The high-profile London-based satellite start-up – OneWeb, blamed the coronavirus pandemic while it was forced to file for bankruptcy protection in the United States. The company was engaged in the development of a network to deliver broadband across the globe.
The startup said that the pandemic crisis did not allow it to secure new investments.
The company is currently seeking a buyer for itself and is in the process of laying off most of its staff, the company said in a statement.
The company had planned to launch a total of at least 648 satellites and had already managed to launch a total of 74th satellite as a part of its planned constellation. The business idea of the company was based on the concept of using this network of satellites to provide high-bandwidth, low-latency internet connections to anywhere in the world – except Antarctica.
Over the past week, there were rumors of the collapse of the company. The company had managed to raise funds of £2.6bn to implement its project. However experts in the area of space industry had predicted that the company would need double that amount to be able to successfully complete the launching of the network system and making it operational.
The company was quite close to securing financing for its project but that, “the process did not progress because of the financial impact and market turbulence related to the spread of Covid-19”, said the statement released by OneWeb in the early hours of Saturday.
“Today is a difficult day for us at OneWeb. 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,” the company’s CEO Adrian Steckel added.
The detailed presentation of the plans of OneWeb was made to the media by in 2015 at London’s Royal Institution. Airbus, Intelsat, Bharti Enterprises, Coca Cola, Group Salinas, Hughes Network Systems, and Virgin Group were among the early backers of the company. Later on Japanese investment firm Softbank made major investments in the company to become its major investor.
However analysts said that the costs of building satellite constellations is very high and the history of the sector has many examples of companies that have been forced to seek Chapter 11 protection with the US Bankruptcy Court.
While some companies have managed to pull through such as Iridium which launched the first satellite phone network, many did not. Recently, the company put up a second-generation constellation in low orbit around the earth.
The efforts of OneWeb are to replicate that. The company owns valuable radio spectrum rights, in addition to having successfully launched 74 satellites. The company has also built getting on for half of the 44 ground stations needed to operate its constellation. The company now hopes that a prospective customer would find these lucrative and appealing.
(Adapted from BBC.com)