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OneWeb goes bankrupt, lays off staff, will sell satellite-broadband business:
OneWeb has filed for bankruptcy and intends to sell its business, bringing an abrupt end to the company's plan to offer high-speed satellite Internet service around the world.
OneWeb announced Friday that it "voluntarily filed for relief under Chapter 11 of the [US] Bankruptcy Code," and "intends to use these proceedings to pursue a sale of its business in order to maximize the value of the company." OneWeb made the decision "after failing to secure new funding from investors including its biggest backer SoftBank," largely because of the coronavirus pandemic, the Financial Times wrote. OneWeb also "axed most of its staff on Friday," the FT article said.
OneWeb previously raised $3 billion over multiple rounds of financing and was seeking more money to fund its deployment and commercial launch. "Our current situation is a consequence of the economic impact of the COVID-19 crisis," OneWeb CEO Adrián Steckel said in the bankruptcy announcement. "We remain convinced of the social and economic value of our mission to connect everyone everywhere."
The bankruptcy announcement came a week after OneWeb said it expected "delays to our launch schedule and satellite manufacturing due to increasing travel restrictions and the disruption of supply chains globally."
[...] OneWeb had already launched 74 satellites and demonstrated broadband speeds of more than 400Mbps with latency of 32ms. The company was a key competitor to SpaceX's Starlink division, which has launched 362 satellites and plans to launch thousands more. The satellites of both OneWeb and SpaceX operate in low Earth orbits, allowing them to provide much lower latency than traditional geostationary satellites.
OneWeb at one point was ahead of SpaceX in the satellite race, having secured Federal Communications Commission approval in June 2017, before SpaceX did. OneWeb planned to serve the United States and global markets from "720 low-Earth orbit satellites using the Ka (20/30GHz) and Ku (11/14GHz) frequency bands," the FCC noted at the time.
OneWeb's bankruptcy announcement noted that it owns the rights to "valuable global spectrum," which may entice a buyer. OneWeb said it has also "begun development on a range of user terminals for a variety of customer markets, [and] has half of its 44 ground stations completed or in development." The current deployment of 74 satellites is "too small to offer telecoms services or generate revenues," the Financial Times wrote.
(Score: 3, Interesting) by Anonymous Coward on Monday April 06 2020, @11:04AM (4 children)
Ok ok ok, let the execs' face-saving reason-finding begin.
Current liabilities (according to article): 2.1 billion USD. Of which 1.7 billion belong to a single investor.
Let's assume an average salary for all 531 employees in the company of 150.000 USD (costing the company approx 300.000, according to a rule of thumb that works for Germany) per year.
Let's also assume that the pandemic would cause a complete cessation of work for a full year. No home office at all, nothing.
That would be a cost of 159.3 million USD in salary. (yes, this is totally naive, so sue me)
Now think for a while: you are a big-time investor, venture-capital, risky stuff. You have a choice of a) losing your 1.7billion b) investing *lots* more money to get your results or c) investing *lots* more money to get your results plus 160 million to ride out the pandemic
Let's be honest: are 160million, the cost of the pandemic, going to be a problem? Even if that naive number were 3 times as high?
I rather think that option b) looked totally unattainable, and that's why they stopped throwing good money after bad. The cost of the pandemic didn't come into play at all.
But of course "The pandemic killed us" looks like a much better scapegoat than "We ran the company into the ground" or "Our plan didn't work out so well as we thought".
And "Our main competitor is way ahead, and faster, and funded by a maniac" also didn't have a say at all in the venture capital's decision ...
(Score: 2) by esperto123 on Monday April 06 2020, @11:15AM (1 child)
I think the investors decision is two fold, first, they probably saw the writing on the wall that they could not compete with starlink, too few satellites that cost too much to launch, second, to me, softbank is out of money, they put huge amounts on bad bats like wework and it is catching up to them.
(Score: 4, Interesting) by takyon on Monday April 06 2020, @12:17PM
Yup:
SoftBank is letting internet satellite company OneWeb file for bankruptcy, a sign Masayoshi Son has learned lessons from WeWork [cnbc.com]
Before the pandemic, Gwynne Shotwell was absolutely trashing OneWeb in October:
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by driverless on Monday April 06 2020, @03:12PM (1 child)
Covid19 is going to be 2020's universal excuse for everything, "it was all going fine until Covid19 came along, everything bad is Covid19's fault". From all the way at the top, "the US was running fine until Covid19 came along, everything bad is Covid19's fault" (Trump) to "my homework assignment was going fine until Covid19 came along, everything bad is Covid19's fault" (little Billy Bob Saunders, age 7), big or small, young or old, Covid19 is your get-out-of-jail-free card when you've screwed up.
(Score: 2) by DannyB on Monday April 06 2020, @04:38PM
That's true. The following excuse no longer works.
Window 8 my homework.
The Centauri traded Earth jump gate technology in exchange for our superior hair mousse formulas.
(Score: 0) by Anonymous Coward on Monday April 06 2020, @07:32PM
The birds in orbit are a liability if they get out of control and make space junk.
Before taking the never let a good disaster go to waste, Covid parachute, do they need to provide funds to make sure this does not happen?
The investor has a claim to take probably all they have, but the senior claim is to preserve the orbit.