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Airtel Parent Bids for SpaceX Starlink's Competitor OneWeb: What Does it Mean for the Future of Internet and Communication

Jul 11, 2020 1:03 PM 4 min read
Editorial

Founded by US entrepreneur Greg Wyle in 2012, OneWeb, then known as WorldVu was incorporated with the vision of  providing “internet everywhere for everyone” via low Earth orbit satellites. 

But why are we suddenly talking about it? 

Well because Bharti Enterprises (the parent of Airtel), along with the British government last week said that it would invest  c. $1bn in OneWeb, which filed for bankruptcy after its biggest backer, SoftBank Group, declined to provide fresh funding.

 

Chasing Dreams

OneWeb aims to build the first global communications network to be powered by a constellation of low-Earth-orbit satellites - providing connectivity to people and businesses everywhere around the world. 

With Britain looking to add positioning technology to new satellites to complement and add resilience to the American GPS system, after the country exited the EU’s Galileo network as a result of Brexit, the investment in OneWeb seems to have come at an opportune time.

 

Get...Set...Go?

OneWeb has secured radio spectrum and regulatory approvals needed to operate its satellites and ground infrastructure and offer services around the world, documents filed with a bankruptcy court in New York show.

It aims to put 900 satellites in Earth’s lower orbit, to provide affordable internet worldwide. Currently with only  74 satellites in orbit, the target is rather humongous. 

And satellites, which have a lifespan of about five years - assembled in a highly automated factory run in collaboration with Airbus - cost around $1m each. The challenge is also enormous, given that satellites have never been mass produced before.

 

Source: Airbus

 

Rocket launches, carrying 34 satellites into orbit each time, run around $70m apiece.

Considering the above, additional investment, potentially running to more than $1bn - in addition to the $1bn British/Bharti commitment - would be needed to complete a constellation that can offer continuous service worldwide, as per sources. 

Getting future commercialisation right and attracting potential customers will be absolutely key for the venture to ultimately take off. 

An upside here is that OneWeb has seen an increasingly significant interest in their high-speed low-latency connectivity services from governments, aviation industries, automotive and the maritime industries. 

With OneWeb envisaging to provide coverage at the poles, military and oil and gas industry can also be seen as potential customers. 

OneWeb’s neutral network will be open to integration with third-party Internet service providers, ensuring cheap and efficient last-time connectivity at a time when the world awaits the roll out of 5G. 

 

Not the First Though

Providing universal wireless or internet service via satellites has been a dream of numerous tech tycoons and companies over the years. 

Recall Motorola’s Iridium?

Iridium, the global satellite phone company backed by Motorola had filed for bankruptcy in 1999, after the company had spent $5bn to build and launch its infrastructure of satellites to provide worldwide wireless phone service. To work properly, the system needed 66 satellites. The creation of this enormous system forced the company to default on $1.5bn of debt. 

It is perhaps one of the largest bankruptcies in US history.  

Then there was the  Craig McCaw, Bill Gates and Saudi Prince Alwaleed bin Talal-backed Teledesic, which attempted to put up 840 satellites, a number that was reduced to 288 in 1997. The company folded because of escalating financial and technical risks. 

But a lot has changed since then. SpaceX is building a rival constellation, Starlink, while Amazon founder Jeff Bezos is developing a space internet business - Project Kuiper.

*Fingers-crossed.* 

 

What’s in it for Mittal?

“OneWeb’s platform will help to reduce the ‘digital divide’ by providing high speed, low latency broadband access to the poor and hard-to-reach rural areas," said Sunil Mittal. As one of the largest Indian telecommunications operators, I know what a powerful social and economic enabler this can be, he added. 

Where have we heard that narrative before?  

Reliance Jio, of course!

What started off as an affordable plan targeting the lowest and the remotest strata of the Indian society, has now branched out far and wide - from e-commerce to even mulling a digital currency. 

The recents investments it has raked up to the tune of ₹1.04Lcr ($13.9bn) is a testament to the roaring success of Jio and its “humble” beginnings. 

OneWeb might prove to be the game changer for Airtel, which to be honest has been riling under the AGR dues. 

And if everything is to go as planned, OneWeb could chart a whole new trajectory in the world of communications, perhaps even pushing Britain to the forefront. Recall how the US and a few other countries dominated information technology through underwater internet cables around the world? Or the more recent backlash against China and Huawei? Who knows...maybe an Internet infrastructure built in space may just be the next big thing. 

FIN.

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