
OneWeb to Consider Bankruptcy as Cash Dwindles - JumpCrisscross
https://www.bloomberg.com/news/articles/2020-03-19/softbank-s-oneweb-is-said-to-mull-bankruptcy-as-cash-dwindles
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jmcguckin
Spacex is going to crush all of it’s competitors. It get’s the launches for
the cost of a tank of kerosine and lox. It’s manufacturing its own satellites.
These are cost advantages that no one else can match.

Once Starlink is operating, the first customer to knock on their door will be
the US military. They will spend any amount to get world wide internet/ip
availability.

Softbank’s only hope to rescue their investment is to merge OneWeb with
another satellite player.

One advantage Starlink has is that the satellites have a fixed lifetime and
need to be refreshed. Future generations of satellites can have additional
capability added (ADS-B tracking for aircraft, for example)

But in the end, there can only be one.

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InTheArena
I don’t think it’s a given that SpaceX and Tesla necessarily have the cash to
ride out this crisis. Castles in the middle of two major capital projects and
two smaller ones, spaceX is in the middle of two capital intensive projects.

Their odds are much better than any other competitor right now, but they’re
still at the whims of the market.

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toomuchtodo
They’ll get a bailout if necessary. From China, most assuredly, from the US
maybe a bit less so.

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CapriciousCptl
The whole satellites-for-Internet space is like Global Crossing 2.0. I mean,
business 101 is that high fixed costs + commodity business + high likelihood
that technology that will decrease future fixed costs + no ability to
repurpose fixed assets = no profit.

Good for society. Bad for investors.

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gpm
On the flip side I would argue that low marginal costs + high fixed costs = a
natural monopoly, there is no room for a competitor to step in. A monopoly +
lots of demand = lots of profit.

It doesn't surprise me that OneWeb is going bankrupt, but that's because
SpaceX is doing it better, and there is only space for one (profitable)
company in this space.

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richk449
For most of the people in the world, Internet is already available through
land lines or cellular service. OneWeb has very little ability to extract
monopoly rents from them.

But both sides are not relevant to the article - whether the business case is
solid or not in the long run, they are running out of money in the short term.

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gpm
Properties served by land lines and cellular service just aren't potential
(highly profitable) customers for oneweb. That's ok, there are plenty of other
customers. Ships, air planes, the military, even more remote places, backbone
for remote cell towers, and so on.

It is very relevant, if the business is solid they should be able to attract
more investment in the short term.

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anon102010
Oneweb's sat's supposedly have incredible bandwidth if you beleive the CNN/CEO
hype. "Steckel said they have performed better than expected, 'demonstrating
speeds that could rival 5G internet'."

They also have made a number of claims about being the leader in the effort
etc (they launched six sat's a year ago.) Not sure I fully buy their hype.

SpaceX has launched 360 sat's and is explicit that speed may NOT be high
bandwidth (but may be low latency) which seems a more credible baseline given
the theory (one sat covers a reasonable area).

I personally would love 4mbp/s ultra low latency to my parents across the
country for video calls.

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Scoundreller
> is mulling a possible bankruptcy filing to address a cash crunch as it
> grapples with high costs and stiff competition, according to people with
> knowledge of the preparations.

Blaming competition in an industry that doesn’t exist is a bit much.

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gpm
This is a bit of a surprising day for this article to come out. In only a few
hours there is going to be the third launch of OneWeb satellites. If
successful, it will bring their total launched from 40 (34 of operational
design) to 74. As far as I can tell they need 600 in orbit to start offering
service.

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devmunchies
Why do I frequently see SoftBank in a lot of the bad news these last few
months? Do they operate differently than most venture firms?

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vsareto
They were central to WeWork's drama

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jacquesm
WeWork is going to be substantially affected by the COVID-19 pandemic too.

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erwinh
That would be too bad. Their constellation would have looked pretty cool:
[https://space-search.io/?search=OneWeb](https://space-
search.io/?search=OneWeb)

