serious financial blow.
Similarly, Arianespace’s next generation rocket, Ariane 6, has had problems garnering contracts. Losing the OneWeb launches will also hurt their bottom line.
Readers!
Please consider supporting my work here at Behind the Black. Your support allows me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Only now does it appear that Washington might finally recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
You can support me either by giving a one-time contribution or a regular subscription. There are four ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation or subscription:
4. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above.
This question is for anyone.
Can SpaceX configure those satellites to work within their own system?
eddie willers asked: “Can SpaceX configure those satellites to work within their own system?”
Probably not. The frequencies are different and the antennas are set up to work differently. Communications between the satellites was designed to be only within each constellation. In the case of bankruptcy, the best bet is for someone to buy OneWeb’s constellation and ground support and complete them.
Who needs to reframe the criteria for calling a pandemic! This is all ludicrous considering the deaths from the flu. As more people are tested (not just the critically ill) we will see the death rate drop to current flu rates.
Phill —
I agree that things, are getting out of hand.
Ref– Oneweb–
I don’t have the time, but dig up the actual Filing.
It has a value to somebody, either the parts (I would defer to others) or as a potentially (18%… hmm) going-concern, but at a hugely steep haircut.
[this, however, is an extremely bad time to have cash flow problems]
Lower in the article is this gem–
“Musk’s SpaceX is working on the Starlink network, and Amazon has plans for its own satellite constellation named Kuiper, to provide broadband connectivity from space.”
Musk is totally on track to be THE low cost provider, and Bezo’s has deep pockets, tough to compete against that pair.
Space junk
soon, those with dark skys will only see internet low orbit satellites
eddie willers,
What Edward said except for the following – “Communications between the satellites was designed to be only within each constellation.”
OneWeb’s satellites have no inter-satellite communications capability. Any communication between them has to go through ground stations. That is currently true of Starlink also, but inter-satellite comm links as well as on-orbit switching are planned for future versions of the Starlink birds, some of which may be launched later this year.
This is a big deal long-term because networks with no inter-satellite links will be both slower than those with such links and will also be subject to potential censorship of content at any ground station needed to relay content.
OneWeb deliberately crippled its network in this fashion to curry favor with totalitarian regimes such as those in Russia and China. In the case of Russia, OneWeb was also going to have to surrender half the revenue from Russian operations to Putin and his cronies. Even after making all these concessions the Russians still reneged on the tentative deal to allow OneWeb access to its market. That likely contributed to OneWeb’s financial difficulties.
A further, and perhaps even more consequential, contributor to OneWeb’s woes is that China already plans a LEO broadband constellation of its own and, so, can also ban OneWeb with no consequences. There’s also the high probability that the West in general, and the U.S. in particular, will be looking to unwind many of its current ties to China in the aftermath of the Covid-19 pandemic.
In the rest of the world, OneWeb is faced with the daunting challenge of competing on price and capacity with Starlink and perhaps, someday, even the still-notional Kuiper constellation Amazon has announced it intends to put up.
allow an MBA to shed some light here. Bankruptcy under Chapter 11 does not mean “we’re ceasing to operate”, it means “we’re no longer paying our debts”. Three outcomes are possible 1) The firm is reorganized with stockholders being wiped out and the creditors becoming equity holders with new stock. 2) The firm is sold (usually at a deep discount) to a either new investors or an existing entity 3) The firm is broken up and the pieces sold off. In outcomes 2 and 3, the stockholders are wiped out and the creditors take a haircut getting (usually) pennies on the dollar. So it is highly likely that the hardware will be used by someone
“So it is highly likely that the hardware will be used by someone.”
Yup.
Just look at Iridium.
The difficulty, of course, is not that the existing sats will be abandoned, but that OneWeb’s deployment of the constellation will get paused, possibly long enough to lose its chance of reaching the size required to secure its frequencies.