Intelsat sues OneWeb broadband satellite venture over a mega-deal that went sour

OneWeb satellite
An artist’s conception, released during the time when Intelsat was considering what would have been effectively a merger with OneWeb, shows a OneWeb satellite in orbit. (OneWeb Illustration)

One of the world’s biggest satellite operators, Intelsat, is accusing the OneWeb broadband satellite venture and its biggest investor, SoftBank, of breach of contract, fraud and conspiracy in a lawsuit seeking what could amount to tens or hundreds of millions of dollars in damages.

In the course of laying out its case, Intelsat told the New York State Supreme Court that it paid Redmond, Wash.-based Kymeta, a venture backed by Microsoft co-founder Bill Gates, $10 million for development of a flat-panel antenna for OneWeb’s constellation.

Intelsat’s Sept. 10 filing also said OneWeb has pivoted from its original plan to provide broadband access to underserved regions of the world to concentrate on the very markets that Intelsat was planning to serve under the terms of the deal it struck in 2015 with OneWeb: maritime and aviation mobility services, oil and gas industry services and government services.

The lawsuit claims that OneWeb decided to “abandon its business plan of focusing on consumer broadband, land-based connectivity and underserved geographic markets because OneWeb and/or SoftBank concluded such plan would not yield sufficient revenues and was not viable in the long term.”

Dig deeper: Full text of the lawsuit filed by Intelsat against OneWeb and Softbank

OneWeb, which has secured more than $3 billion in funding from Japan-based SoftBank and other backers, did not immediately respond to GeekWire’s request for comment — but we’ll update this report with anything we hear back.

Intelsat is seeking unspecified compensatory and punitive damages in a jury trial, plus a halt to actions that go against the original deal that Intelsat and OneWeb had.

The lawsuit traces troubles in the Intelsat-OneWeb relationship that go back to 2016, when SoftBank made its first billion-dollar investment in the venture. The conflict came to a head this July, when, according to the lawsuit, OneWeb told Intelsat that the original deal was null and void.

This month, OneWeb announced that it was working with “carefully selected distribution partners” to provide in-flight broadband services for airline passengers, and that it had a memorandum of understanding with one of Intelsat’s competitors, Iridium, to create a combined broadband service offering.

Intelsat alleges that OneWeb took advantage of confidential information that was shared during talks on expanding their business relationship in the 2017-2018 time frame, and that it gave no indication that it would seek to nullify the existing contract. At one point in 2017, Intelsat was working on a complicated merger and debt-swap arrangement with OneWeb and SoftBank — but that billion-dollar deal fell through months later, reportedly because Intelsat’s bondholders didn’t sign off on the plan.

At least one aspect of the Intelsat-OneWeb tangle has a connection to the Seattle area: Intelsat said it spent $10 million working with Kymeta to create an antenna for OneWeb’s user terminals, and facilitated contacts between Kymeta and OneWeb.

Kymeta didn’t end up participating in the OneWeb project. In February, OneWeb founder Greg Wyler told SpaceNews that a Massachusetts-based venture called Wafer is developing the antenna module for OneWeb’s satellite system, at an estimated cost of $15 per antenna. At the time, Wyler reported investing just under $10 million in Wafer.

OneWeb launched its first six satellites in February and plans to put hundreds more into low Earth orbit over the next year or two.

In March, OneWeb announced that SoftBank and other investors have committed another $1.25 billion in funding. And this month, the venture said it would start offering substantial broadband services for business, telecom and governmental users in the Arctic toward the end of next year. Full 24-hour coverage would be provided by early 2021, OneWeb said.

“Our constellation will offer universal high-speed Arctic coverage sooner than any other proposed system meeting the need for widespread connectivity across the Arctic,” OneWeb CEO Adrian Steckel said in a news release.

OneWeb’s competitors include SpaceX, which is in the midst of launching a constellation of thousands of Starlink satellites in low Earth orbit for wide-scale broadband coverage; Amazon, which is in the early stages of gaining regulatory approval for its Project Kuiper broadband satellite constellation; and Canada-based Telesat, which is building a constellation for business, telecom and government broadband applications.

About the Author: admin

i am as a writer and blogger...

Leave a Reply

Your email address will not be published. Required fields are marked *