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OneWeb signs deal with SpaceX to launch its remaining satellites, replacing Russia

Capitalism in space: Just 18 days after its contract with Arianespace was suspended because of Russia invasion of the Ukraine, OneWeb has now signed a deal with SpaceX to use its Falcon 9 rocket to launch the remaining 200+ satellites in its satellite constellation.

Few details about the agreement were released Monday morning. “Terms of the agreement with SpaceX are confidential,” OneWeb said in a statement.

OneWeb said the “first launch” with SpaceX is expected before the end of this year, suggesting the company anticipates multiple flights on SpaceX rockets.

It appears that launches could start before the end of this year

There are two big losers in this story. The obvious one is Russia, as it has lost OneWeb as a satellite customer. The second, less obvious, is Arianespace, as it appears it has also lost OneWeb as a customer. It will also have to refund OneWeb any payments the satellite company made for launches that have not occurred, even those that Arianespace had paid Russia for which Russia is refusing to refund.

Though no details have been released about the deal, I would not be surprised if OneWeb got a better price than what it was paying Arianespace. I also suspect that Elon Musk was willing to make this deal with OneWeb, the prime competitor to his Starlink satellite constellation, because he favors the Ukraine in this war.

Finally, this deal will not only make Russia look bad, it will make SpaceX look magnificent. Its PR value cannot be measured for the company.

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26 comments

  • David Eastman

    I think you mean “Launch it’s remaining satellites” for the headline.

  • geoffc

    I am surprised. Launching a direct competitor. But as noted, the PR value will be immense. So confident in Starlink they will even launch the competing service, cheaper than their previous launch provider, is quite the statement.

    Makes an amazing example of how they can keep their launch business disconnected from their services (Starlink) business.

    Well done SpaceX indeed!

  • David Eastman: Fixed already. Thank you though.

  • pawn

    This is very odd. I don’t understand the business case here at all.

  • Tom

    pawn,

    The case for doing business completely eclipsed the “business case” here. As Bob said, the good will/PR coup alone is something that just cannot be bought with money these days.

  • Diane E Wilson

    Elon has said in the past that SpaceX is a transportation company. The business case is that SpaceX gets paid for launching satellites.

    One would also assume that Elon is sufficiently confident in Starlink that he is not concerned about competition from OneWeb.

  • David Eastman

    I think from the point of view of SpaceX, the decision was easy. There are basically three possibilities:
    1. Oneweb can’t find another launch provider, refusing them would remove a satellite competitor. Good, but not critical if you believe in Starlink.
    2. Oneweb can find another launch provider, who will be more expensive and slower to launch the constellation. Pushing them off is a small net gain for Starlink vs Oneweb, but again if you believe in Starlink that’s not a big deal.
    3. Oneweb finds a launch provider that is able to use that extra booked manifest to increase their capability and become a more viable competitor to SpaceX.

    I just don’t see an upside in turning down the business that matches the upside in taking the business, the cash, and the good will.

    From OneWeb’s perspective, it’s seems like an easy decision. Their only competitive interest in SpaceX as a launch provider is that it’s a shared company with Starlink. But how big a boost is it to Starlink that SpaceX gets another dozen launches? Probably not very much. And launching via SpaceX will get their satellites on orbit and returning revenue vastly sooner than any other possible provider.

  • JhonB

    I think the issues that SpaceX had with selling dishes in India will go away soon. Probably part of the deal.

  • JhonB: Woo-hoo! Excellent catch. I think you are right, it could very well be that part of the deal required OneWeb to use its influence to clear away this India problem for Starlink.

  • Col Beausabre

    Pawn – it also keeps the regulators away and investigating whether Starlink and SpaceX are really conducting “arms length” transactions. The example of United Aircraft and Transportation is instructive – you can get TOO integrated.

    “The United Aircraft and Transport Corporation was formed in 1929, when William Boeing of Boeing Airplane & Transport Corporation teamed up with Frederick Rentschler of Pratt & Whitney to form a large, vertically-integrated, amalgamated firm, uniting business interests in all aspects of aviation—a combination of aircraft engine and airframe manufacturing and airline business, to serve all aviation markets, both civil aviation (cargo, passenger, private, air mail) and military aviation.

    With headquarters at Hartford, Connecticut, the holding company controlled the stock of the Boeing Airplane Company of Seattle, the Chance Vought Corporation, the Hamilton Aero Manufacturing Company (a propeller manufacturer), and the Pratt & Whitney Aircraft Company, an aeroengine manufacturer. Sikorsky Aviation Corporation, the Stearman Aircraft Company of Wichita, Kansas, and the Standard Steel Propeller Company were added to United’s portfolio shortly thereafter, followed by several more airlines brought into the fold. The airline interests were soon grouped under a new management company known as United Air Lines, Inc. However, the individual airlines (as well as the individual companies held by United) continued to operate under their own names.

    After the Air Mail scandal of 1934, the U.S. government concluded that such large holding companies as United Aircraft and Transport were anti-competitive, and new antitrust laws were passed forbidding airframe or engine manufacturers from having interests in airlines. This law forced United Aircraft and Transport to split into three separate companies. Its manufacturing interests east of the Mississippi River (Pratt & Whitney, Sikorsky, Vought, and Hamilton Standard Propeller Company) were merged as United Aircraft Corporation (later United Technologies Corporation), headquartered in Hartford with Rentschler as president. The western manufacturing interests (including Northrop Aviation Corporation, formerly Avion Corporation), became Boeing Airplane Company, headquartered in Seattle. The airline interests were merged into a single airline, United Air Lines.”

    The problem was that Boeing was giving preference to United Airlines over its competitors in the price and delivery of the most advanced airliner of the day, the Model 247, giving it a competitive advantage

    Having a competitor to Starlink a customer of SpaceX helps make the case the later is not making “sweet heart deals” with the former in violation of anti-trust statutes.

    What was the 247? https://en.wikipedia.org/wiki/Boeing_247

    Also, note that Vought, Pratt & Whitney and Hamilton Standard combined to build 12,571 copies of the immortal F4U Corsair carrier based fighter of World War 2 and Korea

    https://en.wikipedia.org/wiki/Vought_F4U_Corsair

  • Col Beausabre

    For “can’t” substitute “can”

  • William

    Mr Musk is a gentleman and a scholar. He is willingly aiding a competitor unlike the typical evil billionaires who populate our world. I cannot imagine Lex Luthor or his ilk acting in this manner.

  • Steve Richter

    little off topic, but could starlink satellites carry a small telescope? Then hobby astronomers could reserve time on the telescope to look at a planet or distant star. Kind of a way to make up for whatever disruptions starlink causes to earth based amateur astronomers. I am assuming that a small telescope in earth orbit can see further than a large telescope on earth. But maybe that is wrong.

  • Jeff Wright

    He did it for the luls…tough to keep from laughing….I wonder if the range safety will retire in style after he has his seizure-whoops!

  • Col Beausabre: Fixed it for you, I think.

  • Steve Richter: In a word, no. Starlink satellites are designed for communications. Putting a telescope on them would make both purposes fail, while raising their cost.

    Also, a larger telescope doesn’s so much see farther, but has a higher resolution, so that it can sharply focus smaller and thus more distant objects. Because of the Earth’s atmosphere, however, a much smaller telescope in space can see far better than a bigger telescop on Earth, because the atmosphere blurs the image.

    For example, Hubble has a primary mirror 2.4 meters across. Yet it can view distant faint and tiny objects much better than the 10-meter mirror of the Keck Telescopes in Hawaii.

  • mpthompson

    I also suspect that Elon Musk was willing to make this deal with OneWeb, the prime competitor to his Starlink satellite constellation, because he favors the Ukraine in this war.

    I fail to see the connection here. If OneWeb was without a launch provider because Arianespace proved to be unflyable for some other reason, I presume SpaceX would have made the same offer. Well, perhaps the terms might be a bit different, but that is impossible to know. I suspect JhonB is correct in that this will somehow help Starlink in India.

    In any case, it is indeed good news that SpaceX can help out in this way. I wonder if OneWeb will end up paying less, in the long run, to launch their constellation due to this deal.

  • mpthompson: The connection might not be logical, but emotional. Musk’s quick response with Starlink to help the Ukraine indicates who he favors (though of course that action also got him more business and good PR). In this case, picking up OneWeb’s launches from Russia bites the Ukraine’s opponent. While it is doubtful Russia would have ever launched those satellites, this deal guarantees it.

  • Richard M

    This is very odd. I don’t understand the business case here at all.

    For OneWeb, I think the business case is quite simple: They can’t afford to wait to complete the constellation, and no one else can do it remotely as fast as SpaceX. As is, SpaceX can’t get them done by August (there’s not enough time), as would have happened with Soyuz.

    As for SpaceX, it’s revenue to book. Both Elon and Gwynne have been on the record repeatedly that SpaceX would be happy to launch competing constellations if they ask to buy launches. I expect there are a number of reasons for this, not least of which is that they are not a full overlap for market reach.

  • Alton

    Steve:

    Question who would design and build it?

    ——–
    How Starlink satellites work. The current version of each Starlink satellite weighs 573 lbs. (260 kilograms) and is, according to Sky & Telescope magazine, roughly the size of a table.Jan 7, 2022

  • pawn

    “Both Elon and Gwynne have been on the record repeatedly that SpaceX would be happy to launch competing constellations if they ask to buy launches.”

    I was not aware of this. Mr. Musk is a rare individual. He’s got a game plan and it seems that money isn’t everything to him. In his case it seems to be more of a vision than a game plane.

  • Edward

    What an irony this is. SpaceX angers Russia by sending Starlink terminals to Ukraine, and in response Russia arranges for SpaceX a couple hundred million dollars more business. Well done Rogozin.

    From the article:

    Analysts said SpaceX — with its already high flight rate and inventory of reusable boosters — was likely to be the best bet for OneWeb to get the rest of its satellites up quickly.

    Reusability shows its advantages yet again. SpaceX was chosen because of its availability, which exists because of reusability.

    I can’t find the quote, but I keep saying that Red Adair famously said, “I can do it fast; I can do it cheap; I can do it well. Choose two.” As a startup, SpaceX has been able to accomplish improvements in all three. The challenge is for other launch companies to compete. Blue Origin and Rocket Lab are the first two to try.

    Competition: it makes the world a better place.

    geoffc wrote: “I am surprised. Launching a direct competitor.

    I am not surprised. In the short run, it is revenue, which SpaceX needs to develop its current projects. In the long run, it is competition, which SpaceX desires. This also puts pressure on SpaceX to launch at a higher cadence than it would otherwise have done, desirable in both the short run and the long run.

    A company that rests on its laurels gets surprised by its competition. A company that continues to innovate and improve surprises the competition.

    I tend to agree with other speculations about the benefits that SpaceX gains by doing this deal — especially Robert’s point that the Russian snub on OneWeb is not as hurtful as Russia may have intended. It looks to me as though everyone wins, except for the Russians and Arianespace which is unlikely to ever trust a partnership with Russia ever again. In a way, that may be a long-term win for Arianespace, too.

    Steve,
    A decades ago Planetary Resources had this in mind in order to fund development of its asteroid mining business. Unfortunately, this did not work out for them, though. Maybe it makes better business sense now.

    However, it is sometimes wiser to limit the number of things that a satellite does. In the past few decades, they would make large satellites that did a lot of things, but this was partly in response to the expense of satellites and the expense of launches. These days both cost less, so it makes more sense to specialize the satellites and reduce the complications that come from having multiple payloads on one satellite.

  • Igor

    Somehow, I just don’t think Elon puts that much stock in being out-competed in the satellite Internet business.

    And, as pointed out above, it shows that SpaceX is more than a little “decoupled” from Starlink which makes the anti-trust people mollified. For now, anyway.

    Side note – Starlink just raised its rate per month from $99 to $110, but them’s the breaks. Thanks, Joe!

  • Col Beausabre

    What everybody forgets. It’s a chance to rub Rogozin’s face in it. Too delicious to pass up

  • Jay

    Igor,
    Yep, I got the email too. It is still cheaper and faster than HughesNet!

  • Questioner

    As far as I know, Elon Musk is heavily invested in China and has big plans there. The Chinese, who do not support US actions and views against Russia on the Ukraine issue, are therefore closely watching what Elon Musk is doing. The fact that he is politically involved in this matter may be a brief PR success with the excited, manipulated and lied-to US public, but it can seriously damage his China plans. So it would certainly be wiser for him to stay out of politics. There are already enough people who have to show “attitude”.

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