OneWeb reportedly heads into bankruptcy and SpaceX might be next
OneWeb – one of several companies hoping to sell Internet connections from space – could file for Chapter 11 bankruptcy as soon as Friday, according to a report in the Financial Times.
The report follows a similar one from Bloomberg on March 19 warning that OneWeb executives were contemplating bankruptcy. OneWeb itself confirmed last week it had conducted layoffs that, TechCrunch reported, were as high as 10% of its workforce.
Citing unnamed sources, the FT reported Friday that OneWeb – which has so far raised a whopping $3.4 billion from investors including SoftBank, Virgin Group, Qualcomm and Bharti Enterprises – had attempted to secure as much as $2 billion more from struggling SoftBank, but the financial upheaval caused by the spread of the new coronavirus recently brought an end to those talks. The publication reported that most of OneWeb’s 500 employees will likely be out of a job by next week, and that satellite production in the company’s manufacturing facility in Florida will cease as a result.
OneWeb has so far put roughly 70 low-Earth orbit (LEO) satellites into space, well below its initial goal of around 600 for commercial service in the latter part of 2020. The company declined to comment on the FT’s report.
Eyes turn to Musk
What’s more noteworthy is the shadow OneWeb’s struggles cast over SpaceX’s Starlink efforts. SpaceX – backed by billionaire entrepreneur Elon Musk – is working to get its own Starlink-branded constellation of LEO satellites into space via its Starship space-transportation business.
But, according to analyst Tim Farrar with TMF Associates, SpaceX has been working this year to drum up extra money for its orbital ambitions. For example, Farrar pointed to a Wall Street Journal report indicating that SpaceX is lobbying FCC officials to make Starlink eligible for the agency’s $20.4 billion Rural Digital Opportunity Fund. The FCC will begin doling out money from the fund in October to telecom companies that agree to offer Internet connections in rural parts of the US.
That money is clearly of interest to Musk and his Starlink initiative, considering he said earlier this month that one of his main goals for the business is to “be in the not-bankrupt category.”
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