OneWeb has entered into an agreement with Elon Musk’s SpaceX to enable the UK-backed satellite internet company to resume launches after a stand-off with Russia.
The first launch with SpaceX is expected this year and will add to OneWeb’s 428 satellites, two thirds of its total planned constellation of low-orbit satellites to provide high-speed broadband globally.
The agreement with SpaceX, the financial terms of which were not disclosed, marks a swift response from OneWeb after the strategy of the loss-making startup was thrown into significant uncertainty this month.
Concerns arose after it became embroiled in a dispute with Roscosmos, Russia’s state space agency, triggered by President Putin’s invasion of Ukraine and western sanctions.
The decision brings rivals in space closer together as SpaceX’s Starlink is in a race with OneWeb.
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At the beginning of this month OneWeb’s board unanimously voted to suspend all launches from Russia’s Baikonur cosmodrome in Kazakhstan, where the majority of OneWeb’s satellites have been launched, and where its six remaining launches this year were due to take off.
The decision was taken days before Arianespace, OneWeb’s existing European launch partner, was due to launch 36 satellites from Baikonur on a Russian Soyuz rocket for its fourteenth launch.
The suspension was made after Roscosmos demanded that the British government withdraw its 17.5 per cent shareholding in OneWeb and provide a guarantee that the satellites would not be used for military purposes.
OneWeb’s launches were designed to be compatible with Soyuz rockets under contracts signed and paid for before sanctions were imposed.
Space industry experts had considered a partnership with SpaceX as the best possible alternative for OneWeb and the company was known to be in discussions with potential partners in the United States. There were concerns, however, that it could take months to strike an agreement, increasing its costs.
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There is optimism that OneWeb could still complete its initial constellation this year as planned before the breakdown in Russo-western space relations because of the payload potential of SpaceX’s Falcon 9 rocket.
Neil Masterson, chief executive of OneWeb, yesterday thanked SpaceX for its support, which “reflects our shared vision for the boundless potential of space”.
OneWeb was rescued by the government two years ago at a cost of £400 million alongside Bharti Global, the Indian group, in a deal championed by Dominic Cummings, Boris Johnson’s former adviser.
OneWeb has offices in London and Virginia and employs about 480 people: two thirds in Britain at the old BBC site in White City, west London.
The suspension of the remaining six launches is expected to cost in the region of $300 million. Sources, however, have pointed to OneWeb’s deep-pocketed and influential backers. It raised $300 million last August from Hanwha, the South Korean technology and manufacturing company, bringing its total equity raised since November 2020 to $2.7 billion.
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Chris Quilty, founder and a partner at Quilty Analytics, a US-based boutique investment bank in the satellite and space industry, said it was “a good business decision for SpaceX from a revenue and PR perspective, with the full knowledge that OneWeb will get to orbit one way or another”.
