Broadband satellite network operator Hughes Network Systems yesterday committed $50m to join conglomerate Bharti Enterprises and the UK government in purchasing UK-based satellite internet services provider OneWeb.
Bharti Enterprises’ UK subsidiary, Bharti Global, and the British government, represented by the Secretary of State for Business, Energy and Industrial Strategy – a position currently held by Alok Sharma – made a winning $1bn bid for the bankrupt business earlier this month.
The acquisition remains subject to certain conditions, including those established by the US Bankruptcy Court. It is expected to close by the end of the year.
Founded in 2012 as WorldVu, OneWeb’s goal is to build a constellation of 650 low Earth orbit satellites to deliver internet access to rural and remote areas. It launched 74 satellites before filing for bankrupty in March this year.
The UK government’s purchase of OneWeb is reportedly motivated by its desire to build a homegrown alternative to Galileo, the EU-owned global navigation satellite system being developed to be less reliant on the US military-controlled GPS.
The country will lose access to Galileo once its departure from the union is finalised in December 2020, however, the feasibility of adapting OneWeb’s constellation for a positioning system has been called into question by experts because its satellites are too small and too close to Earth.
OneWeb raised $3.4bn in funding altogether before it entered bankruptcy proceedings.
Mobile chipmaker Qualcomm, telecoms group SoftBank, conglomerate Grupo Salinas (the owner of telecoms network operator Totalplay) and the government of Rwanda contributed to a $1.25bn funding round in March 2019.
SoftBank led a $1.2bn round in 2016, with participation from returning backers Hughes, Qualcomm, Totalplay, Bharti, aerospace and defence company Airbus, conglomerate Virign, drinks maker Coca-Cola Company and satellite technology provider Intelsat.
