UK wins bidding war for satellite firm OneWeb

Matthew Field
A Soyuz-2 rocket takes-off with OneWeb satellites from the Baikonur Cosmodrome in Kazakhstan - Roscosmos Space Agency Press Service /Roscosmos Space Agency Press Service

Britain has entered an international space race to develop next-generation satellite technology after winning the battle for collapsed operator OneWeb with a last-minute $500m (£400m) bid.

The successful offer for 45pc of the company means the UK will go head-to-head with Brussels and billionaire tycoon Elon Musk in the scramble to design an alternative to the aging GPS navigation system.

OneWeb's planned network of at least 650 satellites orbiting 750 miles above the earth could also unlock ultra-high speed broadband connections for 60,000 homes in isolated rural areas, as well as turbocharging the country's efforts to roll out 5G mobile internet.

Britain's investment is believed to be one of the largest Government stakes taken in a private business for many years, and came after an intervention last week by Number 10.

It is likely to be seen as a signal that Downing Street is prepared to pursue a much more interventionist strategy than under previous Prime Ministers.

The UK made a joint offer with India’s Bharti Enterprises for OneWeb, which went bankrupt in March after investors pulled out of the company during the coronavirus pandemic. Bharti will invest another $500m.

OneWeb had launched 74 satellites before it was forced to file for bankruptcy in March.

The Satellite Applications Catapult - a group of businesses which lobbied ministers to make the offer - estimates that OneWeb’s technology could connect 60,000 homes which have been unable to access reliable broadband connections.

Its low-earth-orbit satellites are able to provide high-speed internet because they are much closer to the planet than regular ones, which stay 22,000 miles above earth.

Business Secretary Alok Sharma said: “This deal underlines the scale of Britain’s ambitions on the global stage.

“Our access to a global fleet of satellites has the potential to connect millions of people worldwide to broadband, many for the first time, and the deal presents the opportunity to further develop our strong advanced manufacturing base right here in the UK.”

The takeover must be signed off by US authorities, with a final decision expected on July 10. 

The Department of Justice warned last week that any foreign purchase of OneWeb is likely to be investigated and could be blocked by President Donald Trump due to national security concerns.

The offer was entered at the last moment after being signed off by Prime Minister Boris Johnson and backed by Chancellor Rishi Sunak and aide Dominic Cummings, who has long championed the need to embrace new technology.

Britain beat off rivals including Canadian firm Telesat as well as Chinese interest.

It was last month reported that Amazon was in talks about buying 5pc of Bharti's telecoms business for $2bn - potentially meaning the Treasury could end up owning a joint venture with the US tech titan.

The Government is currently seeking to raise further funding for OneWeb, and has met with United Arab Emirates sovereign wealth fund Mubadala and Japanese investor SoftBank.

A deal with Mubadala may attract attention over the country’s human rights record. Abu Dhabi has been criticised for stifling freedom of speech, labour abuses suffered by migrant workers and the torture of prisoners.

Supporters hope that OneWeb’s satellites could be used to create a rival version of GPS that serves as a back-up system to the US technology.

The UK is no longer part of the European Union’s Galileo scheme following Brexit, and is understood to be keen to develop its own alternative. Mr Musk is also working on a broadband satellite constellation called Starlink.

Officials at the UK Space Agency have warned the Government that low-earth-orbit satellites similar to OneWeb’s could fail to work as a GPS rival due to concerns about accuracy and potential vulnerability to jamming technology.

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