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Why has the UK invested $500m in OneWeb’s satellites?

A scale model of a OneWeb satellite and its solar panel  - Regis Duvignau /Reuters
A scale model of a OneWeb satellite and its solar panel - Regis Duvignau /Reuters

The collapse of low-earth-orbit satellite business OneWeb in March kickstarted a global bidding war for its assets as countries and businesses around the world scramble to get their hands on its valuable satellite technology.

The UK bid won on Thursday night, sources told the Telegraph. Here’s everything you need to know about the deal:

What is OneWeb, and who owns it?

OneWeb, founded in 2012 as WorldVu, has raised $1.7bn (£1.3bn) in funding to develop a cluster of satellites around the world.

In 2015, it raised $500m in funding from Virgin Galactic and Qualcomm. The company later raised $1bn in funding from Japanese conglomerate SoftBank in 2016. Previous investors then ploughed another $200m into the business.

Who was bidding for OneWeb?

The Government's $500m bid for 45pc of OneWeb was part of a consortium of investors which also included Indian telecoms billionaire Sunil Mittal’s Bharti Enterprises.

Sunil Mittal - T. Narayan  /Bloomberg 
Sunil Mittal - T. Narayan /Bloomberg

United Arab Emirates sovereign wealth fund Mubadala was also in talks about joining the bidding consortium, The Telegraph reported. SoftBank, the largest investor in OneWeb, had also reportedly held talks with the Government about its bid.

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The consortium was competing against a rival bid by Canadian business Telesat that was backed by the Canadian government.

Other rumoured bidders included Amazon and SpaceX along with Eutelsat, American investor Cerberus Capital Management and three Chinese bidders, including carmaker Geely.

The winning bidder will gain control of OneWeb's assets, including its US factory and UK headquarters.

What can the satellites do?

OneWeb’s original plan was to use a network of 650 satellites floating 1,200km around the planet to beam broadband internet and 5G phone coverage around the world.

The company hoped to launch more than 30 satellites a month into orbit, but only managed to deploy 75 before the coronavirus pandemic caused it to file for bankruptcy earlier this year.

OneWeb’s hope is that the satellites can beam internet to remote parts of the world, reducing the need for villages in the countryside to spend thousands of pounds on costly fibre-optic cables.

How does OneWeb compare to GPS and Galileo?

A key motivation for the UK bid for OneWeb has been the possibility that its satellite technology can be repurposed and used as an alternative to GPS.

The UK is no longer part of the EU’s Galileo project due to Brexit, so a purchase of OneWeb could allow the country to build its own system by repurposing OneWeb’s existing satellite technology.

However, experts have warned that OneWeb satellites may not be up to the task.

OneWeb | A tangled history
OneWeb | A tangled history

Officials at the UK Space Agency told the Government that investing in OneWeb to build a rival to the Galileo system presents major difficulties because its low-earth-orbit satellites may be unable to provide accurate location signals.

Low-earth satellites similar to OneWeb’s mean navigation signals “should be considered not viable”, according to a memo seen by The Telegraph. They could be inaccurate, would require hundreds of satellites and could be more susceptible to interference from jamming technology and anti-satellite weapons, experts warned.

Could buying OneWeb reduce the UK’s reliance on Huawei?

Using OneWeb to beam 5G signals from the atmosphere could also allow phone operators to lessen their reliance on Huawei telecoms equipment.

Many of the UK’s leading phone networks use equipment from the Chinese business in their 4G and 5G networks, but a number of Conservative MPs have been encouraging the Government to place stricter caps on Huawei kit because of concerns about its links with the Chinese government. Huawei executives have consistently denied the allegations.

Owning OneWeb could mean that rural communities don’t need thousands of phone masts across the countryside fitted with Huawei kit, an attractive prospect for operators which could face political pressure to rip out Huawei kit.

Could buying OneWeb bring jobs back to the UK?

OneWeb’s corporate headquarters is in the UK, but its manufacturing has been taking place in a factory in Florida which is capable of producing two satellites per day.

A UK purchase of OneWeb could encourage the business to move some of its manufacturing capacity to the UK.

The UK is keen to position itself as a leading country for private space flight and satellite launches.

Plans for a new “space hub” in Scotland were approved last month, paving the way for British space companies to begin planning for their own launches.

A UK Government stake in OneWeb may put pressure on its directors to begin bringing manufacturing jobs back to the UK.