Satellite-based broadband networks provider Hughes Network Systems is investing $50 million to join a consortium led by India’s Bharti Enterprises and the UK government that won a bid to acquire bankrupt OneWeb, the Low Earth Orbit (LEO) satellite operator.
With $50 million investment, Hughes is likely to acquire a minority stake of around 5% in OneWeb, which had launched 74 satellites before filing for Chapter 11 protection in March.
“Our continuing and strengthened involvement with OneWeb extends naturally from our position as a leading geostationary satellite operator and ground network innovator, along with a meaningful partnership with Bharti and longstanding relationship with the UK through our business operations in both countries,” said Hughes’ president Pradman Kaul.
Sunil Bharti Mittal, Founder, and Chairman, Bharti Enterprises said that the investment by Hughes underlines OneWeb’s exciting commercial prospects reflected in the ongoing discussions with some of the world’s leading strategic and financial investors.
Bharti Enterprises and the UK government had recently said they would jointly invest $1 billion in OneWeb that went bankrupt.
Bharti Enterprises and the UK government will reportedly hold 45% each in OneWeb, while balance 10% will be owned by Hughes and other existing investors. Bharti Enterprises, one of the founding members of OneWeb, had a strategic stake in OneWeb prior to the bidding.
OneWeb, which aims to take on the likes Jeff Bezos’s Amazon-linked Project Kuiper and Elon Musk’s SpaceX Starlin, was founded in 2014 by entrepreneur Greg Wyler to build a constellation of satellites to deliver wireless broadband globally. It had raised about $3.3 billion in debt and equity from a clutch of investors such as SoftBank, Airbus, Qualcomm, Coca Cola, Intelsat, and Grupo Salinas.
SoftBank, which was OneWeb’s biggest investor, pulled back funding which forced the satellite company into bankruptcy in March. According to the US bankruptcy court filings, OneWeb has estimated assets in the range of $1 billion to $10 billion and liabilities in the same range.
The global consortium is bringing the right players together to fulfil the promise of the OneWeb constellation in deploying low-latency services for communities, enterprises, governments, aeroplanes, and ships, Hughes’ Kaul said.
The global consortium, Kaul added, is complementing geostationary connectivity and ushering in the new era of multi-transport services that will serve growing bandwidth demand around the world.
Through its Hughes Europe division, which is headquartered outside of London, and sister company EchoStar Mobile Limited, Hughes said that it has worked closely with the UK Government.
Hughes’ India subsidiary Hughes Communications India Ltd, (HCIL) is currently in a process to merge its broadband satellite or VSAT business with Bharti Airtel.
The merger, which was announced in 2019, is still awaiting regulatory approvals and is expected to bring greater scale, operational efficiencies and market reach to deliver solutions for enterprise and government networks.