Yup another one bites the dust and another ones gone.... Aivars Lode
Satellite venture OneWeb Global Ltd. has filed for bankruptcy after raising more than $3.4 billion from SoftBank Group Corp., Airbus SE and other investors to build a satellite network that would beam cheap internet connectivity from space.
London-based OneWeb filed for chapter 11 protection to wait out the current instability in financial markets while marketing the company for sale, according to papers filed in the U.S. Bankruptcy Court in White Plains, N.Y.
Bolstered by a group of formidable financial and technical backers from Japan to Europe and championed by satellite entrepreneur Greg Wyler, OneWeb has been touted as a leader in seeking to provide global internet connectivity via a large constellation of low-earth orbit satellites.
The company pioneered low-cost, automated production of such satellites, fueled by funding from Japan’s SoftBank and other investors, including aerospace giant Airbus, Qualcomm Technologies Inc. and the government of Rwanda.
The bankruptcy filing raises new questions about the financial viability of such broadband-via-satellite projects largely targeting developing regions. Entrepreneur Elon Musk and Jeff Bezos, founder of Amazon.com Inc. are among those pursuing the same markets.
OneWeb set up a manufacturing site near Florida’s iconic Kennedy Space Center able to turn out satellites for roughly $1 million apiece while initiating work on ground stations and inexpensive antennas designed for developing countries. Airbus executives praised the production initiatives as major advances reducing the time and expense of satellite manufacturing.
Last summer, Mr. Wyler hosted a high-profile celebration of its newly opened Florida factory featuring a delegation of senior U.S. government and industry leaders from both sides of the Atlantic. The upbeat speeches highlighted the company’s ambitious goal of providing broadband services to hundreds of millions of people without such connectivity.
Earlier this month, OneWeb successfully launched a second group of satellites. Fledgling service in Alaska was slated to start this year or early 2021, creating a potentially important testing ground for various ground stations, mobile receivers and community hot spots.
Mr. Wyler has argued that his venture enjoyed a competitive advantage over rivals, including Mr. Musk’s Space Exploration Technologies Corp., because it could rely on a functioning factory. The full constellation of more than 600 satellites was anticipated to connect to other regions in later years.
Months before the world-wide coronavirus contagion, however, OneWeb changed its business model in the face of financial and marketing challenges. Instead of primarily pursuing consumers and small businesses lacking internet connections in developing regions, Mr. Wyler and his team sketched out a strategy of initially serving cruise lines, aviation and other established markets able to pay higher service fees.
The revised marketing concept reflected higher-than-anticipated development costs and a longer deployment schedule. Industry officials have said OneWeb needed to raise another $2 billion to build out its ground network and establish partnerships with local distributors.
The impact of the coronavirus pandemic on the airline industry undermined a key pillar of OneWeb’s revised business plan in the midst of crucial fundraising talks, said telecommunications industry analyst Tim Farrar.
In court papers, OneWeb said it had reached a deal with SoftBank to use cash on hand to pay for immediate chapter 11 expenses and is “actively negotiating” a larger bankruptcy loan to keep operations funded. OneWeb cut 90% of its workforce and ceased nonessential operations before filing for bankruptcy, going to 74 from 531 full-time employees.
By Andrew Scurria and Andy Pasztor - Wall Street Journal
No comments:
Post a Comment