UK to enter satellite race after winning bid for OneWeb

Britain is set to go head to head with Elon Musk’s Starlink in the race to beam high-speed internet connections from space after the UK government’s joint bid with India’s Bharti Enterprises won an auction for satellite broadband operator OneWeb.

If the bid of about $350m is approved by a US judge next week, the British government is expected to take a 20 per cent stake in OneWeb, a lossmaking company that runs a low earth orbit satellite broadband network.

The UK government put no money on the table in the auction of OneWeb that took place in New York on Thursday as part of the company’s Chapter 11 bankruptcy process.

However, the British government has pledged £500m in equity as part of a recapitalisation of OneWeb that is expected to draw in other investors.

Prime minister Boris Johnson last week offered £500m to the Bharti-led consortium to keep OneWeb, a London-based company with operations on both sides of the Atlantic, in the UK.

The backing for OneWeb underlines the UK government’s readiness to invest in “high risk, high pay-off” science projects.

It also comes as the government backs away from its costly ambition to develop its own medium earth orbit satellite navigation system akin to GPS of the US or the EU’s Galileo — from which the UK was barred after Brexit. 

OneWeb went into Chapter 11 bankruptcy protection in March after failing to secure a new $2bn financing from lead shareholder SoftBank.

It has 74 satellites in orbit, and had planned to launch 550 more by the end of the year. 

OneWeb has the second largest low earth orbit satellite broadband network after Starlink, which has more than 500 in operation and plans at least 50 more this month.

In taking a stake in OneWeb, the UK government hopes to secure a substantial position in one of the most rapidly growing segments of the commercial space industry.

Consultancy McKinsey predicts that 50,000 low earth orbit satellites will be operating within 10 years.

Dominic Cummings, Mr Johnson’s chief adviser, was instrumental in pushing the case for the UK government to invest in OneWeb.

The UK is hoping to develop a new market for combined communications and navigation technology using OneWeb.

The US Department of Defense has indicated its support for a programme that would help to offset the vulnerabilities of its GPS mid earth orbit satellite navigation service.

These traditional navigation platforms are easily jammed and low earth orbit systems are seen as a way to provide resilience.