It’s OneWeb accusation filed for bankruptcy and decided to sell its business, bringing an abrupt end to the company’s plan to provide high-speed satellite Internet service worldwide.
A website announced Friday that he “voluntarily filed for relief under Section 11 of the (US) Code of Civil Procedure,” and that he “intends to use these procedures to pursue the sale of his business in order to increase the value of the company.” OneWeb made the decision “after failing to secure new funding from investors including its largest backer SoftBank,” mainly due to the coronavirus pandemic, the Financial Times wrote. OneWeb also “laid off most of its staff on Friday,” the FT article said.
OneWeb previously raised $3 billion over several rounds of financing and is looking for more money to fund its deployment and business launch. “Our current situation is a result of the economic impact of the COVID-19 crisis,” OneWeb CEO Adrián Steckel said in the bankruptcy announcement. “We are convinced of the social and economic value of our mission to connect everyone everywhere.”
The bankruptcy announcement comes a week after OneWeb said it expected “delays to our launch schedule and satellite production due to increased travel restrictions and disruption of global supply chains.”
OneWeb was founded by Greg Wyler in 2012 and was originally known as WorldVu. OneWeb “said it laid off about 85 percent of its 531 employees before filing for bankruptcy,” SpaceNews wrote Friday. OneWeb’s bankruptcy filing shows it has “$2.1 billion in total liabilities, including $1.7 billion in financing secured by between 1,000 and 5,000 creditors,” SpaceNews wrote.
OneWeb is a UK-based company and has its US headquarters in McLean, Virginia. OneWeb also operates a satellite-technology factory in Florida joint venture with Airbus. After SoftBank, OneWeb’s top shareholders are Qualcomm, Wyler’s 1110 Ventures LLC, and Airbus.
OneWeb has a “global perspective”
OneWeb has already launched 74 satellites and demonstrated broadband speeds of over 400Mbps with latency of 32ms. The company is a key competitor to SpaceX’s Starlink division, which has launched 362 satellites and plans to launch thousands more. The satellites of OneWeb and SpaceX operate in low Earth orbits, allowing them to provide much lower latency than traditional geostationary satellites.
OneWeb is one place ahead of SpaceX in the satellite race, having secured Federal Communications Commission approval in June 2017, before SpaceX did. OneWeb plans to serve the United States and global markets from “720 low-Earth orbit satellites using the Ka (20/30GHz) and Ku (11/14GHz) frequency bands,” the FCC noted at the time.
OneWeb’s bankruptcy filing notes that it has rights to “valuable worldviews,” which could entice a buyer. OneWeb said that it has also “started development on several user terminals for several consumer products, (and) has half of the 44 land stations completed or in development.” The current deployment of 74 satellites is “too small to provide telecommunications services or generate revenues,” the Financial Times wrote.
Potential buyers could include Amazon or Facebook, both of which are planning fleets of low-orbit mobile satellites. (Amazon founder and CEO Jeff Bezos in February sold $4 billion in the Amazon market, giving him a lot of cash in hand.) Space Norway and Telesat also have low-Earth satellite systems.
OneWeb says it has “seen significant early demand globally… from governments and leaders in the automotive, marine, commercial, and aerospace industries.” But the willingness of investors to fund the company slipped amid the pandemic, OneWeb explained:
Since the beginning of the year, OneWeb has been in advanced negotiations regarding an investment that will fully finance the company through the activation and launch of the business. While the company is close to receiving funding, the process has not progressed due to financial impact and market turmoil related to the spread of COVID-19.
SpaceX CEO and founder Elon Musk recently discussed the challenges of starting a low-Earth-orbit satellite business, saying his goal is to have Starlink end up “in the non-bankrupt category.”