Softbank Pumps $1B Into Global Web Access Race
Dec 20, 2016 9:09 AM PT
Softbank has cut a check for US$1 billion to OneWeb, which plans to build a constellation of satellites to provide Internet access to underserved parts of the world, the companies announced Monday.
Helmed by satellite industry veteran Greg Wyler, OneWeb raised a total of $1.2 billion in its latest round of funding.
The company will deploy 650 Ku band satellites into orbit at a height of 750 miles, which will offer more than 10 terabits per second of new capacity.
OneWeb also will build user terminals containing embedded LTE, 3G, 2G and WiFi. The company plans to start with a fleet of 750 satellites.
"Launching a global satellite network and making money from it has been a challenge," noted Jim McGregor, principal analyst at Tirias Research.
Motorola was the first company to make the attempt 25 years ago with its Iridium project, he told the E-Commerce Times, but because it selected the wrong technology and didn't foresee the competition from cellphones, it failed.
Plans and Manufacturing Facilities
OneWeb plans to launch 10 production satellites in 2018 for detailed testing, according to Wyler, the company's chairman. Six months later, it will begin launching the rest of its fleet.
The units will be manufactured at a new facility in Exploration Park, Florida.
OneWeb will begin providing low-latency broadband access to rural areas in the United States, and to emerging markets worldwide by 2019.
The company also will offer its networks to mobile operators and ISPs, so they can extend their coverage at low cost.
In addition, it plans to target cellular backhaul, the Internet of Things and connected cars.
OneWeb aims to connect every school to the Internet by 2022, and to bridge the digital divide fully by 2027.
"There's an old saying in business: 'If you're not growing, you're dying,'" McGregor remarked. "To reach the next billion people, the electronics community needs to look to new avenues and business models, with the understanding the ROI will be lower."
The Fight for First
OneWeb faces stiff competition.
Elon Musk's SpaceX last week filed an application with the United States Federal Communication Commission to launch its own global Internet access network with more than 4,000 satellites.
SpaceX has received investments of nearly $1 billion from Google.
Google, meanwhile, has its own Project Loon, which uses balloons to relay transmissions from its carrier partners' ground-based cellular towers.
Facebook, which plans to deploy a fleet of solar-powered drones, this summer announced the first full-scale test flight of its Aquila high-altitude drone.
Still, OneWeb might gain the upper hand. It's going to use new technology to produce satellites more cheaply than before, for one thing.
The cost to build, launch and insure OneWeb's satellite network and complete early work on user terminals will be $1.5 billion to $2 billion, according to Wyler.
Musk is prepared to spend $10 billion on SpaceX's network.
The expectation that billions of devices will interact in the Internet of Things raises "not only a question of capacity, [but also] a question of access to the network," observed Andy Mulholland, a principal analyst at Constellation Research.
OneWeb "is taking a bold step to bring a disruptive move to the current, more linear path of developing existing forms of connectivity," he told the E-Commerce Times.
OneWeb is separate from Facebook and Google, so its solution eventually could enhance both of their offerings rather than compete with them, Enderle suggested.
The stakes are high. "Everyone wants to establish foothold and become the preferred supplier," McGregor pointed out.
The main problem the hopefuls face is establishing a reliable network, he said, because"it doesn't matter if you're the first to provide services if they are slow or unreliable."
Revenue is another important issue, McGregor added, as "it's difficult to model revenue projections in new markets, especially from consumers with limited resources."