News & Media, page-2103

Doubts about OneWeb's future success still linger.

https://spacenews.com/how-oneweb-plans-to-make-sure-its-first-satellites-arent-its-last/

Extracts from article:

OneWeb’s satellites are a technological marvel. Traditional geostationary communications satellites are as big as trucks, take years to build, typically cost $100 million or more and still might generate less throughput than a few OneWeb satellites.But the satellite industry has seen other technological marvels reach orbit while the business plans behind them fall back to the ground.The most notorious failure was Teledesic. The Bill Gates-backed venture raised $1 billion in the 1990s to build an 840-satellite “internet in the sky” but flamed out a few years after launching a single demo satellite.

OneWeb’s current risks are seen as primarily financial, not technical, according to Eric Anderson, a former Moog chief technologist and CSA Engineering executive involved in Teledesic and Iridium. “If their revenues are slow in growing, which I expect they will be, then they can’t plow anything significant back into capital expenditures like building new satellites and ground station infrastructure,” Anderson said.

The new round brings OneWeb’s total capital to $3.4 billion — a sizable sum, but one that’s significance can’t be fully gauged without a total cost estimate for the OneWeb system. While early estimates ranged from $1.5 billion to $2.5 billion, OneWeb no longer shares projections for deploying the constellation.

Roger Rusch, president of the satellite consulting firm TelAstra, thinks both Wyler’s $4 billion estimate and Uphold’s dubious $6 billion figure are too low. He estimates OneWeb will ultimately need $7.5 billion to complete its system, and possibly more if it finances the user terminals.“The realistic number is probably far beyond where they are right now,” said Rusch, who helped design several satellite systems with manufacturers. “It’s probably three times more than what they have.”

Rusch cautioned that less obvious costs, like gateway ground stations, real estate and regulatory licensing can further inflate costs beyond early estimates.

OneWeb still has a long way to go to sell out capacity of the envisioned initial system of 648 satellites.The day of the launch, OneWeb announced its first two customers. OneWeb declined to provide contract values, but Steckel said the Talia deal “almost makes our year just with that one contract.”The Soyuz rocket carrying OneWeb’s first satellites also bore the logo of FIRST (For Inspiration and Recognition of Science and Technology), a nonprofit focused on instilling youth with a fascination for science and technology. It’s not clear how soon either announced contract will generate significant revenue for OneWeb.

Steckel said OneWeb will be profitable in 2022, going so far as to project achieving profitability after the first six months of full, global service.Outside observers caution that OneWeb appears likely to burn through a lot more cash before the constellation starts generating significant revenue.

“They need to get to this level of meaningful service, whether it’s 300 satellites or whatever, so that the full build out of the network is considered viable by other financiers,” Anderson said. “It seems really close, their ability to do that right now, but if revenues are only trickling in, or the margins are substantially lower than the high margins that traditional satellite operators can get, then I think they are not going to be able to get the additional billions.”

But questions about OneWeb’s ability to pull off its dream linger, nonetheless.