Daily Management Review

£400m Stake In Satellite Firm OneWeb Taken Up By UK Government


£400m Stake In Satellite Firm OneWeb Taken Up By UK Government
An investment of $500m (£400m) is to be made by the United Kingdom in the failed satellite firm OneWeb so that it would be possible to replace the need for use of European Union’s Galileo sat-nav system.
OneWeb was working on an expensive project to build a spacecraft network to deliver broadband which ostensibly resulted in bankruptcy.
UK’s partner in this venture is India's Bharti Global as both had placed a bid for the investment and won it.  
This investment would help deliver the "first UK sovereign space capability", said Business Secretary Alok Sharma.
"This deal underlines the scale of Britain's ambitions on the global stage. Our access to a global fleet of satellites has the potential to connect millions of people worldwide to broadband, many for the first time, and the deal presents the opportunity to further develop our strong advanced manufacturing base right here in the UK," Sharma said in a statement.
The highest bidder in an auction for the bankrupt company was a consortium that included the UK government.
Matters will be clarified on 10 July, when the US Bankruptcy Court for the Southern District of New York rules on the sale.
The UK government will own an equity stake of 45% in the new operation if the Bharti Global-led option goes through.
According to the UK government, one of the ways to meet its target of rolling out of super-fast broadband are satellites and he UYK believes that a precise Positioning, Navigation and Timing service, also known as sat-nav could be delivered by OneWeb's constellation.
Since losing membership of Europe's Galileo satellite-navigation system because of its departure from the EU in January, being having access to sat-nav had become a political imperative for the UK government.
Only the member states of the EU are allowed access to Galileo's more secure signals, known as PRS, intended for military and government agency use, even though the system’s free and open signals remain accessible to the UK. The UK government wants a home-grown system as a replacement for the EU system.
The decision of the UK government to get involved in the company has surprised a number of people in the wider space sector even though this move by the government was exceptionally good news for the staff of OneWeb.
The financial viability of the broadband mega-constellation projects has been questioned by some of the more established actors in the field. This is because an even bigger network is being built by SpaceX while its own version is being rolled out by Amazon.
Moreover, these operations are extremely expensive as they involve multiple rocket launches - and it's an ongoing commitment. It is necessary to refresh satellites in such systems, as well as to replace ageing and failed units. Entities engaged in this business also has to take advantage of new technological developments.
Critics argue that all of these therefore makes OneWeb a major gamble for UK taxpayers.