OneWeb: Activities, Plans, Impacts

Considering the company is dealing with Chapter 11 activities, it's a little surprising to see the amount of other activities and plans OneWeb is pursuing concurrently. And, of course, this results in it staying in the news for the past few months.

Based on all the recent news, it looks as if OneWeb will continue manufacturing its satellites. These will then launch, per a contract established before the bankruptcy (now modified), on Arianespace’s version of Russia’s Soyuz rocket. Arianespace will begin launching OneWeb’s satellites sometime in December this year--after all those pesky Chapter 11 activities finally go away. In theory (because no satellite operator ever deploys satellites on schedule--especially OneWeb), the whole initial constellation of 648 OneWeb satellites will deploy into a low Earth orbit (LEO) through 16 Arianespace launches before the end of 2022.

Earlier, during late August 2020, the Federal Communications Commission authorized OneWeb to move ahead with plans to deploy another 1,280 satellites in various orbits. In July, the United Kingdom government and India’s Bharti Enterprises offered to buy OneWeb for about $1 billion. A few months earlier, in May 2020, OneWeb submitted another application to the FCC for deploying 48,000 satellites. And the company is also manufacturing about one OneWeb satellite per week since the pandemic/bankruptcy hit it.

Why Not Start Now?

The likely reasons why OneWeb is restarting its satellite launches so late in 2020 are:

• Its satellite manufacturing rate is meager, and it doesn’t have enough satellites for the next launch yet.
• The company is waiting for final decisions about its plans for getting out of Chapter 11.

If one satellite per week rate is accurate, OneWeb will have managed to manufacture about 26-27 satellites by the end of September (since the end of March). That total is, depending on the Soyuz rocket payload configuration, about eight to ten satellites shy of what the company is supposed to be mounted on the rocket. By the time December rolls around, it should have slightly more than the 34-36 OneWeb satellites a Soyuz will carry. Since OneWeb already has 74 satellites deployed, December’s batch should push its constellation total over 100 satellites.

Before the bankruptcy/pandemic, the company was noted to have been manufacturing about two satellites per day. If OneWeb can get back to that daily manufacturing rate before the end of 2020, it should have enough satellites on hand each month to support one Soyuz launch per month during 2021 and 2022. This rate would enable OneWeb to easily achieve the initial deployment total of its satellites. And 16 launches would significantly boost Arianespace’s annual launch cadence for the next few years.

While OneWeb has published grandiose plans for 48,000 satellites orbiting the Earth, its current and pre-pandemic manufacturing rate won’t get the company to that total (even after nine years). The company’s factory would need to produce at least 444 satellites per month just to keep up--a massive increase from 1 per week.

If OneWeb continues launching ~34 satellites at a time with Arianespace, that company's established annual launch rate indicates it won’t launch all of OneWeb's satellites on time, either. Until this year's pandemic challenges, Arianespace has averaged, typically, 11 launches annually for ALL rockets in its inventory. Using the Soyuz configuration launching 11 times per year, Arianespace would only launch, in theory, 396 satellites per year for OneWeb--far from the 444 per month required.

As for the decisions...it seems a few of them require a court to agree with OneWeb’s selection of contracts (with initial investors) it would like to have rejected. One of the surprises on that list is the rejection of a possible share purchase agreement with Greg Wyler--OneWeb’s founder. Wyler has about 12% of OneWeb. It seems a step down for Wyler from his Fierce Wireless’ “Most Powerful Person in Telecom” award three years ago. But then, it appears it was awarded because of OneWeb’s mission statement, as well as the many large investors the company managed to snag--not because of an existing product.

But, even if the details aren’t agreed to initially, they are just details. At this time, I believe the bankruptcy process will be concluded before the end of the year, and OneWeb will then continue deploying its satellites. It will become a business because the UK government will continue supporting it (to keep it out of foreign (Chinese) hands)--if only for military reasons.

If You Build it, Will They Care?

However, will OneWeb’s initial deployment of 648 satellites make any sort of impact on its competitors--or gain other customers? Especially if the government provides a subsidy for UK citizens subscribing to OneWeb’s service?

With SpaceX and Starlink, the answer to that question is a “hard no.” SpaceX has already deployed more satellites than OneWeb. The company has deployed more satellites than the 648 OneWeb is planning to deploy two years from now. That SpaceX did so in slightly over a year should give any competitor pause.

SpaceX manufactures over 120 satellites per month and launches them into space in batches of 60 (+/- three or so depending on rideshare sales). Both satellites and launches cost SpaceX much less than OneWeb’s costs in those categories. Starlink is already beta-testing customers with rudimentary high-speed service--as well as testing optical inter-satellite links.

SpaceX being the first company to the LEO market, gaining a multi-year lead, could very well take most of OneWeb’s potential customers. And SpaceX, notably Elon Musk, with an established penchant of constant upgrading of products and services, engenders Apple-like loyalty in potential customers. It will be difficult for OneWeb to poach those customers if Starlink succeeds in providing fast service at inexpensive prices.

Amazon’s Project Kuiper will also not be impacted by OneWeb's current course. Naturally, it’s hard to impact a company without a product, but Amazon is known for eventually building out complex infrastructures.

The company’s underlying reasons for the Project Kuiper constellation are building a space infrastructure to provide better products and services to its customers (somehow). The use of offering broadband to customers in the boonies makes a nice business on the side but is not a primary driver for Amazon’s interest in this sector.

Of course, Project Kuiper might be stuck in project limbo, like Blue Origin. The company’s secrecy makes it difficult to know just how serious Amazon is in this endeavor. The fact that Blue Origin still hasn't launched an orbital rocket means that Project Kuiper, if it manufactures satellites quickly, won't be able to leverage low launch pricing like Starlink does of SpaceX.

Geosynchronous communications satellite operators such as Echostar/Hughes and Viasat probably have nothing to fear from OneWeb--at least in its initial incarnation. The kinds of customers OneWeb is supposed to be pursuing, particularly those in higher latitudes (above what geosynchronous satellites can serve), can’t be served by them anyway. Military organizations prize flexibility in communications, which means the U.S. military would use geosynchronous and LEO communications satellites.

There may be good opportunities for OneWeb to augment government activities, such as disaster response. Instead of moving out and setting up a comsat terminal to be pointed at a geosynchronous satellite, OneWeb’s terminals will be smaller and might be quicker to deploy. But so will Starlink's.

OneWeb, then, will provide a LEO broadband service globally. It won't be the first to the LEO broadband market. It might not be the best or the fastest provider. But it has government support and, potentially, funding from UK taxpayers. If it manages to deploy its initial 648 by 2022’s end, it will be well ahead of its forerunners from decades ago, such as Teledesic. Whether a commercial market will blossom from its labors (an “If you build it, they will come” scenario), that’s yet to be determined.