Satellite operator Eutelsat has agreed a deal to buy a 24% stake in OneWeb for $550 million in cash, with the aim of complementing the capabilities of its existing geostationary (GEO) satellite network with the low earth orbit (LEO) constellation being constructed by OneWeb.
Eutelsat will join the UK government and Bharti Global as the main shareholders in the company once the transaction closes, which is expected to happen in H2 2021 subject to regulatory approvals.
The completed OneWeb first generation constellation will operate 648 LEO satellites, with regional coverage expected by the end of 2021 and global coverage to be introduced the following year. The company says it will be able to deliver 1.1 Tbps of capacity from the network and anticipates annual revenues of about $1 billion within three to five years following the full deployment of the constellation, using a partnership approach and wholesale business model.
Eutelsat’s investment now means that OneWeb is close to being fully funded for its current development roadmap, with the company claiming that it is “well advanced” in terms of securing its remaining funding needs this year. Eutelsat’s investment will come with similar governance rights to the UK government and Bharti, including board representation.
“We are excited to become a shareholder and partner in OneWeb in the run up to its commercial launch and to participate in the substantial opportunity represented by the non-geostationary segment within our industry,” said Rodolphe Belmer, Eutelsat’s Chief Executive Officer.
“We are confident in OneWeb’s right to win thanks to its earliness to market, priority spectrum rights and evolving, scalable technology. We look forward to working alongside the UK government, Bharti and the other shareholders to open new opportunities and market access to ensure OneWeb maximises its potential.”
“OneWeb will become our main growth engine outside our broadcast and broadband applications, as we continue to maximise cash-flow extraction from our highly profitable heritage business and grow our fixed broadband vertical leveraging our geostationary assets.”
OneWeb completed its most recent launch of 36 satellites just this week, bringing its in-orbit total to 182.