OneWeb Chapter 11 Stirs Further Broadband Mega-Constellation Doubts

OneWeb's Chapter 11 filing could result in fundraising challenges for other broadband non-geostationary orbit constellation plans, NGSO experts told us. Some said Monday it could stoke doubts about the mega-constellation-delivered broadband business model. The company said it's using bankruptcy as a way to buy time until global markets rebound from the COVID-19 slowdown so it can then sell itself. From the beginning, the company "was like a big science project" lacking an established business case about how to make money bringing satellite-delivered connectivity to populations that are typically poor, said satellite consultant Hany Eldeib. As long as OneWeb founder Greg Wyler was able to sell investors like SoftBank on the idea, "everybody was kind of, 'OK, we'll go along,'" Eldeib said. Eldeib said mega constellations like SpaceX and Amazon's Kuiper could be more insulated because they have the backing of billionaires, though OneWeb's bankruptcy could make it harder to attract outside investment. He said more-limited low earth orbit connectivity constellations like Telesat serving a niche could have a better chance. OneWeb was rumored to have financing problems before COVID-19, and the pandemic "is a massive issue for the space startup community [as] venture capital has run for the hills," said Greg Autry, University of Southern California business professor. For NGSO broadband constellation business plans, it's "a perfect storm" because the virus is hammering airlines and other industries that were considered likely customers of that connectivity, he said. Kuiper and SpaceX are likely to come to fruition given respective owners Jeff Bezos' and Elon Musk's financial strength, Autry said. He said if the U.S. doesn't become an NGSO anchor tenant, Chinese companies offering a Chinese version of internet access could become the norm for developing nations. The U.S. offering unrestricted and uncensored internet connectivity globally might make "a great U.S. soft power play," he said. Satellite consultant Tim Farrar said OneWeb's bankruptcy is going to mean renewed questions about the size of the satellite broadband market. He said SpaceX could face big questions about financing since it fell short earlier this month in fundraising efforts. SpaceX didn't comment. OneWeb's petition Friday with U.S. Bankruptcy Court in Manhattan is here, (in Pacer, docket 20-22437). OneWeb had expected that over 2020, it would do monthly launches to complete its 648-satellite constellation.