India’s Bharti Global is set to become the biggest shareholder in OneWeb ahead of the UK government after injecting a further $500m into the space-based internet pioneer.
It means the company will be able to complete the funding necessary to take its satellites into commercial service later this year. OneWeb aims to deploy a constellation of satellites in low Earth orbit to deliver broadband services around the globe.
News of the injection comes a year after Bharti and the UK government bid $1bn to rescue OneWeb out of bankruptcy. It brings total funding to $2.4bn and will take Bharti’s stake to almost 39 per cent, with the UK government, France’s Eutelsat and SoftBank each at slightly more than 19 per cent.
Sunil Bharti Mittal, executive chair of OneWeb and of telecoms company Bharti Airtel, said the investment would allay persistent questions over the group’s financing given that discussions with other potential investors were still ongoing.
“This money needs to be in the pipeline so management is not distracted and everybody calms down around the table. All shareholders know the money is now available,” Mittal told the Financial Times.
However, he insisted that Bharti’s injection was neither “a necessity nor an obligation . . . I am doing it before anybody else gets the chance to come in. This is not under pressure.”
The group is exercising a call option agreed at the time of the original bailout. It was possible that other existing shareholders could decide to share the investment, people close to OneWeb said.
Rivals in the industry have questioned the viability of OneWeb’s business model, given the billions that are needed to deploy a constellation in low Earth orbit and the route to profitability is still far from clear. In addition, the group is up against billionaire entrepreneurs Elon Musk and Jeff Bezos, who are both racing to deliver internet services from space.
Mittal said there was a clear commercial opportunity for OneWeb. For example, the group recently signed a deal with Britain’s BT to explore the potential for internet services to rural areas in the UK and beyond, he said.
The company had received approaches from several potential investors and was still in discussions with “three very serious people”, Mittal said. It would decide in July whether to continue talks or “shut the books”.
While the funding was not needed imminently, the aim would be to bring in a strategic investor to help develop the next generation of services.
A new investor could bring in rights to deliver services over certain territories or new technology, he said. “If we wait longer, we could have a much more valuable round than going in too early.”
OneWeb is understood to be in discussions with Middle Eastern sovereign wealth funds and Asian conglomerates.
Meanwhile, the latest round would also allow OneWeb to begin work immediately on the second generation of satellites, which would be substantially more capable than the first.
The UK government, which is under pressure to show results from its unusual decision to rescue a bankrupt company, welcomed the investment.
“Now that OneWeb has met its original funding objective, I truly believe the company is fast becoming an asset to the British taxpayer and I look forward to seeing their ambition realised to provide global broadband connectivity next year,” said Kwasi Kwarteng, business secretary.
“The government’s equity stake in OneWeb not only allows the UK to deploy low Earth orbit technology, but will put our country at the forefront of the small satellite market, which is set to rapidly expand over the years ahead.”
OneWeb will send another 36 satellites into orbit on Thursday, allowing it to begin demonstrations of commercial services to northern areas such as Alaska and parts of Canada this summer.