On Tuesday, global space communications network OneWeb announced a $550 million funding round led by Paris-listed satellite company Eutelsat, bringing its total funding to $1.9 billion. In a statement on the round, OneWeb called the investment from Eutelsat, one of the world’s most experienced and largest global [satellite] operators, a “vote of confidence in OneWeb,” and one which “underscores the arrival of Low Earth Orbit (LEO) satellites into mainstream long-term growth planning for major operators.”
Eutelsat will assume an estimated 24 percent equity stake in OneWeb, with similar governance rights to the U.K. Government and Bharti Global (which both own highly influential stakes in the company), and bringing the firm alongside SoftBank as a leading investor.
OneWeb’s fleet of 648 LEO satellites will provide high-speed, low-latency global connectivity to Eutelsat, which operates global geostationary satellites, in a deal expected to enhance both companies’ commercial potential. Eutelsat will leverage its commercial reach with government and enterprise clients, as well as its network of institutional relationships, technical expertise and a global fleet. OneWeb’s ability to address multiple applications requiring low latency and ubiquity will also allow both companies to explore GEO/LEO configurations for future service integrations and packages.
Per Eutelsat, OneWeb will be the first complete non-geostationary constellation with truly global coverage, with a significant lead over competing projects. It will deliver 1.1 Tbps of capacity serving the global government, fixed data and mobility markets. Plans include a second-generation constellation that will provide significant enhancements in terms of capacity, flexibility and economics.
After OneWeb completes the full deployment of the constellation, the company anticipates annual revenues of approximately $1 billion in year three or shortly thereafter.
GEO meets LEO
In an official statement on the deal, Sunil Bharti Mittal, Founder and Chairman of OneWeb owner Bharti Enterprises said the company was “delighted to welcome Eutelsat into the OneWeb family.”
“As an open multi-national business, we are committed to serving the global needs of governments, businesses and communities across the world,” Mittal said. “Together we are stronger, benefitting from the entrepreneurial energy of Bharti, the extensive global outreach of the U.K. Government and the expertise in the satellite industry at Eutelsat. OneWeb, with its innovative and disruptive approach, is poised to take a leading position in LEO broadband connectivity.”
OneWeb CEO Neil Masterson said the Eutelsat investment brings the firm to 80 percent of the necessary financing for total deployment of its Gen 1 fleet, 30 percent of which is already in space.
“We are delighted with the investment from Eutelsat, which validates our strategy, technology and commercial approach,” Masterson said. “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.”
Eutelsat CEO Rodolphe Belmer, said the firm was confident in OneWeb’s prospects, given its early market-mover advantage, priority spectrum rights, and evolving, scalable technology.
“With over 40 years’ expertise in the global satellite industry, we look forward to working alongside the UK Government, Bharti and the other shareholders to open new opportunities and market access to ensure OneWeb maximizes its potential,” Belmer said.
OneWeb’s stated mission is to deliver broadband connectivity worldwide to customers, bridging the “global digital divide” by offering data connectivity, facilitating linkage to the Internet of Things (IoT) future and a pathway to 5G.
Earlier this week, OneWeb successfully launched another 36 satellites into its constellation, bringing the system to 182 satellites. The company has two launches left in its ‘Five to 50’ program that will cement the company’s ability to start connectivity services to the United Kingdom, Alaska, Northern Europe, Greenland, Iceland, the Arctic Seas and Canada, with global service available next year.
According to Eutelsat, the investment will be 100 percent cash financed through Eutelsat’s liquidity position of EUR 1.9 billion (as of March 31, 2021) and the $507m US C-Band auction proceeds. It is consistent with Eutelsat’s financial hurdle rates and does not alter its financial objectives.
