London-based OneWeb, which is building a satellite constellation to deliver global broadband connectivity, has received a major investment from Eutelsat, reports the BBC.
Paris-based Eutelsat said it’s putting $550 million cash into OneWeb, for a 24 percent equity stake. That puts Eutelsat on even footing with the U.K. government and India-based telecom conglomerate Bharti Global as major stakeholders.
Closing on the investment is expected in the second half of this year, subject to regulatory authorizations. Eutelsat will finance its infusion with its liquidity position of more than $2.2 billion as of the end of March 2021 and $507 million in U.S. C-band auction proceeds. Eutelsat said its investment leaves OneWeb almost fully-funded and the company is well advanced in terms of securing its remaining monetary needs this year.
This will be seen as a big vote of confidence in the OneWeb project, notes the BBC. Eutelsat is one of the top satellite-telecommunications operators for “fixed services,” such as direct-to-home TV, phone and data connections.
OneWeb was bought out of bankruptcy last year by the British government and Bharti Global, with which Eutelsat will now share similar governance rights. The investment also closes the gap in funding necessary for OneWeb to complete its constellation.
On Sunday, it launched another 36 spacecraft, taking its total in-orbit network to 182. But to provide internet connections around the globe, it will require, initially, 648.
At the start of the year, the London company estimated that about $1 billion was needed to finish construction.
On Tuesday, new CEO Neil Masterson said: “We are delighted with the investment from Eutelsat, which validates our strategy, technology and commercial approach. We now have 80 percent of the necessary financing for the Gen 1 fleet, of which nearly 30 percent is already in space.”
Eutelsat operates its spacecraft from geostationary (GEO) orbit, about 22,000 miles above the Earth, giving the satellites a fixed, continuous view of the region on the Earth’s surface they serve. OneWeb is putting its constellation in low-Earth orbit (LEO), just about 745 miles above the planet.
Eutelsat says it sees its investment in OneWeb as a way to enter the LEO space, offering low latency of something like tens of milliseconds versus perhaps hundreds of milliseconds for GEO satellites to make an online query and receive an answer, according to the company.
OneWeb says its first generation of LEO satellites will offer significant regional coverage by the end of 2021, reaching global coverage the following year.
“Eutelsat’s global distribution network advances the market entry opportunities for OneWeb. And we look forward to working together to capitalize on the growth opportunity and accelerate the pace of execution,” said Masterson.
Marrying both LEO and GEO should open up business opportunities, Eutelsat CEO Rodolphe Belmer said. “We are excited to become a shareholder and partner in OneWeb in the run-up to its commercial launch later in the year and to participate in the substantial opportunity represented by the LEO segment within our industry.”
“We are confident in OneWeb’s right to win, thanks to its earliness to market, priority spectrum rights and evolving, scalable technology,” Belmer added. He’s referring to OneWeb competitors like SpaceX’s Starlink, Amazon’s Kuiper and Telesat’s Lightspeed, notes the BBC.
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