SpaceX imagines a sci-fi future. There are no shortage of competitors in this industry. Commercial rockets and satellites are the industries that burn money. The epidemic is coming. Of companies have fallen, including OneWeb, SpaceX’s once biggest competitor.
article from the public number “qubit” OF: dry out, fish, sheep.
The satellite was launched last Saturday and filed for bankruptcy this Saturday.
OneWeb, the biggest competitor of Musk’s SpaceX StarChain, was surprised to hear the news of bankruptcy.
Why did it fall at this time?
According to the Financial Times, the last straw that crushed a commercial satellite company that had raised nearly $ 3.5 billion was Gold Master’s father, SoftBank, and he couldn’t afford to pay for it in front of the new crown.
Since last year, SoftBank has been plagued by a series of bad investments. Vision Fund reports that SoftBank lost $ 8.8 billion in the third quarter of 2019.
After the outbreak of new crown pneumonia, the situation is even more serious.
Informed sources said the pandemic virus pandemic and the market turmoil caused by it caused OneWeb and SoftBank to reach 2 billion U.S. dollarsNegotiations on yuan investment broke down.
So, he dismissed his staff and filed for bankruptcy.
The 650 satellites that were promised, at the end, only 74 were sent to the sky.
Finance is the direct cause of the fall of OneWeb. But in the end, it’s still-
It is too hard to burn money, but the technology has not kept up. It is simply a “bottom hole”.
The Musk Star Chain Project is a Competitor
As the only two companies that have officially deployed low-orbit communication satellites in batches, OneWeb has always been regarded as a rival to Musk SpaceX.
OneWeb was founded in 2012 by Gregory Thane Wyler, a technology entrepreneur who has been named the “Most Influential Person in Telecommunications” in the United States.
In the original vision, OneWeb planned to operate at least 650 satellites to enable its broadband services to cover the world.
In 2015, OneWeb received US $ 500 million in financing from investors such as Qualcomm, Virgin Group, Airbus, Coca-Cola.
In 2016, Sun Zhengyi’s SoftBank Group entered the game. In this round of funding led by SoftBank, OneWeb received another $ 1.2 billion in funding, of which SoftBank invested $ 1 billion.
In 2017, OneWeb began manufacturing its first satellite.
In 2018, OneWeb completed another round of undisclosed financing with a financing amount of US $ 450 million.
In February 2019, OneWeb successfully launched 6 satellites for the first time.
In March of the same year, the company received a huge USD 1.25 billion financing led by the SoftBank, Qualcomm, Grupo Salinas and the Rwandan government, with a total financing amount of USD 3.4 billion.
The money is booming, and OneWeb is confident: It plans to launch satellites every month starting from December 2019 to quickly build satellite constellations. It hopes to achieve customer demonstrations in 2020 and global services in 2021.
As OneWeb ’s biggest gold daddy, Sun Zhengyi, president of SoftBank Group, also commented that OneWeb is a “very exciting company”.
Marcelo Claure, chief operating officer of SoftBank Group, said that OneWeb “is expected to achieve the world’s largest and first truly global communications network.”
However, compared to the stable launch of SpaceX after May 2019-sending 5 batches of satellites into orbit, each batch is about 60, OneWeb did not start launching satellites in batches until the beginning of this year.
34 satellites were launched in February 2020. Just last week (March 21), another 34 satellites were launched. So far, OneWeb’s LEO constellation network has a total of 74 satellites.
In addition, in September 2019, OneWeb was in a lawsuit: Intelsat SA filed a lawsuit against OneWeb and SoftBank in New York State, accusing the two companies of breaching contracts, fraud, and conspiracy to steal confidential and competitively sensitive information.
Intelsat has reached an agreement with OneWeb: Intelsat will use OneWeb’s low earth orbit platform to complement its geostationary orbit satellite service. Complementing the agreement, Intelsat invested $ 25 million in OneWeb in 2015.
Intelsat said that this investment gives it access to OneWeb ’s exclusive worldwide distribution rights in aviation, maritime, oil and gas businesses.
But in 2019, when Intelsat was promoting the exclusive distribution rights for OneWeb satellite capacity in four countries, it received a suspension notice from OneWeb.
OneWeb and SoftBank have stated that negotiations with Intelsat on exclusive capacity distribution rights have never reached a conclusion.
In 2017, SoftBank attempted to merge OneWeb with rival Intelsat. But in the end, because of insufficient Intelsat creditor support, the $ 14 billion merger plan ultimately failed.
After financing of $ 3.4 billion, the beginning and end of OneWeb’s bankruptcy news
OneWeb’s application for bankruptcy is not a sudden news.
Under the impact of the new crown epidemic, the global economy has fallen into a downturn, and many investment institutions have tightened their wallets.
It is undoubtedly worse for OneWeb, which has high operating costs and intends to launch satellites in large quantities, which has caused the cost to skyrocket.
On March 20, Bloomberg News quoted people familiar with the matter as saying that due to cash shortages, OneWeb is considering what to do next.
There are two ways ahead of them, one is to apply for bankruptcy protection, and the other is “to find other solutions.”
But the next day, OneWeb launched 34 communications satellites as usual, this is the third official deployment of satellites since its establishment.
It appears to have “faced” Bloomberg’s bankruptcy report, but it has been proven in real time that this is just a retrospective.
Before launching the satellite, OneWeb issued a statement. Although it did not directly respond to rumors of bankruptcy, it acknowledged that the company had a problem.
According to ArsTechnica, OneWeb said in a statement from the company that “increasingly strict travel restrictions” and “global supply chain terminals” have delayed launch plans and satellite manufacturing.
At the same time, they “made a difficult decision”: focus on core business while cutting staff. At the same time, OneWeb’s “other solutions” are more revealing-asking the major shareholder SoftBank for help.
How can Softbank, which has failed to invest consecutively and is also hit by the new crown, can throw money at this “bottom hole”?
On March 23, SoftBank announced that it will raise up to approximately 41 billion U.S. dollars in the next year by selling assets such as Alibaba and Uber shares to enrich its capital reserve and repay debt.
Before this time, there was also mediaIt is reported that SoftBank may abandon its $ 3 billion takeover bid for WeWork. According to SpaceNews, OneWeb may need $ 7.5 billion to complete the satellite system deployment.
Rich SoftBank is not without considering investing in OneWeb. According to Wired reports, SoftBank had previously decided to invest another $ 2 billion in OneWeb, but aborted under the virus and market turmoil.
Jinzhu’s father can no longer provide reliance. Only OneWeb is left with the path to apply for bankruptcy.
Wired quoted people familiar with the matter as saying that after the application for bankruptcy protection, what the remaining assets of OneWeb would look like, it is impossible to draw conclusions.
A relatively accurate speculation is that OneWeb will retain some employees to continue operating in-orbit satellites, but most of the company’s 500 employees will be fired.
However, there are only 74 satellite systems and 6 test satellites, which is far from its initial target of 648. It is obviously not enough to provide services in a global or large area.
Whether they remain on track and serve a limited area, no firm conclusions can be drawn. However, some analysts said that they should still be on track, and the possibility of expiration is relatively large.
Musk: SpaceX is working to “not go bankrupt”
I don’t know if I heard anything in advance. Shortly before Bloomberg reported that OneWeb was considering bankruptcy, Musk gave such a conclusion at the World Satellite Conference in Washington, USA:
Guess how many LEO constellation networks did not go bankrupt? zero.
This is not alarmist, but cruel reality.
Since the 1990s, companies have already begun to launch satellites to build constellation systems and provide Internet services, but eventually they went bankrupt.
Teledesic, for example, was supported by Bill Gates, but when it went bankrupt in 2002, it only launched one satellite to the sky.
The reason for its failure is straightforward. The cost of manufacturing and launching the satellite is too high. But even if they launch enough satellites and can provide services, companies that build constellation systems will still face profitability issues, such as Iridium, which is facing commercialization.
In 1997 and 1998, Iridium tried to launch a constellation system consisting of 66 satellites, and it could also serve mobile phones on Earth.
But it still hasn’t escaped bankruptcy. Not attracting enough users to support the business, Iridium filed for bankruptcy in 1999 and then restructured.
For the OneWeb that fell down, some insiders also gave an analysis.
Matt Desch, the current CEO of Iridium, said in an interview with Wired that building a large constellation system is a capital-intensive activity and returns will not come soon. Investors must be patient.
But unfortunately, OneWeb investors are impatient. By contrast, Space X is in a much better position.
The repeatable launch of the Falcon 9 and its own satellite and rocket construction plants have greatly reduced the cost and technical difficulty of building a star chain for Musk.
On March 18, two days before the news that OneWeb was considering bankruptcy came out, SpaceX also used a Falcon 9 that was reused 5 times to send a new batch of StarChain satellites to the sky.
So far, Musk’s StarChain ProgramThe sixth launch has been completed, with a total of 360 satellites in orbit. According to the plan, satellite Internet services can be provided for parts of the United States and Canada.
Later, 18 more satellites will be launched, and when the total number of satellite chains reaches 1,440, they will be able to provide services worldwide.
Despite this, the future of StarChain is still full of uncertainty.
On the one hand, more funds are needed. In February this year, Musk also expressed his intention to spin off the Star Chain business and raise funds for a separate IPO.
On the other hand, whether it can find enough customers for its Internet satellite service to sustain its business is still unknown.
On the way, there is no shortage of ambitious players, but there is also no shortage of tombstones.
In the uncertain future, even if Musk is full of ambitious and endless words, even if he has launched hundreds of satellites, Starlink can already provide services.
Iron Man can only say one thing: the goal we are trying to accomplish is “not to go bankrupt.”
Reference link:
https://www.ft.com/content/8695c459-effd-4b54-8d96-69d8e614f6b4
https://www.wired.com/story/spacex-competitor-oneweb-is-reportedly-bankrupt /
https://arstechnica.com/science/2020/03/oneweb-launches-new-satellites-amid-questions-about-its-fiscal-health/