OneWeb remains one of the most talked about companies in our industry. Adrian Steckel, the new CEO of OneWeb, and Alex Clavel, Managing Director of SoftBank, spoke in-depth about the company’s prospects and how OneWeb will succeed in a complex operating environment. Clavel highlighted why SoftBank thinks OneWeb is such a great investment. “We see a strong management team. We were very excited when we started funding the company in 2016. Does the U.S. government have the bandwidth that they need? Does maritime? Does aero? We are doing this to get financial returns,” he said. “We have years as a service provider in Japan and elsewhere. We were looking at this as a new source of bandwidth that will become buildable. Do we care that it is a satellite company? We don’t. We continue to look at satellite investments. We don’t see ourselves as a satellite technology focused company. This is a new, exciting way to deliver bandwidth.”
SoftBank is confident that its investment in OneWeb will bear fruit in the long-term. Clavel also highlighted the importance of OneWeb doing good for people all over the world. “The human value of what we are doing is very important to us as an investor. We have funded renewable energy plants in Japan and India. We think technology is making the world a better place. The ROI is first and foremost, and then you will have bandwidth for schools for example, and things like this are very important to us,” he said.
For Steckel, the challenge will be to get OneWeb’s satellites up, and then to start monetizing them. Steckel admitted that for OneWeb to succeed, it has to have cashflow, and not just a vision. He highlighted why he thinks OneWeb has already overcome a number of early risks. “One of the big risks is the funding risk. You put in some money but it is not enough. The second risk is the technical risk. Will the satellites and ground system work the way they are supposed too. The third risk is execution. Today, the first risk (funding) has gone away a lot. We have done a $1.25 billion credit facility. The second risk is the technical risk, and the satellites are already performing above expectations. The third risk, execution, is not going away. We need to get prices down for user terminals.”
Spectrum will also be key to OneWeb’s success with Steckel describing the fact that OneWeb had “beachfront” spectrum which will enable it to capitalize on what it sees as its first mover advantage. “We will have a first mover advantage, but there will be competition. We are vertically integrated with the production of satellites thanks to our work with Airbus. It is not going to be clear who the cheapest launch providers. Our launch costs are costing a relatively a bit more of satellites. The proportion will come down. When we are fully operational at the end of 2021, we will represent over 20 percent of overall satellite capacity.”
Steckel also believes strongly that OneWeb will have few issues selling capacity on its system. “Our second generation of satellites will start to go up, when others will be at the first generation. These are long bets. We think the fundamental asset will be spectrum,” he says. “The technology will even up. We will see steerable beams. We are convinced that we will sell out our capacity —the issue is then adding capacity. Our second generation will interact with our first. We think it will be more efficient by a factor of seven times.”
The issue of space debris was bought up and Steckel admitted that OneWeb and others will have to take this issue very seriously. “We have a team of people that are thought leaders on space debris. It is not an easy issue. We think there is a lot of work to be done. We are working with regulators. The question is, who is the cop? Who is in charge? I think there is a need of regulation and greater regularity,” he says.
Clavel is optimistic for the future of company, even in a highly competitive environment. He concludes, “If you think of all the different use cases for broadband over the next 10 years, broadband will be available in places that it never has been before. This is a new way to deliver something that everyone would agree is increasing in its demand exponentially every year.” VS