
OneWeb files for bankruptcy - z3t4
https://www.oneweb.world/media-center/oneweb-files-for-chapter-11-restructuring-to-execute-sale-process
======
shantara
I don't think it's exactly fair of them to blame "financial impact and market
turbulence related to the spread of COVID-19" for their bankruptcy. The
history of space industry is full of companies that ran out of money when
attempting to launch massive satellite constellations.

And let's be frank, an attempt to out-compete SpaceX on mass satellite
production and cheap launches was doomed to fail.

~~~
fludlight
Almost all bankruptcies in the next two years are going to blame COVID-19. "It
wasn't us, it was the $external_factor" is a way for management to avoid
blame. In some cases (restaurants especially) the health crisis has wrecked
businesses that have been profitable for many years and the external factor is
legitimately the main cause. In other instances, the company was already
headed toward bankruptcy and the virus is just the straw that broke the
camel's back.

~~~
Amygaz
This is highly opinionated, since I don't know Greg Wyler at all, but I do
remember his Terracom broadband satellite effort in Rwanda, which looked noble
at first, but was more a pretext to pay himself a generous salary, than doing
anything.

So when he started OneWeb and then Ob3 (or vice-versa) I was skeptical. Now,
reading about OW, and how it was mostly a middleman, I would say I am not
surprised at all that he would pull this one and blame a virus. With chapter
11 he gets to protect his equity and compensation

I expect him to rebound, with even better compensation.

~~~
nujabe
I've know and seen Wyler's work in Rwanda first hand and seen the impact it
has had on my villages and schools around the country, having lived there for
a time in the mid 2000s. I have no knowledge of the financials of Terracom or
the success of it's business model but I'm curious to know more about what
exactly made you say that this was all a pretext to enrich himself?

------
cs702
I've met some of the senior executives at OneWeb, and think highly of them.

My understanding is that from day one they were under pressure from Softbank
and other backers to spend the initial capital aggressively -- to secure
spectrum as quickly as possible, build out ground stations as quickly as
possible, build out global operations as quickly as possible, and start
launching satellites as quickly as possible -- with the implicit assumption
that there would be additional capital available to get the company to launch.

The team, to its credit, accomplished pretty much everything they set out to
do on an accelerated schedule, but then, when they needed additional capital
to finish the build-out and launch... the additional capital they had been
counting on failed to materialize on reasonable terms.

Many people working at OneWeb surely feel shortchanged.

~~~
JumpCrisscross
> _My understanding is that from day one they were under pressure from
> Softbank and other backers to spend the initial capital aggressively_

Totally agree. This isn’t a Covid-19 story. It’s another SoftBank story.

The SoftBank-fuelled impatience led to strategic blunders including premature
spectrum accumulation, vendor lock-in with Airbus, launch services lock-in
with legacy providers and over hiring.

------
erwinh
So this will be the final OneWeb constellation: [https://space-
search.io/?search=OneWeb](https://space-search.io/?search=OneWeb)

(shamelessly plugging my own website here)

Such a shame about OneWeb though, met some of them at a conference in Spain
just a month ago, where the elephant in the room was StarLink already.

~~~
rossmohax
How do they deploy evenly spaced sattelites on the same orbit?

~~~
erwinh
You can launch them all at once on a sort of dispenser system. Then after they
are separated they are on the exact same orbit. By increasing or decreasing
that orbit height by just a tiny bit they will speed up or down and start to
disperse. Over multiple days/weeks they will start to disperse across that
orbit. Once they are all spaced to the position where they want them they move
up/down again to the exact orbit to maintain position. Maybe later in the year
I'll make an animation about it, because initially it is a bit counter
intuitive but once you get it it makes a lot of sense :)

------
chtitux
Ariane 6 first flight was planned to bring OneWeb satellites in space.

If they can't launch them, I wonder what will be the payload of the first
Ariane 6.

~~~
nickik
To be honest I really can't see what exactly the Ariane 6 does better then
Falcon 9/Falcon Heavy. I can not see how it has any chance in a commercial
market, they will have to get government launches, but there are not enough.

Ariane 6 was a response to Falcon 9 first generation, and they designed it to
compete with a Falcon 9 from 4 years ago, Falcon 9 is a different beast now.

Even launching 2 huge satellites is not gone work because there are fewer of
those launches, and Falcon Heavy is getting a bigger fairing that could do
that too.

~~~
bryanlarsen
Ariane 6 only makes sense if you view launch capability as a matter of
national security.

~~~
nickik
Given that most nations in Europe are happy to launch on US rockets (as the
Germans did), that really basically means the national security of France.

Seems to me its more of a jobs program that claims 'national security' as a
reason.

~~~
fragmede
A "jobs program" that would have kept (more) manufacturing capacity of
surgical masks in-country seems like it would have been a very good thing
right now.

------
InTheArena
This is also a hammer blow to Soyuz and the European launchers. Payloads are
becoming very scarce.

~~~
greglindahl
I wonder what the Soyuz folks are going to do with 18 half-paid-for,
partially-built rockets?

------
MegaDeKay
More information at this link from the Financial Times. There are only a few
dozen people left working their now.

[https://amp-ft-com.cdn.ampproject.org/c/s/amp.ft.com/content...](https://amp-
ft-
com.cdn.ampproject.org/c/s/amp.ft.com/content/8695c459-effd-4b54-8d96-69d8e614f6b4)

~~~
JensRex
That link is an abomination while also being paywalled. The proper link is
this:

[https://www.ft.com/content/8695c459-effd-4b54-8d96-69d8e614f...](https://www.ft.com/content/8695c459-effd-4b54-8d96-69d8e614f6b4)

...but also paywalled. This one is not:

[https://archive.ph/OynEo](https://archive.ph/OynEo)

------
tiernano
Wonder if space x would buy them... wonder how much of a difference between
their current satellites and one webs there is...

~~~
londons_explore
Oneweb's satellites are 'bent pipes', which means they don't decode/route the
data. They act like a mirror just reflecting signals back.

That used to be a great design when satellites were expected to last 30 years,
and the 'bent pipe' design meant data compression, encoding, error correction
and modulation could be upgraded without changing the satellite hardware.

In today's world where satellites are lower, cheaper and only last ~5 years,
it makes more sense for the satellite to be able to decode and route data,
which gives it a significant capacity boost for the same power and spectrum
usage (since you aren't amplifying and forwarding noise). Phased arrays with
hundreds or thousands of beams also don't work well with the bent pipe
architecture, since cross-talk between streams is hard to reduce.

~~~
blackhaz
I wonder what happens with the satellites. Are they just expected to decay?

~~~
erwinh
The FT article I think claims that after the bankruptcy there will remain a
small team to maintain them for now. Don't know if the plan is to de-orbit
them, maybe there are still some stakeholders interested in running some
experiments on them...

~~~
bryanlarsen
It's Chapter 11 which means that they hope to maintain OneWeb as a viable
business.

Only if they convert to Chapter 7 would it mean they've given up on the
business completely.

------
Ice_cream_suit
Another SoftBank fiasco.

------
sm4rk0
TL;DR

"Since the beginning of the year, OneWeb had been engaged in advanced
negotiations regarding investment that would fully fund the Company through
its deployment and commercial launch. While the Company was close to obtaining
financing, the process did not progress because of the financial impact and
market turbulence related to the spread of COVID-19."

------
ThinkBeat
So who will buy their assets for pennies on the dollar and keep going?

~~~
greglindahl
The asset isn't a working constellation, it's one which is allegedly halfway
there. History says that the constellations that successfully emerged from
bankruptcy were the ones that had proof that they worked.

------
redis_mlc
You would have thought that Iridium would have been a cautionary tale. The
first company went bk in 1999, losing $6 billion, and it could only make money
when the buyer bought it for $35 million and didn't have to pay for the
capital assets.

[https://en.wikipedia.org/wiki/Iridium_Communications](https://en.wikipedia.org/wiki/Iridium_Communications)

~~~
jessriedel
Except Iridium recently launched an entire new generation of satellites to
replace their old one, and it is expected to be profitable. Likewise, lots of
people expect SpaceX to make a killing on Starlink.

There were good reasons to be skeptical of OneWeb, but "consumer satellite
communication companies have gone bankrupt before" is not one of them.

~~~
RivieraKid
> lots of people expect SpaceX to make a killing on Starlink

What lots of people expect is kind of irrelevant... OneWeb going bankrupt
suggests that profit margins will be low at best, negative at worst. Cheaper
launch cost is not enough to change the business from to non-viable to hugely
profitable.

Who will be the customers of Starlink? Internet is a commodity for the average
person, you can't make money in that market. This leaves special cases such as
abandoned areas, airlines, ships, but that market is much smaller and it's
unclear whether it can feed the massive capital costs of Starlink: launches,
satellites, ground stations.

Edit: Providing service to ships in the ocean could be a problem, because of
the lack of ground stations.

~~~
irjustin
> Internet is a commodity for the average person, you can't make money in that
> market.

This assumes that razor thin margins are bad, which is usually a safe
assumption but in the case of Starlink, I say it's not open minded enough.

To boot Starlink online requires a minimum cost for service area (sats), but
once you've got that area booted, onboarding new customers is trivial (vs
laying fiber, cable, digging holes).

The user terminal is for each individual - "Looks like a thin, flat, round UFO
on a stick."[0]

If you were offered $40 per Gb/s would you switch, 30? 20?

Personally I would switch because it's simply not f'ing Comcast.

[0] [https://www.businessinsider.sg/spacex-starlink-user-
terminal...](https://www.businessinsider.sg/spacex-starlink-user-terminal-
flat-round-ufo-stick-elon-musk-2020-1?r=US&IR=T)

~~~
martinald
Doesn't work like that. Each starlink satellite has capacity of 20gig/sec.
Assume that only 1 or 2 of the sats will be over a major metro area at any one
time - that's 40gig/sec total capacity. That's only ~5,000 HD netflix streams
at once (even less for 4K).

It will soon become totally overloaded. A city like NYC probably has
home/office bandwidth use of 40gig/sec per a few city blocks, nevermind the
whole metro area.

It's not going to work as a home internet replacement if you already have
fibre or cable service. Furthermore, fibre and cable can be upgraded easily by
putting new equipment on each side (even cable internet has went from
40mbit/sec to 10gig/sec - fibre has even more capacity).

Elon himself has admitted that it won't work in cities for this reason.

~~~
milankragujevic
Yes, but cities have FTTH, rural areas have.. often times nothing that
approaches >5 Mbps.

~~~
martinald
Yes, of course. But how big of a market is that really? I imagine the market
is actually pretty small, considering a lot of rural areas have semi-workable
4G coverage, and others have small wireless p2p ISPs.

My point wasn't that it doesn't make sense whatsoever, it's just that it is
going to be a niche solution. Considering the insane capex of getting the sats
in space, if the market is too niche, will it be able to pay back the capex
costs?

~~~
milankragujevic
> But how big of a market is that really?

You can't know until you do extensive market research.

>a lot of rural areas have semi-workable 4G coverage

Yes, but also extremely restrictive data caps and expensive overage fees per
kilobyte.

>small wireless p2p ISPs

Yes, that would be the biggest competition to LEO satellite broadband.
However, PTMP (point to multipoint) WISP requires line of sight and expensive
CPEs to reach speeds over 20 Mbps for more than 1-2 km (0.6-1.2 miles). There
is still shared capacity, and RF noise problems (as with satellites).

>it is going to be a niche solution

Unfortunately, yes. And if it ever gets anywhere near to being profitable and
threatening the traditional fixed access telcos, they'll just spend some
pennies (compared to revenue), lay fiber to most of the residences, and do a
mix of FTTH and FTTC (VDSL2 with profile 35b for up to 50 Mbps at 1km (0.6
miles) or 350 Mbps at 100 m (0.06 miles)) to save costs for users who have
good-enough-quality twisted pair telephone lines but are too far from the
DSLAM to get good speeds.

VDSL2 is quite servicable, it is unclear to me why is it so underutilized in
the USA. DSL is a dedicated service, since the telephone line isn't shared
with multiple people nor multiplexed in any way, so it provides a very stable
connection, if the speed is conservatively set per the line's maximum length.

------
drmpeg
Spacex could be in trouble too.

[http://tmfassociates.com/blog/2020/03/21/why-spacex-
desperat...](http://tmfassociates.com/blog/2020/03/21/why-spacex-desperately-
needs-a-government-bailout/)

~~~
mrfusion
Don’t spread rumors. This was thoroughly debunked on r/Spacex.

[https://pay.reddit.com/r/spacex/comments/fmp7sv/why_spacex_d...](https://pay.reddit.com/r/spacex/comments/fmp7sv/why_spacex_desperately_needs_a_government_bailout/)

~~~
bryanlarsen
Yes, that's far from a credible source. However SpaceX's latest round
([https://www.cnbc.com/2020/03/09/spacex-
raising-500-million-i...](https://www.cnbc.com/2020/03/09/spacex-
raising-500-million-in-new-funding-for-elon-musks-company.html)) has not yet
closed and undoubtedly due to the situation some of the investors in that
round are getting itchy feet.

I have no doubt that SpaceX can raise (I'd invest), but that $36B valuation
might be in trouble.

------
JackPoach
I think this is bad news for SpaceX as well. Investors are going to be very
reluctant to give more money to Musk.

~~~
squarefoot
These days most investors would probably look only at developments in the
medical field; Covid19 is affecting just about every business everywhere.

~~~
Veen
Telecoms businesses are doing quite well too.

------
synctext
Key bits; almost ready; then Corona came: "To date, the Company has
successfully launched 74 satellites as part of its constellation, secured
valuable global spectrum, begun development on a range of user terminals for a
variety of customer markets, has half of its 44 ground stations completed or
in development, and performed successful demonstrations of its system with
broadband speeds in excess of 400 Mbps and latency of 32 ms."

~~~
londons_explore
74 out of 648 required for full service...

They're 10% complete... And they are launching on Soyuz, which isn't exactly
cheap when they need to do another 16 launches...

~~~
redis_mlc
> they are launching on Soyuz, which isn't exactly cheap

Exactly. Musk started making rockets when Russia wouldn't sell them on
reasonable terms. The closer OneWeb got to finishing their constellation, the
higher the bids would've been.

~~~
greglindahl
OneWeb bought 21 Soyuz launches at once, which is enough for the initial
constellation.

~~~
redis_mlc
That was smart, wonder if they can get a refund. :)

~~~
greglindahl
When you buy a rocket launch, usually there are progress payments as the
rocket is built. And if you stop paying, you forfeit the payment. So likely
there's nothing to be refunded... and the rocket maker is stuck with 18
partially-assembled rockets. Which is an entire year of launches for Soyuz.

