Sunil Bharti Mittal is one of India’s richest business people, and is worth over $10 billion according to Forbes. He is the founder and chairman of Bharti Enterprises, one of India’s leading conglomerates with diversified interests in telecom, insurance, real estate, and agriculture, in addition to other ventures. Recently, Mittal has made news in the satellite sector as he has joined forces with the U.K. government, investing in OneWeb to pull the company out of bankruptcy and bring a new dynamic to the Low-Earth Orbit (LEO) operator.
This was his second time getting involved with OneWeb. Bharti Enterprises was part of the group including The Coca-Cola Company and Intelsat that invested in into the business in 2015, but later sold the stake to SoftBank. In this wide-ranging interview, Mittal talks candidly about his renewed faith in OneWeb, how he had forgotten about the company before renewing his interest, what he thinks of SpaceX’s strategy, and why he thinks the investment in the “damaged gem” OneWeb was worth the risk.
VIA SATELLITE: Could you give us some background on Bharti’s interest in OneWeb? When did you start to seriously consider buying it alongside the U.K. government?
Mittal: I come from the world of telecommunications, and I have been here for the last 25 years. I have had some other business interests, but this has really been my life. What we have seen is that it is almost impossible to cover the last billion people with fiber or radio terrestrial networks. It is too expensive and too time consuming and for the last 25 years, me and my entire telecoms fraternity have tried and tried, but have not been able to go to the last unconnected people. Then there are areas you can never connect such as oceans, aviation, mountains, deserts, forests, and you need satellite.
Today, they rely on poorer quality satellite in GEO [Geostationary Orbit] to provide services, with very long lead times to get signals. The latency is very high, the speeds are not great. The industrial logic for having something that can deliver a 4G service or 5G service on the ground from the sky is quite compelling. A lot of people have tried in the past — Iridium and Globalstar have tried but not succeeded. The time has come now for that to be efficiently developed.
I was the fourth industrial partner in OneWeb when we launched it five ago years in London, with Sir Richard Branson, Paul Jacobs [of Qualcomm], and Tom Enders from Airbus. Greg Wyler was the founder. He is a bundle of energy, very bright, at times a bit chaotic, but an extremely bright person. I signed onto it and was one of the principle shareholders. But two years into it, I realized there were too many pushes and pulls from different shareholders and I couldn’t see the company moving in the direction I wanted. I sold my stake to SoftBank, and SoftBank then bankrolled it for another $2 billion, totaling an investment of $3.3 billion before it went into bankruptcy.
I had forgotten about it, to be honest with you. But then we got an invitation from the British government and I already knew about this company. My only request was that you really need to commit yourself. You can’t just give a $500 million subsidy and run it. We will need the power of the British government behind this and they were very keen to save this vital asset in space. They committed to $500 million, and then we committed to that, and they gave us the chance to do the commercial aspects of this project.
This is what we have done: We have bought the supply chain into motion again. We have renewed every contract, started up the factory again, satellites were getting manufactured. We contracted all 16 launches again and did a lot of work of hiring people. Within 45 days of taking over the company, we had returned to flight, and at 35-40 milliseconds, you will have mobile network type of quality anywhere in the world.
VIA SATELLITE: You said there you had almost forgotten about OneWeb after you exited it the first time, was this an opportunistic way to get back in?
Mittal: LEO constellations can cost anywhere from $5.5 billion to $7 billion. If such a start-up was presented to me now, I would not take it. But there was a large amount of money already spent. So, with $2.5 billion we are proposing to spend, this will be the cheapest constellation anybody has ever had. As new shareholders, we get the benefits of the past investment, this makes economic sense.
Today you can’t get spectrum priority – we already have it. If I was to start today, I would be way behind in the queue. There were 74 satellites up in the air before Chapter 11, this meant OneWeb had delivered on ITU [International Telecommunications Union] 10 percent of fleet requirements, and secured its priority through bringing into use [BIU] compliance. That made it attractive. With spectrum secure, billions of dollars of investment already done, BIU, and a good supply chain, this was a great opportunity. This is a strategic area of high interest, and combined with the opportunity that came up, it made perfect sense.
VIA SATELLITE: What excites you about having access to a space capability like OneWeb’s? How do you see the benefits of working with the U.K. government here?
Mittal: Let’s look at some of the benefits, noting that there can also be can be downsides in dealing with government. Governments can be slow, take time. We were very clear in the roles of the U.K. government, Bharti, and private investors.
They have key strategic issues, some of them around the transfer shares to hostile nations, security issues, privacy issues. With OneWeb investment, they have a seat at the table of a critical space infrastructure future. This will galvanize the U.K. space industry. The prime minister was very keen to do this, particularly coming out of the EU. The U.K. does not have depth in its national space industry, that even countries like India have. India manufactures its own satellites, launches its own rockets. There are countries out there that are not as advanced as the U.K., but still ahead in space. $500 million may sound like a lot of money, but for taking an option to be in space in this way is a very small stake.
What do they contribute? They have a long and proud history of supporting international development and environmental goals, and OneWeb will assist their work. The U.K. government contributes to a special relationship with the U.S. government, and other Five Eye alliance partners, which is very important to us because we want to sell to the U.S. Department of Defense, Ministry of Defence, and other defense forces around the world. They will help us to get market access, landing rights, wherever we need. I would also say that the British flag is helpful within the wider international community, and our Indian partnership helps further.
VIA SATELLITE: When this deal was announced it brought about a lot of reactions, particularly on the U.K. government’s involvement. Some called it a stroke of genius, some said it was madness. Why do you think this deal makes sense from a U.K. government perspective?
Mittal: I would say if the U.K. government was doing it on their own, it may have been quite questionable. You need to drive efficiencies with projects such as these. I don’t know if the U.K. government would have gone ahead with this if we had said no to this.
But, I know the comfort they drew from someone else putting their own money into this. This is not coming from the Bharti Corporation side of things. This is coming from my private investment arm and not from our public telecoms company. Every decision in hindsight can look like a genius or madness decision. Every genius decision can be seen as madness and vice versa. Time will tell. Who knows where this will land. I feel pretty confident as every passing week goes by. I am not a native of satellite. But, I have read more, discussed it more, and I am more and more convinced we are on the right path.
VIA SATELLITE: OneWeb’s system was mainly being built for connecting the unconnected, as well as verticals like aviation and maritime. It wasn’t built with satellite navigation or government communications. How will the system fit in with the new owners it now has?
Mittal: The mission remains the same. We want to connect the world. That has not altered. But, in the last two years, for a variety of reasons LEO- delivered resilient Precise Navigation and Timing [PNT] alternatives to GEO/MEO [Medium-Earth Orbit] GPS have attracted interest. Our first generation satellites are capable of delivering resilient timing – without the need for on-board-atomic clocks. The second generation is a blank canvas, ready to provide a platform for the full alternative. The U.K. government has already moved away from a minimum 5 billion pound investment in a GNSS [Global Navigation Satellite System] ‘me too’ for Galileo. Experts believe a LEO solution can be built for a fraction of this.
We have begun work and the next generation of OneWeb satellites is expected to have PNT payloads on them. There is no question about that. This will also serve the other friendly countries.
VIA SATELLITE: Did you have any second thoughts before committing?
Mittal: If you ask me did we go through long due diligence, then the answer is no. However, we had the benefit of being in this company for the first two years. I knew exactly why things didn’t go right. If I had control over those elements, I knew we could put it back on track. My personal specialty is in building projects and large projects in a cost-effective way in a short time. So, with that confidence, we kind of plunged into it. It was a leap of faith and that has been tested in last four to five months. But things have become much more organized.
VIA SATELLITE: Do you think there were management issues at OneWeb that led it into Chapter 11?
Mittal: A lot of the management, particularly the second tier, is largely the same. There are some changes that have been made through necessity. The center of gravity of OneWeb is shifting into London, leading a shift from Virginia in the United States. That has bought some senior executive team changes.
But, if you look at the technical team, that has largely stayed the same. We have changed the CEO. However, the original CEO is being maintained as an advisor. I worked with Adrian Steckel during the bankruptcy. He is a fine gentleman. He knows this industry, much better than I do. I still pick up the phone to him and talk to him now when I need something.
Should we blame the management for what happened? I don’t know. Three CEOs have been changed in the last five years. My view is that the pulls and pressures from shareholders who were providers of services to this joint venture was at the heart of the problems for OneWeb.
VIA SATELLITE: We know why the U.K. government would like to use OneWeb, everything from satellite navigation to U.K. government comms and enhancing the U.K.’s space capability. What is the angle for Bharti? Where are the real benefits for the company when looking at the markets you serve?
Mittal: If I can resolve the entire rural broadband issue in the U.K., which we can, that will be huge. We will cover the whole of the U.K. by next October. We can 100 percent give a broadband signal to everyone. This will complete a nation’s broadband strategy, that is a powerful start and a strong minimum requirement.
What do I get out of this? I am an entrepreneur, not a scientist so I simplify things. For me, this is a telecoms network in space, nothing more than that. When more comes — PNT, perhaps other shared payloads in the future — I will learn about those. But currently this is a telecoms network in space for me. A telecoms network in space that has 650 base stations, and covers the whole globe. That is such a powerful proposition. I have 220,000 in India; 40,000 in Africa. You can imagine that having 600 base stations with OneWeb I cover the whole globe, every inch of water, every inch of forest. Why should this not be exciting for a telecoms company? Everything else on top of this including enterprise, aviation, maritime and defense contracts, are additional revenue opportunities.
It looks like our timing is right here. We see SpaceX picking up momentum. You see interest shaping up the space industry. The prime minister of India has just launched a new policy in space after 23 years. There is a great deal of buzz and activity when it comes to nation states, investment communities to do something in space.
VIA SATELLITE: How will India benefit from having access to OneWeb satellites? A lot has been talked about from a U.K. perspective, what is the Indian/international play here?
Mittal: We are very excited about the Indian market. If you look at the whole Himalayan range, it is impossible to cover it with anything else. If you look at the large desert in Rajasthan, one of the biggest deserts in the world. The Indian coastline is one of the largest in the world. You also have a large number of forests. We have a very large capacity before for the land mass of India as well as the Indian Ocean.
We are very excited about India’s broadband program, which has been trying to get to the last village. But, there are still large parts of India that need rural connectivity. So, cellular backhaul, rural broadband, enterprise and customers like Amazon that have depots and factories in large rural areas. You have Indian defense forces and police forces and a large maritime play in the Indian Ocean. India’s defense establishment is likely to play an increasingly international role.
We have had tremendous support from the Department of Space and ISRO. The ISRO chairman and us were connected on day one, even before we acquired this. We were talking to them about the low-cost manufacture of user terminals and even in the first constellation of satellites, we are hoping to have the PSLV take some of our satellites into orbit. So, a lot of conversations is going on. The good thing is that the prime minister is driving the conversation in India. He has galvanized the whole Indian space sector.
VIA SATELLITE: What role will you and Bharti have in the day-to-day running of OneWeb? How will OneWeb be different to what was before it entered into bankruptcy?
Mittal: First of all, my job is to ensure that the CEO and his executive team are protected from any pressure from shareholders. That is my first job.
I will take on any issues with shareholders and I will make sure that the management team is not impacted on a day-to-day basis. Old OneWeb’s vision kept being changed by the shareholders all the time. They were confusing the market. I will ensure that this doesn’t happen next time. We are not changing the day-to-day vision of the company. Our first generation of satellites was designed a number of years ago and are now being launched. As they are, generation two thinking has commenced.
The second point is market access. We need to ensure that 30 countries that are limiting access for satellite services will trust us to serve them and grant access and I will personally lead these efforts on this issue. Eleven out of the 30 are already done, 19 yet to go. India is one of those 19.
My focus is in getting global market access for OneWeb services. I will set the rhythm and cadence of this company. I am committing myself to two years as being the executive chairman of this. In these two years, this company will be on a nice rhythm and once it has good optics in terms of commercial services, then I will be able to rest back a little bit, with me as a principal shareholder.
My son, Shravin, has also surprised me in this process. Before this he was doing his own tech fund. I had to pull him out because of COVID as I had no resources in London and was there for four and a half months. I pulled him in on a temporary basis and he has taken complete charge of this project, doing midnight calls, rocket launches, factory restarts, supply chain, 10 Downing Street, he is covering all of that. He will stay in this project beyond the next two years. But, my job will be done.
VIA SATELLITE: Given that LEO constellations have somewhat of a checkered history in recent times, do you see there as being a significant element of risk with this investment given OneWeb has already failed once?
Mittal: In general, every project has a risk. But, this is the first time in the world that we will deliver something that has not been delivered before. Our beta testing shows it can be done. SpaceX is also doing it. My own view is that this is going to work. Risks remain. Rockets can surprise you. And there are other risks, including delays to user terminal equipment; market access; what happens in Russia and China, etc. Risks are always there but the job of an entrepreneur is to manage risk. Yes, there are risks, but I cannot see anything that we have not mitigated or planned for.
VIA SATELLITE: Following on from that, Elon Musk, SpaceX founder, joked at SATELLITE 2020 that LEO systems were 0-9 so far. What are your views on this?
Mittal: He is right. Elon Musk has the charisma and magnetism. What he has done is something we should all salute. In a matter of a few years, he is manufacturing his satellites, putting them in orbit. He is becoming a strong part of NASA and sending people to space. You have to give him credit. I would like to work very closely with him. But, of course, we will compete very hard in the marketplace. To develop this industry, you need more than one player. Both of us can say that LEO has always been questioned, but we will demonstrate that LEO works.
VIA SATELLITE: How important is it for the overall space industry that OneWeb was rescued in this way?
Mittal: When the history of the satellite sector is written, this will be considered a remarkable event. I think with the coming of OneWeb, I can already see the boardrooms of the GEO operators rushing into conversations. I think we will see a major shift in the satellite sector with these two constellations coming through. Will Amazon and Telesat also come through? I don’t know. But, my own view is that we have to be responsible space participants and we can’t create debris out there. I think two satellite constellations in LEO will be enough, perhaps there might be space for three, but definitely not for four.
VIA SATELLITE: So, one of Telesat and Amazon will not succeed?
Mittal: What is the point of adding more roads when there is no traffic and hardly any traffic jams. It doesn’t make sense to build another road next to an empty road. It doesn’t make sense. We will continue to launch satellites. My own view is that two is enough. Everybody has their own view of doing things. Amazon is Amazon. If I had to choose a third network from them, then Telesat looks challenged. Frankly, we would welcome the Canadian government to the OneWeb table. And we shouldn’t forget China will build its own LEO and there are calls for Russia to do so. The EU is also considering a long-term LEO program. Again, we would welcome them to the OneWeb table.
VIA SATELLITE: One of the big issues in the satellite sector is how do we work better with major telcos? As someone that is steeped in telecoms, how do you see the two sectors working together? How does satellite become a bigger part of the overall communications ecosystem?
Mittal: This is a very interesting question. I enter into satellite wearing a telecoms that. I was also the Chairman of GSMA. I know every telecoms company pretty much. I talk to most of the top telecom CEOs. I am going to encourage them to put OneWeb into their plans. I am not in competition with them. SpaceX wants to be in competition with them. They want to go direct to the customer. I am not going to make this mistake, because in my simple assessment, wherever a terrestrial network is present, there is very little opportunity for satellite. I am where they are not. There is no conflict. I am going to embrace all the telecoms companies globally and make them my partner. Take cellular backhaul from me, serve your enterprises through OneWeb, your cloud services etc. Let me be a part of your disaster recovery program. I have already spoken to at least a dozen CEOs of telecoms companies. I think they are all excited to work with us. Give me 90 days, and we will start to announce MoUs and agreements with all of these companies.
VIA SATELLITE: You talk about the different approach OneWeb would take to SpaceX. You said in the last answer, “SpaceX wants to be in competition with them. They want to go direct to the customer. I am not going to make this mistake.” Do you genuinely believe that SpaceX is taking the wrong approach here? Why?
Mittal: SpaceX has demonstrated through U.S. RDOF (Rural Digital Opportunity Fund) funding that it is prepared to go head to head with regional and more significant fixed-line [cable and telco] businesses in search of subsidy and advantage. Its claims for LEO consumer broadband are a direct threat telco models. Stripping- out networks in favor of a disruptor space- delivered strategy makes them at best a competitor of note and at worst, exemplars of predatory, below market pricing. Our aim is to partner and complement telcos, delivering the best possible combination in favor of the service consumer.
VIA SATELLITE: Any final comments?
Mittal: Too much attention is being paid to SpaceX, which is good. OneWeb has been a hidden gem, maybe even a damaged gem. I think it is time to polish it up and present it to the world. VS