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OneWeb files for bankruptcy protection and seeks buyer

(Image credit: Shutterstock)

British satellite broadband startup OneWeb has filed for Chapter 11 bankruptcy protection in the US, claiming the coronavirus crisis has thwarted attempts to secure funding for a commercial launch.

The London-based firm has so far secured billions in cash from high-profile investors, with a funding round last year raising $1.25 billion from the likes of Japanese giant Softbank, Qualcomm and the Government of Rwanda. It had been hoped that a commercial service could be in operation by 2021.

So far, OneWeb has launched 74 satellites and built 44 ground stations and had hoped to launch a total of 650. However talks to secure additional backing have now stalled because of the uncertainty caused by Covid-19, causing the company to layoff employees and seek a buyer.

OneWeb sale

“Our current situation is a consequence of the economic impact of the COVID-19 crisis. We remain convinced of the social and economic value of our mission to connect everyone everywhere. Today is a difficult day for us at OneWeb,” lamented Adrian Steckel, OneWeb CEO.

“So many people have dedicated so much energy, effort, and passion to this company and our mission. Our hope is that this process will allow us to carve a path forward that leads to the completion of our mission, building on the years of effort and the billions of invested capital.

“It is with a very heavy heart that we have been forced to reduce our workforce and enter the Chapter 11 process while the Company’s remaining employees are focused on responsibly managing our nascent constellation and working with the Court and investors.”

A number of organisations believe satellite is the ideal solution to connect parts of the Earth where it is impossible or uneconomical to use traditional technologies such as fibre or cellular. OneWeb had hoped to gain first mover advantage, and says the combination of its harmonised spectrum and Low Earth Orbit (LEO) constellation design will give it technological supremacy.

One of the biggest criticisms of satellite technology is that the latency is too high – something that bringing the satellites closer to the Earth can help solve. OneWeb has so far demonstrated speeds of 400Mbps and latency below 32 milliseconds.

The company says it has received interest from government and industry, including the automotive, maritime and aviation industries. It hopes this demand, and the potential of its technology, will attract a suitor.