UK government defies critics and leads acquisition of sat tech firm OneWeb

Much to the surprise of many in the communications industry, the UK government has confirmed that, as part of a consortium, it will provide $500m to take ownership of financially troubled satellite technology provider OneWeb and deliver the UK’s first sovereign space capability.

Formed in 2012, OneWeb develops what the government claims is “cutting-edge” satellite technology from its bases in the UK and the US. Emulating Elon Musk’s Starlink project, it aims to implement a constellation of low Earth orbit (LEO) satellites with a network of global gateway stations and a range of user terminals to provide an affordable, fast, high-bandwidth and low-latency communications service, connected to internet of things (IoT) devices, and a pathway for mass adoption of 5G services.

In 2017, OneWeb was the first LEO constellation to receive approval to provide connectivity services in the US from telecoms regulator the Federal Communications Commission (FCC) in its first processing round for Ku/Ka-band systems. Since then, OneWeb has progressed in the build-out of its system, having launched 74 satellites to date and developed what it says is a significant portion of its ground network.

In August 2019, OneWeb met the requirements of the International Telecommunications Union and succeeded in bringing into use its global priority spectrum rights in the Ku- and Ka-band.

This new modification application, triggered in part by the FCC’s announcement of a second processing round for Ku/Ka-band systems, seeks to update OneWeb’s existing US authorisation to match the latest system specifications, while also requesting an increase in satellites for the constellation.

In May 2020, OneWeb submitted a modification request to the FCC to increase the number of satellites in its constellation to 48,000. This larger constellation is designed to allow for greater flexibility to meet what OneWeb regards as “soaring” global connectivity demands.

Yet such activity does not mask the fact that OneWeb filed for bankruptcy in March 2020 after failing to find private investment.

In addition to the UK government, the consortium buying OneWeb is also led by Bharti Global, which is also committing $500m. The partners say the bid is designed to capitalise the company sufficiently as a going concern to effectuate the full end-to-end deployment of the OneWeb system. Bharti will provide the company commercial and operational leadership, and bring OneWeb a revenue base to contribute towards its future success.

The deal is subject to US court approval and regulatory clearances and is expected to close before the end of the year.

The UK government claims that the move signals its ambition for the UK to be a pioneer in the research, development, manufacture and exploitation of novel satellite technologies through the ownership of a fleet of LEO satellites. It follows the formation of the UK’s first-ever National Space Council to consider how space policy can enhance the country’s prosperity and place in the world, as well as wider national security interests through secure communications.

The government adds that with a sovereign global satellite system, the UK will further develop its advanced manufacturing base, making the most of its highly skilled workforce as the hardware is further developed and equipment and services are deployed to make the most of what it calls “unique capability”. OneWeb will also contribute to the UK government’s plan to join the first rank of space nations.

Access to a global fleet of satellites has the potential to connect millions of people worldwide to broadband, many for the first time, and presents the opportunity to further develop a strong advanced manufacturing base in the UK, said business secretary Alok Sharma.

“The UK space sector is an economic success story, growing by over 60% since 2010,” he said. “The sector, which already supports £300bn of UK economic activity through the use of satellite services, is expected to grow further as new commercial opportunities are unlocked by this agreement.”

Yet many industry analysts question whether any commercial opportunities will be realised from OneWeb. In addition to its previously mentioned bankruptcy, OneWeb is the developer of a positioning system rivalling GPS and the EU’s Galileo satellite navigation systems, the latter of which involved the UK until it left the EU in January 2020.

Speaking to The Guardian newspaper just before the deal was confirmed, Bleddyn Bowen, a space policy expert at the University of Leicester, said that fundamentally, the UK had bought the wrong satellites. “OneWeb is working on basically the same idea as Elon Musk’s Starlink – a mega-constellation of satellites in low Earth orbit which are used to connect people on the ground to the internet,” he said. “What has happened is that the very talented lobbyists at OneWeb have convinced the government that we can completely redesign some of the satellites to piggyback a navigation payload on it.

“It’s bolting an unproven technology on to a mega-constellation that’s designed to do something else. It’s a tech and business gamble. If you want to replace GPS for military-grade systems, where you need encrypted, secure signals that are precise to centimetres, I’m not sure you can do that on satellites as small as OneWeb’s.”

Aiming to offer assurances on security, especially with potential defence use cases for OneWeb, the UK government said it would have a final say on any future sale of the company, and on future access to OneWeb technology by other countries on national security grounds.