OneWeb files for bankruptcy
oneweb.world
oneweb.world
And let's be frank, an attempt to out-compete SpaceX on mass satellite production and cheap launches was doomed to fail.
Iridium used SpaceX very successfully to get their entire new constellation up.
As Elon recently said, they have ALL gone under. The goal of Starlink is to not go bankrupt. Well, it's actually to fund the Mars mission, but a first step is to not go bankrupt like everyone else did.
SpaceX's first propulsive landing attempt was September 2013, by the end of 2014 they had twice succeeded at controlled descents over the ocean. Their first landing on a solid surface (i.e. actual recovery of the booster) was late 2015.
So yes, there weren't yet reusable rockets, but the writing was very clearly on the wall.
Tesla still isn't in the satellite business unless you count the roadster that SpaceX launched, Starlink is part of SpaceX. It was announced at roughly the same time as Oneweb receiving funding (January 2015). My understanding is that Oneweb and SpaceX had been in talks that broke down, so they knew it was coming.
With the gift of hindsight that's true, but I disagree, it wasn't clear back then. Keep in mind that the concept of reusable rockets has been around ever since the first rocket launch around the 1960's, and we (humanity) threw away the entire thing. It took SpaceX to make reusable rockets real, but not for lack of trying on the part of Lockheed Martin and other defense contractors (in the US). SpaceX had only a very small (single digits) number of test launches they could do before running out of money. A couple more grid fin unknowns causing failures and SpaceX would have gone bankrupt so it wasn't clear back then.
Also keep in mind that back in 2015, it wasn't clear that Tesla was necessarily going to be successful either. The Model 3 was still a couple years away so nothing was really proven, publicly.
What would have happened if SpaceX had run out of money, we'll never know, but in the interim 5 years, the reusability of SpaceX's rockets has become clear. Despite all the shorts betting against Tesla, Elon Musk succeeded and smart money has learned not to bet against him, whether it be SpaceX or Tesla.
Tesla's success is relevant to Elon Musk maintaining full control of SpaceX and funding mars mission research. It wasn't at all relevant at that point for whether or not SpaceX would continue to exist as a company, or succeed at re-use.
This is in no way true. When SpaceX was working on F9 reuse, their business was (very) profitable at their launch prices. They are still pricing F9 launches at a point where the launches would be profitable if every launch was expendable. Reusability was not what they needed to win -- it was the victory lap after they had already won.
There is a lot of fud arguing otherwise based on external estimates, but they all fail to take into account that the internal cost of F9 is only less than a fifth of what all the competitors pay for their comparable rockets. The reason is that SpaceX is extremely vertically integrated, and every component that goes into their rockets is heavily optimized for cost first and performance second.
For example, most other American launchers use RL-10's for their upper stage engines. There is a good reason for this -- RL-10 with it's best-in-class Isp is quite possibly the best upper stage engine that exists. However, this comes at a rather steep cost that is not public knowledge but was in 2017 estimated to be ~$25M. The costs of the rocket engines on a F9 is not public knowledge either, but is known to be less than $500k each, or at most ~$5M total.
https://www.businessinsider.com/teslas-history-of-crisis-201...
Many of them ended up being salvaged afterward and many are still operating today (some at a profit) after going through bankruptcy: ORBCOMM, Iridium, Globalstar. All three have launched second generation satellite constellations. Bankruptcy doesn't have to mean society loses their value.
I'm as big of a SpaceX fan as anyone, but I hope we manage to salvage OneWeb out of bankruptcy and get at least the minimal constellation up somehow. Maybe they'll be able to switch to cheaper reusable launch providers like SpaceX or New Glenn as part of the bankruptcy.
Not necessarily. SpaceX has an advantage in owning the rails. It isn’t, however, decisive.
OneWeb failed to bring any advantages of its own to the table. It compounded its launch and first mover disadvantages by launching with ArianeSpace. It gave away any satellite advantages by using Airbus to make the birds.
There simply wasn’t any strategic ground for OneWeb to stand on.
SpaceX seems to be doing everything themselves. Amazon seems to be doing a lot but will likely outsource launching of the birds. Wouldn't be surprised if they fly on SpaceX rockets in part....
It would seem that in this case, it was.
So when he started OneWeb and then Ob3 (or vice-versa) I was skeptical. Now, reading about OW, and how it was mostly a middleman, I would say I am not surprised at all that he would pull this one and blame a virus. With chapter 11 he gets to protect his equity and compensation
I expect him to rebound, with even better compensation.
This is one in 10 years chance to reprice failed aqusitions, investments went bad, mismanaged opportunities etc. And blame unpredictable, external circumstances.
If we are to show loss on a quarterly report let it be large one-time figure. Heck we can even qualify for some bailout money.
My understanding is that from day one they were under pressure from Softbank and other backers to spend the initial capital aggressively -- to secure spectrum as quickly as possible, build out ground stations as quickly as possible, build out global operations as quickly as possible, and start launching satellites as quickly as possible -- with the implicit assumption that there would be additional capital available to get the company to launch.
The team, to its credit, accomplished pretty much everything they set out to do on an accelerated schedule, but then, when they needed additional capital to finish the build-out and launch... the additional capital they had been counting on failed to materialize on reasonable terms.
Many people working at OneWeb surely feel shortchanged.
Totally agree. This isn’t a Covid-19 story. It’s another SoftBank story.
The SoftBank-fuelled impatience led to strategic blunders including premature spectrum accumulation, vendor lock-in with Airbus, launch services lock-in with legacy providers and over hiring.
(shamelessly plugging my own website here)
Such a shame about OneWeb though, met some of them at a conference in Spain just a month ago, where the elephant in the room was StarLink already.
Ease of use is my primary focus so feels good to hear that it's recognised and appreciated!
(Payloads’ own engines works fine though)
One suggestion would be to either disable panning or give a snap to center button. I found it too easy to pan by accident when zooming out and then the rotation could flip the earth out of view
If they can't launch them, I wonder what will be the payload of the first Ariane 6.
Ariane 6 was a response to Falcon 9 first generation, and they designed it to compete with a Falcon 9 from 4 years ago, Falcon 9 is a different beast now.
Even launching 2 huge satellites is not gone work because there are fewer of those launches, and Falcon Heavy is getting a bigger fairing that could do that too.
Seems to me its more of a jobs program that claims 'national security' as a reason.
https://amp-ft-com.cdn.ampproject.org/c/s/amp.ft.com/content...
https://www.ft.com/content/8695c459-effd-4b54-8d96-69d8e614f...
...but also paywalled. This one is not:
That used to be a great design when satellites were expected to last 30 years, and the 'bent pipe' design meant data compression, encoding, error correction and modulation could be upgraded without changing the satellite hardware.
In today's world where satellites are lower, cheaper and only last ~5 years, it makes more sense for the satellite to be able to decode and route data, which gives it a significant capacity boost for the same power and spectrum usage (since you aren't amplifying and forwarding noise). Phased arrays with hundreds or thousands of beams also don't work well with the bent pipe architecture, since cross-talk between streams is hard to reduce.
Only if they convert to Chapter 7 would it mean they've given up on the business completely.
"Since the beginning of the year, OneWeb had been engaged in advanced negotiations regarding investment that would fully fund the Company through its deployment and commercial launch. While the Company was close to obtaining financing, the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19."
There were good reasons to be skeptical of OneWeb, but "consumer satellite communication companies have gone bankrupt before" is not one of them.
What lots of people expect is kind of irrelevant... OneWeb going bankrupt suggests that profit margins will be low at best, negative at worst. Cheaper launch cost is not enough to change the business from to non-viable to hugely profitable.
Who will be the customers of Starlink? Internet is a commodity for the average person, you can't make money in that market. This leaves special cases such as abandoned areas, airlines, ships, but that market is much smaller and it's unclear whether it can feed the massive capital costs of Starlink: launches, satellites, ground stations.
Edit: Providing service to ships in the ocean could be a problem, because of the lack of ground stations.
It's too early to speculate about profit margins before the company has finished launching its constellation and started providing a commercial service.
Also I don’t think you truly grasp the cost efficiencies spacex has and will achieve. Elon originally said that they could lower launch costs under $1m if the only cost was propellant and minor refurbs, compared to hundreds of millions. Even today their confirmed cost is 6x less than average [1]. This is not a 20% reduction or something. It is incredibly significant. one web was launching on other companies’ rockets, so that’s an additional disadvantage since spacex is only incurring the cost of the launch and no margin since there will be recovered from the internet service.
[1]: https://www.google.com/amp/s/theconversation.com/amp/how-spa...
Exactly my situation. I have symmetric gigabit and due to a nature of my business requiring symmetric fat pipe I have to live in a city. The minute I could get that gigabit in a wilderness I am out.
It definitely was an impactful change for us at first. I had to change some work workflows to do heavy network stuff on a remote machine. It took some time to refine and make (nearly) as efficient as doing it locally. I also had to sandbox all the streaming gadgets in the house and limit their bandwidth allowance.
But, the key for me was to move to an area with a reputable, locally owned WISP. It took a couple years but I found it. My WISP is run by an ex-IBMer down the road from me. The network is rock solid and goes down less than Comcast. I’m 10ms away from the nearest Google PoP. Everything on the network is solar-first.
These WISPs are out there and they make the decision to move to the country at lot easier.
Keep an eye out! I’m out in Colorado- Email me if you want to know where to look around here for good internet in a rural area.
This assumes that razor thin margins are bad, which is usually a safe assumption but in the case of Starlink, I say it's not open minded enough.
To boot Starlink online requires a minimum cost for service area (sats), but once you've got that area booted, onboarding new customers is trivial (vs laying fiber, cable, digging holes).
The user terminal is for each individual - "Looks like a thin, flat, round UFO on a stick."[0]
If you were offered $40 per Gb/s would you switch, 30? 20?
Personally I would switch because it's simply not f'ing Comcast.
[0] https://www.businessinsider.sg/spacex-starlink-user-terminal...
You would switch because you've imagined this service is magically cheaper and better, but now I say it'll be expensive and worse are you still enthusiastic?
Providing network service is a utility, and so yes razor thin margins are typical and that's too bad. It does make very high capital investment (such as launching huge numbers of satellites every few years) difficult to stomach though.
These projects (whatever Musk says about them when hyping his company) deliver expensive network access to places where it's otherwise not practical to offer service at all. They aren't going head-to-head with Comcast, or even with AOL, they're competing with "Physically take a day's / week's work to the A site where they have network access".
Yeah, there are a lot of places in the US--some of which aren't even really all that rural--that just don't have good Internet options. Today, satellite basically falls into the slightly better than nothing category but it's neither price-competitive nor good if you have essentially any other option. While I know people in tech who make do with only a satellite connection, I'm sure many reading this wouldn't consider that viable and it will be increasingly less so over time.
5G will presumably help in some cases as it rolls out but it certainly won't reach everywhere. And, presumably, over time places that don't have a certain level of Internet access will be increasingly unsuitable at least for long-term residence.
I read a nice overview of the constellations a while back, but I realize now that it's actually pretty outdated (2018, and it talks about optical crosslinks between SpaceX's satellites, which has been punted for now): http://www.mit.edu/~portillo/files/Comparison-LEO-IAC-2018-s...
So I don't know if my comment about throughput is accurate anymore.
It will soon become totally overloaded. A city like NYC probably has home/office bandwidth use of 40gig/sec per a few city blocks, nevermind the whole metro area.
It's not going to work as a home internet replacement if you already have fibre or cable service. Furthermore, fibre and cable can be upgraded easily by putting new equipment on each side (even cable internet has went from 40mbit/sec to 10gig/sec - fibre has even more capacity).
Elon himself has admitted that it won't work in cities for this reason.
A satellite covers a much wider area. We'll see how it plays out, but as a person living out here, I'm excited.
He’s about 7 years in and now serves 70% of our area. It ain’t cheap, but he’s been profitable enough now to be able to buy additional bandwidth from his upstream. We’re about to get 50/25 in the coming months.
I offer my services to him for free just to help contribute and make sure he doesn’t go out of business. It feels like a community effort! I set up the online billing portal and recurring payments, another guy goes on people’s roof to install the ubiquiti receiver, etc. we all chip in.
Initially I had setup a PTP link at 3 km with MikroTik gear and got 10-20 Mbps, varying wildly. I actually subscribed to an Internet connection over DSL in a building where I don't live and got permission to put an antenna and modem there to send Internet to my house. Later I subscribed to an actual Internet company, doubting my own skills in setting up the link. They don't offer anything over 10 Mbps, but I asked for them to let me have an unlimited link for an hour, and it did the same 10-20 Mbps with Ubiquiti gear.
Some WISPs use Cambium gear and apparently do offer 50 Mbps, but I'm not quite sure how well does that work, and how much better is Cambium, or i.e. Mimosa, compared to UBNT/MTik.
I think the clear line of sight and little radio interference were key to making this work. We don’t have cell or tv signal here. From what I understand the sheriff’s radio coverage is spotty as well.
Unfortunately, shocking as it is, most WISPs in developing nations are stuck on 802.11n equipment, especially using MikroTik's CPE and AP hardware.
If I'm ever redoing this link (I probably will, I've torn it down because I lost permission) I'll get Ubiquiti AC Gen 2 PTP gear, the best I can reasonably afford. And some aiming tools.
For reference, people are talking about wanting 25 to 50mbps, while I am getting gigabit for $45/mo (Cincinnati, Ohio). Hence the cat and mouse game.
My point wasn't that it doesn't make sense whatsoever, it's just that it is going to be a niche solution. Considering the insane capex of getting the sats in space, if the market is too niche, will it be able to pay back the capex costs?
You can't know until you do extensive market research.
>a lot of rural areas have semi-workable 4G coverage
Yes, but also extremely restrictive data caps and expensive overage fees per kilobyte.
>small wireless p2p ISPs
Yes, that would be the biggest competition to LEO satellite broadband. However, PTMP (point to multipoint) WISP requires line of sight and expensive CPEs to reach speeds over 20 Mbps for more than 1-2 km (0.6-1.2 miles). There is still shared capacity, and RF noise problems (as with satellites).
>it is going to be a niche solution
Unfortunately, yes. And if it ever gets anywhere near to being profitable and threatening the traditional fixed access telcos, they'll just spend some pennies (compared to revenue), lay fiber to most of the residences, and do a mix of FTTH and FTTC (VDSL2 with profile 35b for up to 50 Mbps at 1km (0.6 miles) or 350 Mbps at 100 m (0.06 miles)) to save costs for users who have good-enough-quality twisted pair telephone lines but are too far from the DSLAM to get good speeds.
VDSL2 is quite servicable, it is unclear to me why is it so underutilized in the USA. DSL is a dedicated service, since the telephone line isn't shared with multiple people nor multiplexed in any way, so it provides a very stable connection, if the speed is conservatively set per the line's maximum length.
It suggests that investors didn't think that OneWeb would have sufficient profits. The example I gave suggest that investors think that Starlink and the new Iridium satellites will be profitable.
The market for Starlink are the millions of people in rural and sparce suburban areas for whom internet connections are slow and expensive.
Your comment here is pure speculation.
From everything we know, the problem for them was huge capital cost and massive required cashflow to buy launches. All that when your competition has the exact opposite situation totally vertically integrated from the rocket launch to the manufacturing of the whole satellite.
Starlink has so far always gotten tons of money when they asked for it, suggesting the exact opposite of what you stated. OneWeb was just unlikely to get there.
A single contract from the US government that displaces their contracts with various providers could be profitable to spacex.
Interesting times.
http://tmfassociates.com/blog/2020/03/21/why-spacex-desperat...
https://pay.reddit.com/r/spacex/comments/fmp7sv/why_spacex_d...
I have no doubt that SpaceX can raise (I'd invest), but that $36B valuation might be in trouble.
https://www.nasa.gov/press-release/nasa-awards-artemis-contr...
They're 10% complete... And they are launching on Soyuz, which isn't exactly cheap when they need to do another 16 launches...
Exactly. Musk started making rockets when Russia wouldn't sell them on reasonable terms. The closer OneWeb got to finishing their constellation, the higher the bids would've been.
Perhaps one goal of this bankruptcy reorganization is to break their Soyuz contract.