A consortium back by the British government has won the auction for collapsed satellite broadband firm OneWeb.
The UK-US company entered Chapter 11 bankruptcy protection in March after investors pulled out, leading to an auction of its assets in New York earlier this week.
OneWeb’s original plan was to place hundreds of satellites, 74 of which have already been successfully launched, into a low earth orbit to provide broadband to homes and businesses around the world. The government hopes to use this capability to improve broadband and 5G connectivity in remote and rural parts of the UK.
Reports suggest it’s also exploring the potential to operate its own navigation system, although the viability of such a scheme has been questioned by some experts.
The winning $1bn bid included Bharti Global Limited, owned by telecoms billionaire Sunil Mittal, with the UK government pledging $500m in return for a “significant” shareholding.
In a statement the government said buying OneWeb would support its ambitions “for the UK to be a pioneer” in novel satellite technologies and for the country to “join the first rank of space nations”.
It added that Bharti Global, owner of the world’s third largest mobile operator, would provide “commercial and operational leadership, and bring OneWeb a revenue base to contribute towards its future success.”
Business Secretary Alok Sharma said: “This deal underlines the scale of Britain’s ambitions on the global stage.
“Our access to a global fleet of satellites has the potential to connect millions of people worldwide to broadband, many for the first time, and the deal presents the opportunity to further develop our strong advanced manufacturing base right here in the UK.”
The government stake gives it a final say over any future sale of the company, and over access to OneWeb technology by other countries on national security grounds.
OneWeb CEO Adrian Steckel commented: “We are delighted to have concluded the sale process with such a positive outcome that will benefit not only OneWeb’s existing creditors, but also our employees, vendors, commercial partners, and supporters worldwide who believe in the mission and in the promise of global connectivity.
“The combination of HMG and Bharti will bring immediate value as we develop as a global leader in low latency connectivity. This successful outcome for OneWeb underscores the confidence in our business, technology, and the work of our entire team.
“With differentiated and flexible technology, unique spectrum assets and a compelling market opportunity ahead of us, we are eager to conclude the process and get back to launching our satellites as soon as possible.”
Last month manufacturing union Unite called on the government to ensure any bid delivered jobs in the UK space sector.
National officer for the aerospace sector, Rhys McCarthy, said: “The country urgently needs world-leading satellite infrastructure to support modern businesses and our defence systems.
“We want to be reassured that a government stake in OneWeb is the right way forward on this and will mean security and jobs for UK aerospace workers.”
OneWeb’s satellites are currently made in Florida through a joint venture with Airbus.
On Friday the firm’s UK Managing Director, Richard Franklin, said: “The UK government’s vision in backing this project will drive innovation and new ways of thinking about how space can contribute even more to the UK economy, and the country’s defence requirements, as well as playing a part in delivering broadband internet to communities across the country.
“We look forward to supporting OneWeb in the next phase of their business and growing the UK contribution to this market-changing business.”
Completion is subject to approval by US authorities, including the Committee on Foreign Investment in the United States which reviews the sale of US based businesses to foreign entities.