Eutelsat Communications has entered into an agreement with OneWeb for the subscription of a c.24% equity stake, becoming a leading shareholder of the company alongside the UK Government and Bharti Global. Eutelsat will invest $550m in OneWeb, with closing expected in Q2 2021 subject to regulatory authorisations.
With much of its global network already deployed, the OneWeb constellation will operate 648 satellites in low orbit (LEO) offering low latency. This first generation of satellites will offer regional coverage by the end of 2021, reaching global coverage the following year. It will deliver 1.1 Tbps of capacity addressing the government, fixed data and mobility markets. Plans include a second-generation constellation that will provide enhancements in terms of capacity, flexibility and economics. It anticipates annual revenues of circa $1bn within three to five years following the full deployment of the constellation, with a partnership approach and profitable wholesale business model.
Eutelsat’s investment will come with similar governance rights to the UK Government and Bharti, including board representation, where its position and expertise will help to drive the success of the new constellation.
The investment will be 100% cash financed through Eutelsat’s liquidity position of $1.9bn as of end-March 2021 and the $507m US C-Band auction proceeds, and will be accounted for under the equity method.
Commenting on the agreement, Rodolphe Belmer, Eutelsat’s Chief Executive Officer said: “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. 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.”
Kwasi Kwarteng, Secretary of State for Business, Energy & Industrial Strategy, added: “Today’s investment is another giant leap forward for OneWeb in realising its ambition to provide global broadband connectivity around the globe. Eutelsat brings over forty years of experience in the global satellite industry and this exciting new partnership puts OneWeb on a strong commercial footing, and the UK at the forefront of the latest developments in low Earth orbit technology. This comes alongside yesterday’s exciting news that a further 36 satellites were launched into space and demonstrates the momentum behind OneWeb and the promising efforts to provide connectivity to some of the world’s most remote places.”
OneWeb Executive Chairman, Sunil Bharti Mittal, commented: “We are delighted to welcome Eutelsat into the OneWeb family. As an open multi-national business, we are committed to serving the global needs of Governments, Businesses and Communities across the Globe. Together we are stronger, benefiting from the entrepreneurial energy of Bharti, the extensive global outreach of the UK and long-term expertise of the satellite industry at Eutelsat. OneWeb, with its innovatory approach, is poised to take a leading position in LEO broadband connectivity”.
Neil Masterson, Chief Executive Officer of OneWeb, stated: “As OneWeb accelerates the deployment of its fleet and engages in discussions with potential customers, we welcome the powerful support of Eutelsat during the next exciting phase of our journey together, benefitting both companies equally. Eutelsat is a great partner for OneWeb thanks to our high level of complementarity in terms of technology, assets, addressable markets, geographic reach and institutional relationships”.