OneWeb’s Powerful Partners in Their Own Words
Start-up satellite Internet provider OneWeb LLC addressed many of the issues that skeptics had used to question its seriousness.
The company announced $500 million in equity coming from Indian and Mexican telecommunications providers, ground segment builders, the satellite prime contractor and even from an ostensible competitor in satellite fleet operator Intelsat. Intelsat will now be a OneWeb partner, with the two companies sharing customers and spectrum.
Intelsat’s cash investment of $25 million is the smallest of those purchasing OneWeb equity, but it is key. OneWeb’s constellation of 648 satellites operating in Ku-band at 1,200 kilometers in altitude faces potential interference issues around the equator with respect to many geostationary-satellite operators.
While OneWeb has regulatory approval for its network, its spectrum allocation is secondary to the geostationary fleets, meaning interference conflicts likely would be resolved in favor of the geostationary satellite owners.
It is an issue that, in Ka- and Ku-band, took thousands of hours of debate some 20 years ago at the International Telecommunication Union as now-long-dead low-orbiting satellite constellation projects such as Teledesic and SkyBridge secured the right to coexist with the higher-orbit fleets.
Standing on the shoulders of these predecessors, OneWeb has committed to lower its power output around the equator to avoid interference using a complicated power-up and power-down sequence to adjust OneWeb’s extended power flux density when in heavily trafficked geostationary territory.
With Intelsat on board, OneWeb has an ally, not an adversary, in any future debate over interference. The two companies have agreed to share customers and Intelsat may even jump-start OneWeb’s service in some regions if OneWeb’s satellite deployment falls behind its aggressive schedule of being in service by late 2019.
OneWeb Chief Executive Greg Wyler said the company may strike similar arrangements with other fleet operators, starting with SES of Luxembourg, which is is the second-largest owner of Ku-band satellites. “GEO and LEO can work together on this,” Wyler said.
Also notable during the June 25 briefing in London was the presence of two future OneWeb customers, Bharti Enterprises of India and Totalplay Telecommunications Inc. of Mexico, both of which are investing in OneWeb.
Coca-Cola is investing, too. Wyler said the company is interested in assuring connectivity to its 25 million points of sale and to establish kiosks, called Ekocenters, that would sell soft drinks and serve as OneWeb terminal locales.
Here are excerpts from OneWeb partner senior executives, speaking at the June 25 event and in interviews.
Greg Wyler, OneWeb founder
“We have the spectrum, the funding, the chip technology, the satellite manufacturer, the launch and the markets. We now have the broad pieces of the puzzle to build a system of our intended size and scale. We had the support of the U.K. government with the regulatory work in pulling together the spectrum that the ITU [International Telecommunication Union] had set aside specifically for this type of mission.
“Coca-Cola has been a fantastic supporter. They have a program called Five by 20, which is to empower 5 million women by 2020, and Internet resale in some of the villages we’ll be in, and in Coca-Cola’s 25 million reseller agencies around the world, is one way of doing this. They are planning Ekocenters in villages. This is a company that knows how to bring product to the furthest islands in Indonesia or Papua New Guinea.
“We said we’d need $500 million and we now have that, in cash. The funding will last a couple of years. We don’t need to look for more equity for two years. This will be a class debt-equity structure for the financing of the project.
“Satellites are a big part of the system, but if you ask what the hardest thing to do was, I’d say it’s the chips in the user terminal and the ability to hand over thousands and 10s of thousands of customers seamlessly every second, moving 50 megabit-per-second data streams from one satellite to another, while meeting all the regulatory requirements.
“The terminals we talk about at the rural schools will also have a tremendous amount of cache on them — 512 gigabytes or 1 terabyte of cache — so that governments can put entire school curricula in them, or health care information, and make it available to everyone in the area on their smartphones or tablets, almost like a continuously updatable newspaper.
“Intelsat’s high-throughput satellites will give us some levels of connectivity before we have our full system operational.
On whether OneWeb competes with O3b, a Wyler-founded company doing Internet trunking from satellites in medium-Earth orbit:
“O3b is selling trunking services to telecom operators, they are not going direct to consumers or putting terminals at schools. I don’t see OneWeb as a competitor to O3b. O3b has 12 satellites up and is doing really well.
“The reason we wanted to bring this out today is for governments to see how real we are, so that they can make their own assessment. We also had to have all the pieces in place and demonstrate that it can be built before approaching export-credit agencies. You need to do that for debt financing. They want to hire consultants to look through all the technology.”
On SpaceX’s plans to launch a Ka-band satellite Internet network, and its announcement of building two Ku-band satellites, in OneWeb’s spectrum:
“The ITU has spectrum rules. The Ku-band that we have has a priority position, which is super important. That priority allows us to build our own system and assure that no one else can cause interference.
“Intelsat has the largest fleet of Ku-band geostationary-orbit satellites in the world and interaction with those is very important for OneWeb. We have quite a bit of technology to figure out on how not to interfere with each other.
“In terms of somebody else saying they want to do something in the spectrum, whether experimental, meaning short-term – I can’t speak to it. I have no idea. I mean, we could set up a cell tower in Bharti’s spectrum. The spectrum rules are there and will work themselves out.”
Tom Enders, CEO, Airbus, a OneWeb investor and its satellite builder
“Our teams met [with OneWeb] first some 10 months ago. Almost immediately we said: This is something we need to be part of.
“We brought our best engineering minds together. We basically stuck them in a little place in Toulouse [France]. We brought in people from the UK and other parts of the company — not only the space people.
“We brought the commercial aeronautics people because — you know, space people, well, how many satellites do we launch 10, 12 or 15 a year? In commercial aircraft, we are currently delivering more than 600 aircraft a year.
“So we took commercial aircraft guys and merged them with the space guys and came up with good solutions…. People overuse the word ‘transformational.’ But when you go from producing 10 a year to producing 300 or 400 a year, it really is transformational. We’ll design the first satellites in Europe and then probably produce them in the United States, and that fits our strategy as well.
“I think we all feel that space is getting more important again.”
On satellites versus high-altitude platforms or drones:
“We hope that, eventually, we can make a high-flying solar-powered UAV to stay up for months. Right now we are at about two weeks or so. But these are local solutions. I can hardly imagine these pseudo satellites, UAVs, distributed all over the globe. Satellites are easier to deploy and are much preferable.”
Sunil Bharti Mittal, Chief Executive, Bharti Enterprises, OneWeb investor and future customer
“In the mid-1990s I was one of the persons who stuck his neck out and said Iridium will fail. I came from terrestrial networks, where technology was taking shape, common standards were being put together and roaming was moving very fast across the globe.
“I said: The [Iridium] satellite technology, which had such long latency and clunky terminals, doesn’t have a future. We all know what turned out to be the future of Iridium and Globalstar.
“I am ready to put my neck on the line again to say: This [OneWeb] is a game-changer. Nobody knows it better than me. I go out into the rural areas and into the deep forests of Africa, the Himalayas, where it’s almost an impossibility for me to connect those last few hundred million people.
“[Bharti] Airtel’s network is one of the world’s largest after China and it goes really deep into rural areas. I say this with the utmost confidence: This particular project, OneWeb, will mitigate the problem we are facing in connecting these rural areas onto the broadband networks.
“For countries like India, Bangladesh, Sri Lanka and Africa it is essential because there is no other infrastructure to deal with the last remaining limitations. The only way to do it is with satellite communications for good broadband connectivity.
“The exciting part of this is that it’s going to be ubiquitous — 648 satellites. It will have no difficulty accessing these difficult areas. With the technology it is using and the innovation it will be affordable, low-cost.
“Most importantly from my point of view: It will work on the same terminals that you have in your hands, the 3G and 4G handsets. You drop in a box [OneWeb terminal] into a school or a village and you create a coverage zone in the area. The village is connected, the people around the school are connected back into the world of Internet.
“I just can’t wait for this project to be launched into commercial service in 2019.”
Paul Jacobs, Chairman, Qualcomm Inc., OneWeb investor and chipset maker
“Every tech guy that gets up to talk says their technology, some obscure thing, is going to change the world. It’s almost a joke on HBO’s ‘Silicon Valley’.
“This is no joke: This global system absolutely will change the world. We’ve already done a lot, taking cellular systems and bringing mobile broadband around the world. It’s humanity’s biggest platform. So many people use it everywhere.
“But maybe I shouldn’t say everywhere. The vision of OneWeb is to fill the gaps, and make sure that there is literally no one in the world who doesn’t hav access to Internet and connectivity.
“We had the idea before, of getting global coverage. We built the Globalstar system. But there we made a mistake, because we didn’t realize how powerful cellular was and how it was going to expand so rapidly. It’s just what Senil [Bharti Mittal] said, which he understood better than we did back then….
“This is the result of our learning from those mistakes. The key mistake was trying to sell somebody a satellite phone that you have to go outside to use and erect an antenna on it, and trying to sell that through the same channels, as we were working with cellular operators, whose phones were cheaper with better coverage because you could use them indoors as well.
“So now, with backhaul in the sky, we are working with network cellular operators and people will use existing terminals. That is a critical difference, plus the satellites are cheaper, smaller and the launches are therefore cheaper.
“But what we did back then was build all the technologies. The technologies that were new back he are now faster, lower-cost, with better performance. That’s what’s going to make OneWeb so much more powerful.
“The other key thing: We’re going to use it for backhaul in the sky. Instead of having to sell a satellite phone that competes with a cellular phone, we’re going to sell a technology that provides the base stations that allow more coverage, and everyone can use their own smartphones and tablets, which have already been cost reduced because billions of them have been sold.
“What we’re doing specifically is building the air links, in both directions. We have done that, we have a little experience in that. We’re doing the reference designs for the ground terminals and we are making sure they will support not just WiFi in the local area, but all the cellular communications – 3G, 4G, licensed and unlicensed bands.”
Pradman P. Kaul, President, Hughes Network Systems, a OneWeb investor and builder of the ground network
“Why are we investing? We believe OneWeb is a game-changing satellite system. We’ve been in the industry for 30-40 years. There have been some discrete events that have changed our industry every five to 10 years, and you see something major happen. I think this will be the next major change.
“For the first time, the really innovative OneWeb design and the status of the device technologies, and the phased-array antennas, have now reached a stage where the economics are OK.
“We were all involved 20 years ago in Teledesic and some of the other broadband systems that didn’t make it. It was just too early. I think the time is right now. We see our way to being able to develop terminals and gateways using the OneWeb system design, which will make things economical.
The second reason for our investment is that, if this is going to happen, it could be a disruptive force in our industry and we want to be right in the middle of that as a technology developer and equipment manufacturer and as a service provider.
“It was a perfect fit. We have been actively involved with Greg on the system’s design for some time now. We understand the technology.
“Step one for us is a three-month network system design to generate the specifications and the requirements documents for the terminals and the gateways, followed by actually starting work on the development. So the next three months will be an intense effort, with our friends at Qualcomm and the satellite guys, to finalize the system requirements and the equipment specifications so we are all building to the same set of requirements.
“Then we would have a statement of work in three months. Then it’s going to take a couple of years to develop the product and go into manufacturing. We’re talking about an in-service date of mid-2019, so we should be in production sometime in 2018.
“It’s a lot of terminals, a lot more than what we’ve been used to. In our Jupiter business [U.S. consumer satellite broadband] we have 1 million subscribers. This I think will have an order of magnitude more subs than that.
“It’s extremely important to have customers backing this from the beginning. In fact that’s one reason why OneWeb wanted us on the team. One reason is the technology that we bring to the game, but we also have distribution. We’ve been in this business in the U.S., Europe, Brazil and India, and we’re going to leverage the distribution channels that we have and the dealer networks we have in these countries.
“Bharti and Intelsat and Grupo Salina bring that same capability in their markets. So we start this thing off with a very mature, existing distribution network that is global in nature. That gives us a big advantage. We’re not starting from scratch.
“Greg has the ITU rights in Ku-band, which is a coup. Nobody can take away his Ku-band rights on the user terminal side. The Ka-band for the gateways is going to be point to point. But the landing rights in these countries are the key.
“There’s a whole part of the world like Europe and the U.S. and Brazil that should be no problem. There will be countries like India and China that will require a lot of work. But we have three to four years to achieve that. In a big part of the world there is an open-skies policy. In another part, we haven’t solved the puzzle yet.
“Everybody is aware of it. I know India well, and between Bharti and us we will have to work hard on the regulations in the next two-three years to get them to allow us to use the system. Bharti is a very influential company in India, and Senil is a well-respective executive. And we’ve been in India now for 15 years offering satellite services.
“Fundamentally our strategy is to continue running our business full speed as we are now. For the next four or five years it’s going to be going gangbusters, like is has been. It’s clear to me we are going to need both GEO and LEO systems to handle the volume of data.
“The beauty of a GEO system is that if you don’t have a latency-sensitive application, you can put a higher bit density over a certain region than you can with LEO satellites that have smaller capacity and bandwidth.
“For example, the amount of bandwidth I could get over New York City with a geostationary satellite with a 1-gigahertz-bandwidth beam, is going to be more than I could with a LEO system. But the LEO system has low latency and more capacity over the whole world.
“We are going to make a terminal design that is going to have a seamless switchover capability between a LEO and a GEO, especially when you come to things like streaming, which has not that sensitive to delay. We ought to be able to use a lot of the concentrated capacity that a GEO brings to a spot beam. And for global coverage and digital divide, and providing capacity to every square inch of the globe, we’ll use the LEOs. Both have a great role to play.
“Certainly that is the goal, a seamless transition for the customer from LEO to GEO. I am not saying we have achieved it today, but that is clearly one of the design goals. It’s definitely doable, the question is how it impacts the cost, or do we have to have two different types of terminals.
Stephen Spengler, Chief Executive, Intelsat, OneWeb investor and satellite operator that will share bandwidth with OneWeb
“If you are using WiFi on an airplane, or using Facebook on a cruise ship you are likely to be using our services. Why are we partnering with OneWeb? We do believe in challenging the status quo. We share OneWeb’s vision.
“We see the opportunity for many synergies from our OneWeb alliance and its planned interoperability with our next-generation Intelsat satellite fleet. This will be the first time that a GEO and a LEO satellite fleet will be integrated from a service standpoint, which is truly revolutionary.”
Sir Richard Branson, Chairman, Virgin Group, OneWeb investor and satellite launch-service provider
“Importantly, because these satellites are going to drop out in five years’ time – they drop out one at a time – they need to be replaced within 24 hours’ notice. [With Virgin Galactic’s] LauncherOne, you can set send up your plane, drop a satellite and replace it right away. No one else can do that. It looked like the perfect marriage” of the two companies.
On using upper-atmospheric balloons for Internet delivery instead of satellites:
“Balloons might work over cities. I am a balloonist. I once took off from the south of Japan, aiming for Los Angeles. The wind doesn’t always go the way you want. I missed Los Angeles by 3,500 miles and ended up in the Arctic. It’s very brave, the whole [Internet] ballooning project. It’s not necessarily going to be completely reliable.”