OneWeb investor to buy legacy satellite provider Intelsat
TOKYO, Japan — On February 28, SoftBank Group Corp., a 40 percent partner in the satellite internet company OneWeb Ltd., announced that it will buy up Intelsat SA in a debt-swap deal that injects $1.7 billion into Intelsat and reduces the legacy satellite company’s debt by $3.6 billion. The merged entity will provide global communications and high-speed internet worldwide.
Deal part of a larger effort
SoftBank Group is a holding company that manages multiple information technology and telecommunication companies, including the U.S. telecom company Sprint. The Intelsat move is one of the group’s many big-money acquisitions in the industry. Last year, they bought a United Kingdom-based computer chip supplier for $32 billion. That investment will be used to accelerate research in areas such as chip security and robotics.
Beyond the OneWeb-Intelsat deal, the Wall Street Journal reports that SoftBank plans to establish a $100 billion fund with the backing of Saudi Arabia’s sovereign-wealth fund and other partners to expand become the world’s biggest investor in technology over the next decade.
The deal, which must be approved by Intelsat bondholders, is expected to close by the end of the first quarter of 2017. It is expected to lower Intelsat’s debt of nearly $14.5 billion while allowing OneWeb to further expand its satellite manufacturing and deployment plans.
Growing the satellite business
SoftBank’s OneWeb move combines Intelsat’s existing fleet of 55 geosynchronous orbit (GEO) communication satellites with OneWeb’s planned network of over 900 microsatellites in low-Earth orbit (LEO). The new company merges the advantages of Intelsat’s large, high-throughput satellites in GEO with the low-latency (response time) of OneWeb’s closer spacecraft in LEO. Intelsat’s satellites in GEO provide additional coverage in high-density population areas.
As part of the announcement, Masayoshi Son, Chairman and CEO of SoftBank, said: “SoftBank has a long history of investing in disruptive, foundational technologies that promise to help us realize the future sooner. OneWeb is a tremendously exciting company poised to transform internet access around the world from their manufacturing facility in Florida.”
Stephen Spengler, Chief Executive Officer of Intelsat, said: “We believe that combining Intelsat with OneWeb will create an industry leader unique in its ability to provide affordable broadband anywhere in the world.”
Greg Wyler, Founder of OneWeb, added: “SoftBank’s investment underscores the evolution and continued success of our company and accelerates our strategic growth plan. We look forward to working together as we execute on our mission to build a global knowledge infrastructure that provides affordable broadband to the over four billion people across the globe without internet access.”
Spengler expects to be chief executive while Wyler will be executive chairman of the combined company.
OneWeb keeping busy
The merger looks to increase the speed with which OneWeb accelerates its progress into the satellite industry. In 2015, OneWeb announced a $1 billion deal with Arianespace and Richard Branson’s rocket company Virgin Galactic (now Virgin Orbit) to launch its satellites aboard Soyuz and LauncherOne vehicles.
OneWeb announced plans in April 2016 to build its 331-pound (150 kg) high-speed internet satellites at a new, automated 100,000-square-foot (9,290-square-meter) factory at Exploration Park, near Kennedy Space Center. In addition to its 900 satellites planned for the initial constellation, OneWeb stated that they could add as many as 2,000 more satellites in other orbits to meet demand.
While groundbreaking for the new facility was scheduled for March 1, the Orlando Sentinel reported that OneWeb postponed the event due to scheduling conflicts, and did not name a new date.
Bart Leahy is a freelance technical writer living in Orlando, Florida. Leahy's diverse career has included work for The Walt Disney Company, NASA, the Department of Defense, Nissan, a number of commercial space companies, small businesses, nonprofits, as well as the Science Cheerleaders.